Keefe, Bruyette and Woods’ analyst Brian Gardner says complying with the new Volcker rule will be a bigger headache for banks than lost revenue from banning proprietary trading.

“Banks have never really disclosed with great specificity exactly what prop trading is and what percentage of their business is involved,” Gardner says. “The GAO did a study that came out several months ago, and they looked at the losses and profits over, I think it was a four-year period, and for the major banks, if you look at the numbers, they were not that large. I mean, they were, you know, we’re talking about billions of dollars in profits over a multi-quarter period spread over several banks. So my guess is, and I’m not a fundamental analyst, but sitting from a policy chair my guess is that the impact on the business models is not going to be as great as people have feared.”

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