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From Precy Dumlao, Opalesque Asia:

Most of the constraints coming from the slew of financial regulations in the U.S., including the so-called Volcker Rule, are directed at the banks. They have created more opportunities for investors as banks have amended their business models to adapt with the changes.

Banks have always played a major role in the pricing of credit, including the origination process, and having exposure to it. All these advantages will be greatly constrained by the new financial regulations. Even the Basel III will have a great impact on the overall capital requirements of banks.

But despite being given ample time to make adjustments to these new regulations, banks are already starting to feel the pinch and are “already acting like they cannot do this [proprietary] business much longer.”

“As a result, the business model at the banks is changing. Maybe pricing is not the best indicator, but in the future if you are in a difficult market and there are fewer large pools of capital to be applied to a risk asset in credit, we view this financial regulation framework as quite positive for investors due to more attractive pricing,” commented Tom Humphrey, Partner of GoldenTree Asset Management, a New York-based asset manager with $12.5bn in AuM, during the most recent Opalesque Roundtable in New York.......................

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