Lunchtime Links: This is what all those prop traders are doing now

Given that banks like Citigroup have reportedly lost one third of all their prop traders, anyone might think banks' prop trading divisions are shrivelled husks of their former selves, staffed only by people who weren't quite good enough to get into hedge funds.

Not so.

The Wall Street Journal points out that banks still have lots and lots of prop traders, they're just called something different. Nowadays, they're situated on client desks and work with, 'corporate derivatives.'

This is because the Volcker Rule and the US Financial Reform Bill set no limits on the amount of prop trading that can be done on the back of market making for clients.

The Volcker rule, 'directs federal officials to disallow most proprietary trading at banks unless the trades are meant to serve near-term client demand or reduce risk'' points out the Journal, 'But does that mean a trader can't buy a bunch of bonds in anticipation that investors would want to buy them a week later at a higher price? What if the trader holds the bonds for a month or two?

Prop traders live on in all but name.

Hedge fund Galtere expands to Europe. (FinAlternatives)

JPMorgan says the US financial reform bill won't affect its commodities business. (Financial Times)

Barclays Wealth is 'amidst a recruitment surge' involving the addition of 115 people to its mortgage lending and credit unit, and has hired someone in Guernsey. (Financial News)

Why the European stress tests won't work. (Telegraph)

Vince Cable is bad news for M&A bankers. (BBC)

Alan Budd is leaving the OBR for the private sector. (Telegraph)

Mr Tyrie indicated that the independence and structure of the Office for Budget Responsibility would come under the committee's gaze. (Financial Times)

It IS possible to return to a senior banking role after four years in academia. (IFRE)

BofA Merrill has got a new EMEA chief risk officer (who once worked for the White House) (Marketwatch)

Brian Moynihan: didn't exactly overachieve, but had lots of 'powerful mentors.' (Wall Street Journal)

Wall Street lawyers are taking the Hong Kong bar exam to make the most of Asian fees. (Bloomberg)

"I could have gone for a job with a foreign financial institution, with a name like So-and-so Securities and So-and-so Asset Management and made a lot of money." (WSJ)