The implementation of regulations restricting proprietary trading activities will also likely hinder asset growth.

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Banks may be stripped of their proprietary trading activities (that is, the ability of traders to make large speculative bets on financial markets using their bank's money, rather than their clients).

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For the same reason, he argues, the risk inherent in commercial banks' proprietary trading activities is not warranted and should not be backstopped by the safety net provided to ensure deposit-taking institutions' core activities.

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However, financial industry lobbyists were successful in having Glass-Steagall repealed in 1999, which resulted in banks becoming heavily involved in brokerage, mutual fund, and proprietary trading activities, as well as the packaging and promotion of questionable investment products like sub-prime mortgages.

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Nervy clients have cut back on trading, and banks are under regulatory pressure to reduce their proprietary-trading activities.

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Dresdner's investment bank will not be the only one to slim down riskier activities such as proprietary trading.

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Pricing deposit insurance differently or banning activities such as proprietary trading would give shareholders and employees alike an incentive to rein in risk-taking.

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Unlike other financial reform that curb activities, the Volcker Rule prohibits federally insured banks from engaging in specific business lines: proprietary trading and investment in hedge funds and private equity funds.

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