"Volcker rule" would present some banks with difficult choice

Paul Volcker, head of the Economic Recovery Advisory Board, said banks such as Goldman Sachs should forgo their banking status if they want to continue proprietary trading. "The implication for Goldman Sachs or any other institution is, do you want to be a bank?" Volcker said. "If you don't want to follow those [banking] rules, you want to go out and do a lot of proprietary stuff, fine, but don't do it with a banking license."

Goldman declined to comment but executives say that if the Volcker Rule is passed, it would probably sell its deposit-taking bank, which is an insignificant part of Goldman’s $900bn-plus balance sheet.

Mr Volcker said giving up bank status would not allow financial institutions to “escape from all oversight and regulation . . . you’re going to be subject to some capital restraints, some leverage restraints, liquidity provisions”.

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