Banks 'can't have a casino' under Volcker: Pro

Tuesday, 10 Dec 2013 | 2:53 PM ET
Banks can't have a casino: Analyst
Tuesday, 10 Dec 2013 | 12:30 PM ET
CLSA research analyst Mike Mayo shares his views on the Volcker Rule and says that "there's always ways for smart bankers and lawyers to get around" such precise regulations.

The Federal Reserve's approval of the Volcker Rule, meant to rein in risky trading in reaction to the financial crisis, sends a clear signal, bank analyst Mike Mayo of CLSA said Tuesday.

"Banks need to be pillars of strength of stability. They need to facilitate the economy. They need to be a port in the storm," he said. "But no, they can't have a casino inside the bank, so from that standpoint, bank CEOs are put on notice."

(Read more: What you need to know about the Volcker Rule)

Mayor tol CNBC's "Halftime Report" that although banks might find loopholes to circumvent some of the rule's provisions, it would provide accountability in the long term.

"I think if after the fact you have a big loss, banks don't get off so easily," he said.

The financial industry has "to some degree" already adjusted to the rule's requirements, Mayo said, adding that he is confident his top bank stock will not be affected negatively.

"The Volcker Rule is not a game changer for Morgan Stanley," he said. "I'm not the least bit worried Morgan Stanley hasn't adjusted."

Mayo holds long positions in Morgan Stanley, JPMorgan, Citigroup, KeyCorp and State Street.

—By CNBC's Bruno J. Navarro. Follow him on Twitter @Bruno_J_Navarro.

  Price   Change %Change


Contact Halftime Report

  • Showtimes

    Halftime Report - Weekdays 12p ET
    Fast Money - Weekdays 5p ET
  • Scott Wapner is host of the "Fast Money Halftime Report," which airs weekdays from 12 p.m. to 1 p.m. ET.