The final rules concerning the controversial Volcker Rule have yet to be finalized. But we're seeing big banks continue to respond in interesting ways. They continue to either shutter or spin off various proprietary investment operations.

The latest news comes from Bank of America (NYSE:BAC), which has spun off its last large private equity fund, creating North Cove Partners. It will have more than $6 billion under management, according to Reuters. North Cove will manage private equity investments on behalf of Bank of America and other investors. The bank has no plans to invest any more money in private equity funds.Citigroup reportedly has shut down its $400 million Quantitative Strategies fund, and some think a few other funds might be shut down as well. Some think that Citi Capital Advisors, where a handful of funds are housed, will be completely shut down.

In general, this is a hard decision when you go fund by fund. The Mortgage/Credit Opportunity Fund, in which the bank is main investor, has fared well. And some executives may want to ponder ways to keep it operating. The likes of Goldman Sachs, Morgan Stanley and JPMorgan Chase will have to cut back on proprietary trading.

The outstanding big issue involves principal investments. Goldman Sachs seems bent on hanging onto its principal investing activity, which it has so adroitly used in the past to goose earnings. It has characterized the operations as an investing and lending operation in its bid to ensure it is not affected by the Volcker Rule, but it's still unclear how all this will play out.     

For more:
- here's a Reuters article

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