So just how onerous will the proposed financial reform bill be? Citigroup (NYSE: C) analysts put some numbers to the issue. Goldman Sachs (NYSE: GS) could lose up to 23 percent of its profits. Morgan Stanley (NYSE: MS) could lose up to 20 percent of its profits. JPMorgan Chase (NYSE: JPM), 18 percent, and Bank of America (NYSE: BAC), 16 percent.

The biggest profit killers are the Volcker Rule and restrictions on proprietary trading. This sounds somewhat dire. But we have to take all such talk with a grain of salt. For one thing, the bill continues to morph. It's unclear if the weak versions vs. the strong versions of some restrictions will be passed. The recent modifications to the proposal to ban banks from owning units that trade swaps and other derivatives has been watered down significantly; it may not even take effect for two years.

The industry will no doubt hire some canny legal minds to pore through it all looking for various outs and loopholes; in an effort to prevent this, the law stretches over thousands of pages. We'll just have to wait and see. There may be a relief rally at some point. 

For more:
- here's a Huffington Post article

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