The Volcker Rule (Volcker Rule news), a central plank of the Dodd-Frank bill, gives firms a fairly generous deadline by which firms must comply. It seems that Goldman Sachs (NYSE: GS) and Morgan Stanley (NYSE: MS) intend to take advantage of that. Bloomberg reports that both firms will liquidate assets in order to comply and that each firm intends to take 10 years, as noted in recent filings. 

Goldman Sachs had $15.4 billion in investments in private-equity, private-debt, real-estate and hedge funds as of June 30, while Morgan Stanley had $4.22 billion. The rule limits a bank's investments in these funds to 3 percent of its Tier 1 capital.

"That means Goldman Sachs and Morgan Stanley would have to reduce their stakes to about $2.1 billion and $1.6 billion, respectively, if the rule were enforced today." That's a pretty big "if." There will be plenty of time for the banks to develop some wiggle room with regulators--out of the public eye. Still, the Volcker Rule is definitely having an effect. 

For more:
- here's the article

Related Articles:
Goldman Sachs to spin out a prop trading unit?
Goldman Sachs to spin off private equity arm?
Morgan Stanley to spin off hedge fund? More to come?
Has Goldman Sachs found a loophole to Volcker Rule?
Volcker rates reform effort a B
A weakened Volcker Rule better than no Volcker Rule?