So what if the Volcker Rule becomes law? How would top banks react? Well, one view is that some would be forced to get rid of their alternative investment operations. But would that work for Goldman Sachs (GS), given its extensive trading activity? The Financial Times reports that "if the Volcker Rule is passed, it would probably sell its deposit-taking bank, which is an insignificant part of Goldman's $900 billion-plus balance sheet. However, Goldman leaders do not believe they would have to give up the financial holding company status acquired at the height of the 2008 crisis to escape the rule's ban on in-house trading."

The issue is a little murky. Giving up bank status would not automatically exempt the bank from additional regulation. At the same time, it's unclear exactly why the bank, sans deposit taking operations, thinks it needs bank status. Perhaps it wants the right to borrow from the Fed? The idea of the Fed bailing out a too-big-to-fail trading operation will not be easy to pull off politically. Volcker indeed says one key to his rule would be a resolution authority for big banks. Meanwhile, some politicians support a more aggressive application of the rule. 

For more:
- here's the article

Related Articles:
Should exchanges fear the Volcker rule?
Private equity faces new regulatory future