This proposal may also negate certain economies of scope, which seem quite likely to exist in firms that make markets in securities that they have underwritten, and thus also economies of scale, which may be realized by making markets in other securities once a firm is in that business.
Note in this regard that the so-called Volcker rule, included in the Dodd-Frank Act, prohibits only proprietary trading, not all trading. Whatever the practical difficulties of distinguishing proprietary from nonproprietary trading, the distinction in the legislation rests on the apparent assumption that there are efficiencies to be gained in having underwriting firms trade.