What would Volcker say about HSBC's investment bank? Foreign exchange, a highly client-centred business, was metronomic by comparison not making less than $700m in any quarter, but equally never making more than $1bn. HSBC can obviously argue that the volatility is a reflection of very volatile conditions and that as a major global bank it is heavily exposed to all the gyrations and bumps of the world markets. This is true, but it seems hard to believe that a business that is purely based on client revenues, even with the size of inventory a bank like HSBC has to keep on hand, could be responsible for such large swings in earnings. As any trader knows, proprietary trading is not just about taking a slug of a banks capital and punting it around. There are a large spectrum of activities that involve capital being put at risk and determining when this risk changes from being something used to facilitate client business into a bet, albeit an educated one, is very hard to tell. Looking at HSBC's results, it seems likely that Mr Volcker's sight test may well indicate the existence of something that looks remarkably like proprietary activity. Either that or some very risky customer business. In Stuart Gulliver, HSBC clearly has one of the canniest traders at the helm of any bank in the world. Indeed, before running the bank, Mr Gulliver as head of HSBC's investment banking arm was careful to keep himself plugged into the markets by maintaining his own personal trading portfolio. It would seem his successors at the helm of the investment bank are not quite in the same category of trading talent.