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Post-Volcker, trading at the big banks is up 

January 27, 2014
Stephen Gandel, CNN Money

Nearly five years ago, when former Fed Chairman Paul Volcker proposed his rule, the idea was it would force the big banks to cut most of their trading operations. By the time it was passed as part of Dodd-Frank, the idea was that the Volcker Rule would at least eliminate risky trading. There's a question it has even done that.

Last week, the nation's biggest banks announced their 2013 earnings. It was the banks' first earnings report since Volcker was finalized in December. The rule still doesn't officially go into effect until the end of the year. But at this point most banks say they have already made the changes they need to make to comply with Volcker. "At this stage, it doesn't look like a revenue impacting item," Goldman Sachs CFO Harvey Schwartz said of Volcker on a conference call with analysts.

That appears to be true. An analysis of last week's earnings reports shows Volcker has done little to curtail the revenue that Goldman (GS) and the other big banks get from their Wall Street trading businesses. Three years ago, Fortune computed the percentage of revenue each of the big banks got from trading. The numbers were for 2009, the year before Dodd-Frank and Volcker passed. I updated the numbers to see how Volcker has changed Wall Street. The answer: Not much.

Read more: CNN Money

 
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