Bonuses and salaries are being slashed; in the past quarter, Goldman Sachs cut the amount it set aside for compensation by forty per cent. Payroll is down, too: banks have eliminated tens of thousands of jobs in the past couple of years and are now embarking on a new round of severe job cuts.
.. Before the financial crisis, financial companies (not including the Federal Reserve banks) accounted for nearly thirty per cent of U.S. corporate profits. By 2015, that number had fallen to just seventeen per cent.
.. “Dodd-Frank was supposed to curb certain kinds of risky behavior on Wall Street,” Mike Konczal, a fellow at the Roosevelt Institute who studies financial reform and inequality, told me. “And by that standard it’s gone very well.” Big banks now have to carry almost twice as much capital as they did before the crisis, and new Fed rules will require them to set aside another two hundred billion dollars on top of that.
.. Dodd-Frank has also reduced the middleman fees that banks collect—for instance, by moving much of the trading of derivatives onto the open market. More than half of credit-default swaps and seventy per cent of currency swaps now trade through a public clearinghouse.
.. Until recently, big banks were able to borrow money much more cheaply than small ones, because investors assumed they’d be bailed out in a crisis. But recent studies suggest that that funding advantage has nearly disappeared.