Chart of the Day — Dodd Frank Isn’t Hurting Banks

Everyone who is surprised that the Banking Apocalypse that Dodd-Frank was loudly predicted to be hasn’t materialized, raise your hand. Thought so. While bank profits have had ups and downs since the crash, they are certainly plenty profitable and definitely not in any real risk as they tried to convince us otherwise. So here is the chart from the article in NY Magazine:

Inspired by Matt Yglesias, I made the above chart to show how wrong all of these doomsayers have been. As you can see, after the Dodd-Frank Act was signed in July of 2010, the biggest investment banks on Wall Street experienced no real setbacks when it came to their profits. They didn’t lose money in 2011 after shutting down their proprietary trading units to comply with Dodd-Frank’s Volcker Rule. (The dips on the graph in 2011 came mostly from the European debt crisis and political uncertainty over the debt ceiling.) And they didn’t suffer after the Fed announced in 2011 that it would implement Basel III, a set of international standards that raise capital requirements on banks.

All of these rules were met with crazed hysteria by banking industry lobbyists when they were introduced. We were warned that regulations on the banking sector would turn America into Sweden, take away Wall Street’s competitive advantage, and harm the economy by bogging down banks in compliance measures and box-checking. And none of that happened. In fact, as the chart shows, the biggest three investment banks are doing better than or equally well as they were before the crash.

Right? TBTF is doing just fine after Dodd-Frank. And this comes with a message to our local Congressional Delegation who find banks their priority constituents — you can start paying attention to the rest of us now. Banks are doing fine, Dodd-Frank or no. Congressional meddling with the provisions of Dodd-Frank is officially a waste of your time, because the banks are surviving certainly better than your human constituents are. So please stop working on weakening Dodd-Frank and please start working on helping Americans get employed.