FORTUNE — 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.
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JPMorgan Chase (JPM), for instance, generates 23% of its total revenue from trading. Back in 2009, it was 22%. It’s the same story at Bank of America (BAC), which gets 19% of its revenue from its trading operations, up from 18% in 2009.
At Goldman, trading revenue has dropped. In 2009, 76% of the money the firm brought in came via its trading desks. But that was a high-water mark, up from 50% just a few years earlier. These days, two-thirds of Goldman’s revenue comes from its own investments or from fees for completing clients’ trades, which is far higher than any other big bank.
The one exception is Morgan Stanley (MS), which has been hailed recently for eschewing risky business. Nonetheless, trading revenue continues to account for 34% of the firm’s overall sales. Still, that’s down from 45% in 2009.
Combined, the nation’s six biggest banks generated just over $100 billion in revenue from their trading activities in 2013. To be sure, that’s down 20% from four years ago. And that could be the result of Volcker. But it could also be the function of the economy.
MORE: Volcker loopholes: Here are all the crazy trades banks can still make
What’s more, the banks continue to devote more of their assets to trading. Bank of America, for instance, according to its financial statements, has $275 billion of the bank’s assets in its trading operation. That’s up from $263 billion in 2009. At Goldman, trading assets are up as much as 37%, though the bank changed the way it reports its business segments so the exact number is hard to determine. Goldman did not return a request for comment.
Even at Wells Fargo (WFC), which isn’t known to be a Wall Street powerhouse, trading assets are up 44% in the past four years to $62 billion.
None of this says anything about risk, which could still be going down, even as the size of the banks’ trading operations continues to grow. The point of Volcker was to make the banks less risky by limiting the banks’ ability to buy and sell investments with their own, and their depositors’, cash. This was supposed to bring down the overall risk of the banks’ trading operations. But that doesn’t always appear to be the case.
Each quarter, banks report a measure of how much they could lose on a really bad day in the market. The figure is called value-at-risk (VAR), and it’s down at all the banks. But VAR considers the volatility of the market as well as a bank’s own positions. Factor in the overall drop in volatility, and Goldman’s current VAR is $176 million, not far from the $181 million it averaged in 2009.
MORE: Goldman is (slightly) less profitable than it used to be
In part, what we are seeing could very well be a natural reaction to Volcker. Banks are trying to boost their revenue and profits. And if they are barred from one type of trading, they need to make up the revenue somehow. One solution is to just do more of the type of trading that is allowed. So while each individual trade may be less risky, if you do a lot more of that seemingly safer trading, you may end up losing as much or more than before. Or perhaps, Volcker is too complex to really work.
Either way, Volcker may not be the gleaming success as some seem to claim.
