This Is How Much The Banks Paid To Get The "Volcker Rule" Outcome They Desired

Tyler Durden's picture

Curious how much the various banks who stood to be impacted by or, otherwise, benefit from either a concentration or dilution of the Volcker rule? According to OpenSecrets, which crunched the numbers, here is how much being able to continue prop trading meant to some of the largest US banks and lobby groups:

Not bad considering the loophole-ridden Volcker Rule will effectively permit "hedge" books (where an army of lawyers paid $1000/hour defines just what a hedge is) to continue piling on billions of dollars in wildly profitable, Fed reserve funded trades.

From OpenSecrets:

Regulators approved the Volcker rule yesterday, a central piece of the Dodd-Frank bill that limits the ability of banks to engage in high-risk trading. Their decision comes in spite of heavy lobbying from the rule's main opponents: the banks themselves.


The American Bankers Association, which represents the interests of banks of all sizes, spent nearly $6.5 million on lobbying in the first nine months of 2013, with much of that money going to lobbying on behalf of "Dodd-Frank issues." Wells Fargo and Citigroup each spent just over $4 million, while the Independent Community Bankers of America, another organization that represents banks, spent nearly $3.6 million. All three lobbied on the Dodd-Frank legislation.


Bank of America, meanwhile, spent just under $2 million on the Volcker rule and other issues, while JPMorgan Chase spent more than $4 million and listed "implementation and interpretation of the Volcker Rule" as one of its concerns.


The final rule is seen as a defeat for the commercial banking industry, which has already voiced its unhappiness with the decision. 

Congrats on the math, alas completely flawed conclusion: obviously the banks wouldn't spend tens of millions not to achieve their goal, which they have - cover up a Rule which is only superficially named for Paul Volcker (even he admitted he had zero contribution in its drafting), and which was almost certainly penned by the banking lobby, in a way that allows banks to continue their prop trading status quo, only this time with the implicit blessing of the government. And since everyone knows how this movie ends, can we just please fast forward to the bit where one after another bank has to once again be bailed out on the taxpayer dime.

Finally, there are those who will be disgusted at how cheaply US politicians can be bought for. That is, sadly, an accurate observation. Recall from Presenting The Greatest ROI Opportunity Ever:

The dream of virtually anyone who has ever traded even one share of stock has always been to generate above market returns, also known as alpha, preferably in a long-term horizon. Why? Because those who manage to return 30%, 20% even 10% above the S&P over the long run, become, all else equal (expert networks and collocated flow-frontrunning HFT boxes aside), legendary investors in the eyes of the general public, which brings the ancillary benefits of fame and fortune (usually in the form of 2 and 20). This is the ultimate goal of everyone who works on Wall Street. Yet, ironically, what most don't realize, is that these returns, or Returns On Investment (ROI), are absolutely meaningless when put side by side next to something few think about when considering investment returns.

Namely lobbying.

Because it is the ROIs for various forms of lobbying the put the compounded long-term returns of the market to absolute shame. As the following infographic demonstrates, ROIs on various lobbying efforts range from a whopping 5,900% (oil subsidies) to a gargantuan 77,500% (pharmaceuticals).

How are these mingboggling returns possible? Simple - because they appeal to the weakest link: the most corrupt, bribable, and infinitely greedy unit of modern society known as 'the politician'.

Yet who benefits from these tremendous arbitrage opportunities? Not you and I, that is for certain.

No - it is the faceless corporations - the IBM Stellar Sphere, the Microsoft Galaxy, Planet Starbucks - which are truly in the control nexus of modern society, and which, precisely courtesy of these lobbying "efforts", in which modest investments generate fantastic returns allowing the status quo to further entrench itself, take advantage of this biggest weakness of modern "developed" society to make the rich much richer (a/k/a that increasingly thinner sliver of society known as investors), who are the sole beneficiaries of this "Amazing ROI" - the stock market is merely one grand (and lately broken, and very much manipulated) distraction, to give everyone the impression the playing field is level.

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pods's picture

The US government offers the best protection that money can buy.


Dre4dwolf's picture

What government? I just see a bunch of banks and a black guy playing golf.

Doubleth1nker's picture

Those are just to distract you while the black helicopters land in your backyard and armed thugs carry you off to a FEMA camp.  No really.

floyd084's picture

Knowing that you and every other citizen will never do anything about it makes me want to work for the governement.

doctor10's picture

Aha!! the old "piss on us and tell us its raining out there" trick...

Grande Tetons's picture

Cockroaches are starting to look clean and pretty. 

Mercury's picture

This is why it should all be about size when it comes to banks and not how many prop traders can dance through a loophole...or whatever the world-saving regulation du jour is.

Kaiser Sousa's picture


free yourselve' alll the pysical Silver and Gold you can afford....


Mercury's picture

Technically that is changing money...

Kaiser Sousa's picture

technically is changing worthless paper for real money...

and its patriotic as well...

Dr. Engali's picture

Regulations, like taxes, are for little people. There is something fundamentally wrong when a business has to have access to a fleet of lawyers in order to survive.

Doubleth1nker's picture

Its all the same pair of pants anyway ya know, just money going from the left pocket to the right.

cougar_w's picture

The absolute best government money can buy, hands down.

Thank you SCOTUS for that well-reasoned Citizens United ruling! Future generations will sing your praises. Or burn you in effigy, you know, whatever.

ebworthen's picture

It's almost as if they are begging for the noose and guillotine.

Dre4dwolf's picture

Even if you had the guilotines ready, Americans are too fat and diabetic to climb the 200 story ivory tower of babylon to drag their ass back down to earth.

Why do you think banks build their buildings like fortresses? its not to keep the money safe, because banks don't keep any "real money" around anymore anyway.

It's all a show of force "im big, your small, and your too poor to break my 5ft thick wall of granite down" go ahead huff and puff sheeple.

Dre4dwolf's picture

No one realisticly expected any meaningful changes to banking, the government is bought and paid for , the regulators are ex-banker board members, or paid off, the judges are bought and paid for (most of them anyway, you still have 1 or two awesome judges fighting the good fight).... congress doesn't know its left foot from its other left foot.

Only real answer :  National Economic Security and Reformation Act

Only plausable solution that was ever almost discussed


HardAssets's picture

You really have to wonder what the target audience is for all the b.s. Much of the public is too ignorant to understand or care. Of those who do understand the significance of these kind of stories . . . do any of them actually buy the propaganda ?  Do some people actually think the economy is getting better and 'reforms' are being made ?

A fascist oligarchy runs the U.S.A. today. They get whatever they want.

Blood Spattered Banner's picture

Yes.  I thought the other day, "How many of my supposedly well educated friends know the meaning of terms like 'Quantitative Easing', 'Fractional Reserve Lending' or 'Federal Reserve Notes'?".  Almost all of them have college degrees, and some of them with post-secondary education.  I can honestly say not even 25% of them know what these words mean.  The bottom line is if you don't understand these terms, you're not qualified to debate any economic or socio-economic issues.

ebworthen's picture


It became blatant when CONgress passed the bailouts.

Amazing how the public has been passified, mollified, zombified.

Something tells me though that the current peace is like the ramp in equities and QE not leading to a hyperinflationary collapse or stagflation - yet. 

The more they wind it up and delay the tighter the spring gets and the greater the unwind will be.

frankTHE COIN's picture

Jamie ....'I thought that the petty cash acct looked a little lite.'

ultraticum's picture


How many people do you know who are:  a) aware of this; AND b) pissed off about it; AND c) willing to do something about being pissed off? 

Hint:  apply a 1/100 fraction at (b) and then again at (c) for the number you came up with in (a).

I rest my case.

We are the earliest of early adopters on the "awareness of what's messed up and getting pissed off" curve.  Frogs in a pot.

Still, where there's life there's apparently hope.

steveo77's picture

Amazing how cheap it is to hijack a $13T economy.    

TheFreeLance's picture

The ROI is amazing. Look how hard the Chinese Iron Circle fams have it -- dead pigs clogging rivers, black poison skies, crazy ass North Koreans on your border, etc. The banksters just write checks.

virgilcaine's picture

The Corleone Family of Wall St   protecting it's's an age old theme.

El_Puerco's picture

If you want to know the true!..Look at this video.{ Time index 23:00 }..




__________{ }__________


:P  (•?•)

TheRideNeverEnds's picture

so what is that, half a days earnings... maybe? 

Emergency Ward's picture

"We paid 'em off, let's go to lunch!"

Colonel Klink's picture

Simple solution:  BOYCOTT THE BIG 10 BANKS!

virgilcaine's picture

OT  We should be due for a ZH.. Btc 'crashing now' post with accompaning charts with red arrows. That thing is crashy looking.

Emergency Ward's picture

Cheap fix.  Those fucking oil barons are pikers compared to the PigPharma boys.

ObamacarePrescription Drug Benefit

Ha Ha Ha, who makes all this wonderment possible -- >> 'the politician' << those darling lovable rascals, those darn social buffoons, those robbin' hoods in tights.

El Hosel's picture

They got off dirt cheap, 22 million equals one Banker Bonus.