NEW YORK — Hillary Clinton recently went on Stephen Colbert’s “Late Show” and said she’s now prepared to bust up the big banks. If banks make too many risky investments, “they have to know — their shareholders have to know — they will fail.”

But Clinton might not have to deliver that message. Neither will Bernie Sanders, who wants to go even further in reining in the banks. Nor will Republicans who are joining in the chorus.


Because under all this heavy pressure from progressives behind Sen. Elizabeth Warren (D-Mass.) on the left and populists like Donald Trump on the right — and the weight of new regulation and activist shareholders — Big Wall Street is already shrinking on its own.

The evidence is everywhere.

JPMorgan Chase is selling off a chunk of its private equity business. AIG is contemplating breaking into smaller pieces. Goldman Sachs and Morgan Stanley are watching trading profits dwindle with no real clue whether or when they will ever come back. Giant banks including Wells Fargo will now be required to raise about $120 billion in new capital. General Electric is getting out of the financial services business entirely.

The battle cry to break up the biggest banks and reinstate the Depression-era rule separating investment and commercial banking will certainly go on. But in concrete ways, the pitchfork-wielding forces looking to storm Wall Street’s gates continue to win big, even though headlines might make you think otherwise.

“I’ll believe that Wall Street has really gotten the message when we go a full 12 months without a major scandal of somebody breaking the law, ” declared Warren, the political leader of the financial reform movement, in an interview with POLITICO. “But right now I think we’re doing the right thing.”

Financial reformers say that the shifts on Wall Street reflect both required regulatory changes and a realization on the part of big banks that the political tide is moving swiftly against them.

Clinton continues to move leftward on Wall Street reform, pressed by Sanders and the specter of Warren, who has declined to endorse anyone in the Democratic primary and said she wants to hear even more tough talk and policies from Clinton.

On the right, Wall Street’s darling candidate, former Florida Gov. Jeb Bush, is languishing in the polls, largely rejected by a conservative base that distrusts the financial elite and the power of the big banks.

While the industry retains powerful lobbying influence in Washington, its clout is on the wane, a fact that reflects strong bipartisan support for even greater crackdowns on the financial industry. Community bankers now arguably hold bigger lobbying clout in D.C. than Wall Street does.

The latest ABC News/Washington Post poll found that 67 percent of Americans would support a president who backs tougher regulations on big banks. The support crosses all ideological and partisan lines.

“If you look at all the polls and focus groups on it, it’s pretty clear the American people still perceive correctly the threat that Wall Street poses and the need for it to be regulated and for the government to regulate it,” said Dennis Kelleher, CEO of financial reform group Better Markets. “Both parties have to address this issue as best they can because the American people are very clear on it.”

Executives at big banks say privately that the trend in the industry is very much to slim down to avoid additional regulatory costs and pressure from shareholder activists and populist politicians who argue that their size no longer makes any sense.

“Dodd-Frank, no matter what Bernie Sanders or anyone else says, has put a tax on the size of banks; you pay more if you are bigger, and there is real change because of it,” said a senior executive at a large Wall Street bank who declined to be identified by name because he was not authorized to speak publicly on the issue. “Everyone wants to be more banklike and less tradinglike. People want to get more boring and smaller. No one is looking to bulk up.”

The latest evidence of the changing face of Wall Street piled up in the past few weeks.

JPMorgan Chase, the largest bank in the world by assets, is moving to sell the bulk of Highbridge Capital, the $22 billion private equity business it bought before the financial crisis. A large part of the reason for the sale: Highbridge no longer wants to be tied down by the regulatory constraints now placed on the biggest banks.

Profits at Morgan Stanley fell 42 percent in the third quarter, driven down by lower trading revenue. Goldman Sachs’ profit fell by nearly 40 percent. JPMorgan, Bank of America and Citigroup also saw drops in trading performance.

Big banks still dominate the derivatives trading market — a major current target of financial reformers — but changes contained in the Volcker rule ban on big banks making large bets with their own capital are slicing into an area that historically has been one of Wall Street’s biggest profit drivers. And there is a good chance those profits are gone for good.

The changes are not limited to high-flying investment banks. The Federal Reserve on Friday moved to require Wells Fargo and other big banks to add more long-term debt in ways that could cut into bank profits, further making size less attractive. Many large banks, including JPMorgan, are now moving to discourage big deposits from corporations and hedge funds because it costs them too much to hold the money based on new regulatory requirements.

All this has financial reformers pleased, if not declaring victory.

“I’m encouraged and think we’ve made some real progress,” said Simon Johnson, a professor at MIT and a leader in efforts to make big banks less risky and more transparent. “Dodd-Frank has clearly had some impacts, and the biggest part of it is a change in regulatory attitude. Before the crisis, the Fed thought bigger was more efficient. Now the Fed and others are much more concerned about banks becoming larger.”

By sheer size of assets, many of the largest banks are bigger than they were before the financial crisis, in part because of the consolidation that took place as weaker institutions like Washington Mutual and Bear Stearns failed and were absorbed by stronger players like JPMorgan. Citigroup, however, is notably smaller than it was before the crash.

And by other measures, the biggest banks now hold more capital and take less risk than they did before the crisis, though in some cases the changes are relatively small. Still, the trend reflects both that regulation has made size and risk more expensive and that banking executives realize they have to make changes and improve their standing with the public before even more change is forced upon them. A recent Government Accountability Office study found that the “subsidy” big banks enjoy from investor perceptions that they would receive a bailout is shrinking.

“Since Dodd-Frank, the share of assets created by small and medium-size banks is faster than the growth rates for big banks, that’s really the biggest thing,” said Tony Fratto of Hamilton Place Strategies, which does consulting work for large financial firms. “And a lot of capital requirements are not present-day requirements, they are future requirements, and the banks have already met them because that’s what the market demands. And the market has also demanded that big banks get rid of certain business lines.”

In one of the more remarkable developments in recent weeks, billionaire hedge fund manager Carl Icahn has taken aim at insurance giant AIG, whose giant derivatives bets required an $85 billion bailout during the financial crisis.

Icahn argues that regulation — notably the costs associated with being labeled a Systemically Significant Financial Institution — is weighing on AIG’s results and that the company would be much more valuable broken up in to smaller pieces. AIG is reportedly considering selling off some of its parts.

Goldman Sachs analysts recently issued a report making the same case for a break-up of JPMorgan, though the company’s CEO, Jamie Dimon, has repeatedly rebuffed such arguments. Still, the regulatory and political costs of bigness have led banks to resist new deposits and, in the case of Bank of America, caused CEO Brian Moynihan to slash the size of its trading operation.

Even Goldman Sachs, which almost alone on Wall Street remains heavily committed to its trading business, has made strategic moves in the direction of fitting more neatly into the bank holding company status it acquired during the financial crisis. The bank recently bought an online deposit taker.

“The pressure on these banks is only going to go up, and some have responded to it more than others,” said Michael Mayo, a veteran banking analyst now at investment firm CLSA. “JPMorgan’s downsizing this year is remarkable; they have downsized an amount equal to the size of the 12th largest bank in America. The sum of the parts of many of these banks is worth significantly more than their current market value. And the threat from activist investors is now always there.”

None of this means financial reformers will cease pressing their case or arguing for even more transparency and high capital levels for the largest banks. Johnson argues that the latest round of “living wills” for the nation’s largest banks — meant as road maps to wind down giant banks without a taxpayer bailout — was an abject failure. And he argues that leverage ratios — the key measure of big banks’ risk exposure — are not down very much from pre-crisis levels.

“I would say capital levels are higher than they were in the crisis, but it’s not really clear that there is significantly more loss-absorbing capital,” Johnson said. “But there is clearly some market pressure and concern about these companies being too big.”

Warren herself acknowledged that the big banks are “not taking on the same kinds of risks” that they did before the crisis, thanks to new regulations.

But she also made it clear that the pressure is only going to grow, meaning banks will remain on the defensive for the duration of the 2016 campaign and probably beyond. And moves to get smaller will likely continue.

“We still have a problem,” she said. “We have too-big-to-fail banks, and the question is how best can we wrestle with those banks.”