"Dodd-Frank certainly catalyzed substantial amounts of simplification, and we're moving well beyond that through our own initiatives," said James Mahoney, a Bank of America spokesman.

The new regulatory regime is also prompting banks to add thousands of staffers to help ensure compliance. By the end of this year, J.P. Morgan Chase JPM 0.00% & Co. expects to have added 13,000 employees focused on regulatory, compliance and control efforts, Chief Executive Officer James Dimon said in his annual shareholder letter. John Gerspach, Citigroup's chief financial officer, told investors Monday the company will likely end the year with 30,000 people dedicated to regulatory and compliance efforts, a 33% increase from 2011, even as Citigroup cuts its overall headcount.

Bank regulators point to the changes on Wall Street as evidence their efforts to suck risk out of the financial system are working. "Really we're in a substantially different place, and a much improved place," said Thomas Curry, comptroller of the currency.

But the banks' efforts are not enough to damp worries among some policymakers and lawmakers that the broader economy remains vulnerable to the potential collapse of a large, interconnected financial firm. Banks' are getting hungrier for risk as they try to compensate for sluggish economic growth, ultra-low interest rates and higher regulatory costs though appetites remain subdued compared to pre-crisis levels.

U.S. leveraged syndicated lending totaled $1.244 trillion in deal volume in 2013, up from $893 million in 2012 and surpassing the 2007 peak of $1.191 trillion, according to data from Dealogic. Banks provide the vast majority of the leveraged loans to fund buyouts.''

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