There’s plenty of volatility, but what happened to the volume?

From stocks to currencies and bonds, the upswing in turbulence to start the year is chasing all but the bravest traders from financial markets. Despite the recent rebound in U.S. equities, volume in the S&P 500 Index is down 23 percent. Speculative bets on the direction of currencies have also dropped to the lowest in two years, while average daily trading among dealers in U.S. Treasuries is close to a seven-year low.

Worries about the outlook for the U.S., Europe and China, as well as mixed policy signals from central bankers around the world, have all contributed to what UBS Group AG Chief Executive Officer Sergio Ermotti called a “paralyzing volatility” that’s scaring away clients and caused industry-wide trading revenue to tumble to the lowest since 2009.

Yet in some ways, it also underscores the changing nature of the market itself. Big banks have cut back on trading as post-crisis regulations like Dodd-Frank and Basel III force them to take fewer risks, particularly in fixed-income. Last year alone, Wall Street eliminated more than 20,000 jobs, with trading desks bearing the brunt of the cuts. And while automated traders have swept in to fill the void, some say they’ve made markets more prone to sudden shocks.

Goldman Sachs Group Inc. is cutting more jobs in its securities units, extending reductions in fixed-income operations this year to roughly 10 percent of workers there, according to people with knowledge of the situation.

Investor concern over the state of the global economy is adding to “the structural pressure that’s been hurting banks for the last few years,” said Paul Gulberg, a banking analyst at Portales Partners LLC.

Whipsawed Traders

Normally, a rise in volatility tends to lead to higher trading activity as traders jump in to bet on the market’s ultimate direction, according to Gulberg. That hasn’t been the case this time. Violent swings across assets have whipsawed just about everyone as concern deepens over the state of the global economy and the effectiveness of negative interest rates and quantitative easing.

At the start of the year, it took just six harrowing weeks for the S&P 500 to lose 11 percent and then a mere five weeks to recoup all the losses. What’s more, it came within months of its August swoon, the first time since 1998 that bull-market investors have suffered two such swings in close succession.

Even after stocks rallied in February, trading has fallen off. U.S. equity volume has averaged 7.2 billion shares a day since the bottom, compared with 9.3 billion shares a day in the first six weeks of the year, data compiled by Bloomberg show. Daily moves in the S&P 500 have also averaged 0.84 percent since August, versus 0.55 percent in the prior two years.