FA: Biden’s Threat To Crack Down On Wall Street Won’t Happen, Staffers Promise Industry
Biden’s Threat To Crack Down On Wall Street Won’t Happen, Staffers Promise Industry
“Financial advisory firm Signum Global Advisors told clients it wasn’t convinced Joe Biden would be nearly as progressive as some fear if he wins the November election. The Biden-Sanders policy agenda “is aspirational; it pays lip service to some of the party’s more progressive ideas, though has few specifics about how ideas will be achieved, and generally repeats most of the moderate ideas from the Biden campaign’s website,” said Signum’s note to clients.”
After months of Democrat presidential nominee Joe Biden and his supporters using the bully pit with threats of a nebulous Wall Street crackdown, Biden staffers are now walking back Biden’s rhetoric and quietly telling the investment community the former vice president’s bluster is just that, designed to get votes from the left.
While Biden is publicly promising to curtail big banks’ excesses, Biden staffers are privately “reassuring industry leaders that he won’t focus on the issue while in office,” the Washington Post reported this morning in two separate articles.
As one investment banker described Biden campaign calls to financiers, “They basically said, ‘Listen, this is just an exercise to keep the [Elizabeth] Warren people happy, and don’t read too much into it.’”
Specifically, the Biden campaign is disavowing a number of the former vice president’s progressive policy proposals which are displeasing big banks, most notably his push to allow consumers to set up bank accounts through the Federal Reserve and access banking services at the U.S. Post Office.
Biden’s joint policy drafting with Sen. Bernie Sanders (I-VT), announced to rally stalwart Sanders and Sen. Elizabeth Warren (D-MA) supporters at the Democrat National Convention and beyond, have produced some fairly progressive economic policy plans.
Adding to the confusion is the fact that while the Sanders’ camp assumed the joint policy exercise charted the course for Biden’s official banking and investment policies, now Biden staffers are telling reporters they were “merely recommendations.”
Banks have enjoyed a nice run under President Donald Trump, at least when it comes to regulation. The industry saw a huge corporate tax cut, a large rollback of the Dodd-Frank Act, and the relaxing of the Volcker Rule. As such, it is unlikely that Wall Street would take massive crack downs lying down. Now it looks like Wall Street firms won’t have to worry.
Financial advisory firm Signum Global Advisors told clients it wasn’t convinced Joe Biden would be nearly as progressive as some fear if he wins the November election. The Biden-Sanders policy agenda “is aspirational; it pays lip service to some of the party’s more progressive ideas, though has few specifics about how ideas will be achieved, and generally repeats most of the moderate ideas from the Biden campaign’s website,” said Signum’s note to clients.
As even the Washington Post noted: “Wall Street leaders plan to have their way with a president many expect to be unusually susceptible to outside pressure.”
Realistically, what Biden can accomplish if he wins the White House will also depend on other factors—like what he can accomplish legislatively in a polarized Congress and who he appoints to lead key agencies including the Securities and Exchange Commission.
But with less than two months until election day, what is clear is that Wall Street doesn’t really know what a Biden victory will mean.
The mixed signals on financial regulation also highlight issues that could create significant fissures within the Democrat party regarding the nation’s economic policy, pitting more moderate Democrats against progressives such as Sanders, Warren and Rep. Alexandria Ocasio-Cortez (D-NY).
Those differences have reared their head in a number of ways during the pandemic, including in floor fights at the Democrat National Convention regarding how much more the government should provide in economic rescue during the pandemic.
“Biden did little to clarify where he would land, as he continues to weigh how ambitious his agenda will be,” the Washington Post noted.