President-elect Joe Biden’s transition team features some Wall Street detractors. The team’s composition is a signal that the freewheeling days enjoyed during Trump are about to end. So, if you’re looking for corporate and financial leaders among its members, you might have to look in vain.
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New Sheriff in Town
Leading the team to run financial regulations is Gary Gensler. A former Goldman Sachs executive and Obama regulator, Gensler is a nemesis for big banks. Also, Gensler is the former chairman of the Commodity Futures Trading Commission. During his stint, he led efforts to impose rules on the financial derivatives market. Previously, derivatives fueled the 2008 Wall Street meltdown. Moreover, his time as a Goldman Sachs partner showed him how the industry works and how it dodges oversight.
Gensler is also an advocate of cryptocurrency. He campaigned to stop detractors of the crypto from likening it to Ponzi schemes. He’ll find support from progressive Democrats who want more control of Wall Street. Also, Gensler has close ties with transition co-chair Ted Kaufman. The latter is the Delaware senator who helped push tougher Wall Street regulations. Gensler also identifies with progressive Senator Elizabeth Warren.
The Federal Reserve, Banking and Securities Regulators members are veterans who fought big banks. They include Dennis Kelleher, head of financial reform group Better Markets Inc. Another member, Mehrsa Baradaran, is a law professor at UC – Irvine. She is a known advocate for adding financial services to the Postal Service. Once implemented, a postal bank poses competition to local banks.
In addition, there is Andy Green, managing director for the Center for American Progress. As a lead congressional staffer, he helped draft the Volcker Rule. This resulted in curbing speculative trading by big banks. Amanda Fischer is a policy director for the Washington Center for Equitable Growth policy. As an aide to Senator Sherrod Brown, she helped bring down opposition to a deregulation bill.
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The team energized progressives within the Democratic party. Former Warren aide Bharat Ramamurti said it’s an “all-star” team. They consist of “smart, aggressive experts who understand exactly how our current financial rules fall short.”
Former Obama Treasury official Jonah Crane said the team “understand(s) the structural inequalities in our economy.” They “want to see the financial sector play a bigger role in building a more inclusive society.” He expects the focus “to carry through to the new administration.” What’s more, it doesn’t matter “which individuals end up with actual administration roles.”
The Larger the Bank, the More Nervous
Already, banks are feeling the initial squeeze. An anonymous major bank official said the team “didn’t give me a warm fuzzy feeling.” Bank lobbyists decried the lack of team members with competing views. Richard Hunt, Consumer Bankers Association CEO, thinks it’s a missed opportunity. He said: “It would have been better had you had more voices at the table.”
Cam Fine, the former CEO of the Independent Community Bankers of America, says that the team is “enormously consequential.” He said, “The larger the bank the more nervous they are.” In addition, he noted that the transition team’s “views about Wall Street’s activities — especially the mega-banks but also the very largest regionals — are well known. They believe in tighter controls and greater regulation around consumer protections and investor protections.”
Where does Biden stand?
It’s not a guarantee that the transition team of progressives will get Biden’s full attention. Accordingly, their role is more scouting incoming nominees rather than actual policy creation. They hope Biden will echo calls made by his Democrat rivals in cracking down on financial firms. Progressives feel that some firms have yet to face penalties for causing the 2008 crisis. In fact, some firms continue to enjoy tax cuts under the Trump administration.
During the campaign, investment firms poured more money into Biden’s kitty than Trump’s. Executives hoped that Biden would present a smart contrast to the volatile Trump. For example, an early Biden campaign ad said: “No one has to tell him Wall Street didn’t build this country.” Instead, they are getting one backstopped by progressives who have axes to grind. As such, expect moderate Democrats to push back on the appointments or recommendations.
Watch this as CNBC News reports that President-elect Joe Biden’s transition team started moving forward with their plans:
Known for being a dealmaker and a consensus-builder, can Biden strike a balance? Will he alienate his progressive party mates by compromising with big business, or will he bite the industry hand that fed him during the campaign? Let us know what you think by sharing your comments below.