Presidential candidate Hillary Clinton started her campaign with a promise to place more restrictions on Wall Street bankers, but her actions are not always matching her words. Earlier this year, she pledged to up bank fees and propose stricter banking regulations at the time her party colleagues Bernie Sanders and Elizabeth Warren were noting the system still served “those at the top.”
However, despite Clinton’s tough-on-crime attitude, Wall Street doesn’t look intimidated. In fact, bankers have poured millions of dollars into her campaign hoping she will not alter the Dodd-Frank legislation so dear to them.
“I don’t think Clinton wakes up thinking about Wall Street,”
said a Wall Street lobbyist.
And leaked emails from her campaign chair John Podesta’s Gmail account point in the same direction.
Wall Street Backs Clinton over Trump
In addition, even though progressive Democrats have tried to steer her into reviving the Glass-Steagall Act, which will divide the investment and commercial banking sectors, Clinton said no. Also, she refused to tax financial transactions, another one of progressives’ dreams. Instead, she opted to tax just high-speed traders’ canceled orders.
Yet, Wall Street would rather back her in this presidential campaign simply because she’s not Donald Trump. Bankers are concerned that the Republican firebrand may not be as complacent. In fact, analysts fear Trump could hamper free trade, shake up markets, and damage key geopolitical relationships.
For this reason, after Trump announced his presidential bid, Wall Street money started flowing towards the Democrat’s pockets. The phenomenon contradicts the decades-old relationship between bankers and the GOP. A Reuters report shows for every dollar bank holding companies donated to Trump they sent $10 more to Clinton campaign. Ironically, bankers helped Republican candidate Mitt Romney twice as much as they helped Obama in 2012.
To date, hedge fund managers and private equity firms poured over $56 million in Clinton’s supporting groups and her campaign. By contrast, the banking sector gave Trump camp just $243,000.
Brian Gardner of the NYC-based Keefe Bruyette & Woods believes Wall Street political donors would rather support the “devil” they know over the devil they don’t. And Wall Street knows the Clintons could work for it as Bill Clinton pushed for financial deregulation in the 1990s. Gardner believes this created a “comfort level” between Clinton and The Street’s banking giants.
The Worst-Case Scenario
Nevertheless, bankers have a worst-case scenario in mind if Clinton wins and Democrats reclaim the majority in Congress. They fear that progressives such as Sanders and Warren could then pass tax laws and appoint officials not on their liking. Warren has recently started a feud with the Securities and Exchange Commission Chair Mary Jo White. Plus, she stopped Obama from appointing a Wall Street banker as Treasury Undersecretary for Domestic Finance last year.
While Warren and the likes could press the party’s presidential nominee to rein in Wall Street, Clinton heavily relies on progressives to reanimate supporters. One analyst noted Warren is a “very powerful ally.”
Nevertheless, polls show Democrats will probably not win the House while the Senate’s future remains unclear. And even if they do win the Senate, the leader will probably be a moderate like New York Senator Chuck Schumer who has already pushed for Wall Street bankers’ interests.
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