Hillary Clinton: Wall Street's favorite
enemy
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[November 02, 2016]
By Amanda Becker
WASHINGTON (Reuters) - Hillary Clinton
began her presidential campaign by promising to do what it takes to rein
in Wall Street.
Boosted by Wall Street's toughest critics, U.S. senators Bernie Sanders
and Elizabeth Warren, the Democratic candidate has declared "the deck is
still stacked in favor of those at the top" and said she would raise
bank fees and tighten banking regulations. She has encouraged regulators
to break up too-risky banks.
And yet, Wall Street appears unperturbed by the prospect of a Clinton
presidency. In fact, the banking industry has supported Clinton with
buckets of cash and stocks have sold off on days when the Clinton
campaign stumbles. Privately, bankers say that they trust her to remain
a pragmatist who will keep the current regulatory regime laid down by
the Dodd-Frank Wall Street reform legislation passed in 2010.
“I don’t think Clinton wakes up thinking about Wall Street," one senior
banking industry lobbyist said.
There are hints in apparently leaked email discussions among Clinton's
campaign staff that bankers are not far off the mark when they count on
her to tread lightly.
Pressed during the campaign by progressive Democrats to call for a
revival of the Glass-Steagall Act that would require separation of
commercial and investment banking, Clinton ultimately refused. She also
weighed another progressive favorite - a tax on financial transactions-
but instead recommended a far narrower plan to tax only canceled orders
by high speed traders.
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Ultimately, what bankers most like about Clinton is that she is not
Donald Trump.
Many financiers fear her unorthodox Republican rival could disrupt
global trade, damage geopolitical relationships and rattle markets,
industry analysts and participants say.
“Those are the kind of things that corner offices think about,” said
Karen Shaw Petrou of Federal Financial Analytics Inc, whose firm advises
financial firms about U.S. regulatory policy. “The overriding concern
about Trump has dominated people’s thinking."
Trump's candidacy has upended traditional political alliances and
bankers that usually contribute more to the Republicans have been
flinging money at Clinton.
Employees of the 17 largest bank holding companies and their
subsidiaries have been sending her $10 for every $1 they contributed to
Trump, according to a Reuters analysis. In 2012, the same group
contributed twice as much to Republican candidate Mitt Romney as it did
to President Barack Obama's re-election campaign.
DEVIL YOU KNOW
People who work for hedge funds and private equity firms have
contributed more than $56 million to Clinton’s presidential campaign and
the supporting groups that face no legal cap on donations. Trump’s
campaign and related groups received just $243,000 from donors in the
same sector, according to data from the Center for Responsive Politics.
“It’s basically going with the devil you know over the devil you don’t,”
said Brian Gardner, a managing director of New York investment firm
Keefe Bruyette & Woods. What also helped, he said, was the familiarity
with Hillary and Bill Clinton dating back to the 1990s when her husband
was president and ushered in a period of financial deregulation.
“There is a closeness and a comfort level between the titans on Wall
Street and the Clintons," he said.
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![](../images/110216PICS/news_q27.jpg)
Democratic presidential nominee Hillary Clinton speaks at a campaign
rally in Sanford, Florida, U.S. November 1, 2016. REUTERS/Brian
Snyder
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For bankers, the biggest worry is a scenario where Clinton wins and
the Democrats take control of the House and the Senate, with
progressives such as Warren and Sanders holding sway over everything
from new tax laws to appointments of regulators.
Already, Warren has called for immediate dismissal of the Securities
and Exchange Commission Chair Mary Jo White. Last year, Warren
successfully led a movement to derail Obama’s plan to appoint banker
Antonio Weiss to the top job at Treasury.
Warren and other progressives will press Clinton to be tough on Wall
Street in return for their campaign support.
Clinton "leaned heavily on Senators Elizabeth Warren and Bernie
Sanders, and progressive ideas, when she needed to excite voters,”
Adam Green with the Progressive Change Campaign Committee said.
“Elizabeth Warren has proven she’s a very powerful ally to have on
your side. And it’s well known she’s also a formidable opponent to
have against you,” Green said.
However, recent polls suggest it is unlikely that Democrats will
take the House and the future of the Senate is far from certain.
Even if the Senate goes Democratic, it is likely to be led by New
York Senator Chuck Schumer, a moderate who has represented Wall
Street with the industry's backing.
Clinton has said she will propose a "risk fee" on the largest
financial firms and tighten up rules which allow banks to circumvent
bans on proprietary trading by investing in hedge funds. Like Trump,
she has proposed to end the tax break that private equity investors
enjoy, termed "carried interest."
Yet such provisions will be probably tied up in a much larger tax
initiative that will involve months, if not a year or more, of horse
trading in Washington. Ultimately, it could end up overshadowed by
other progressive goals, such as infrastructure funding, college
affordability, or raising the minimum wage.
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Those are the causes that Clinton has prioritized and they are
likely to supersede her anti-bank rhetoric, say bankers. One
industry trade group representative said: "We're not in her top 10
to take care of."
(Reporting by Amanda Becker; Additional reporting by Patrick Rucker
in Washington and Olivia Oran and Grant Smith in New York; Editing
by Linda Stern and Tomasz Janowski)
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