Wall Street firms gambled on Mitt Romney and lost. Now, faced with the prospect of even tougher regulations in President Barack Obama’s second term, they have to build better ties with the new financial regulators he will appoint.
Obama lost the support of many bankers in the aftermath of the 2008 financial crisis and the passage of the 2010 Dodd-Frank financial reform law which sought to shore up the financial system but also cost banks billions of dollars in annual profit. He has openly stated his distaste for “fat cat bankers” who “don’t get it”, and bankers fears more losses ahead if they cannot influence how the Dodd-Frank rules are implemented.
Wall Street firms are also worried about Elizabeth Warren whose victory in the Massachusetts Senate race may galvanise her to push for more regulations on bank lending to protect consumers. Warren helped create the Consumer Financial Protection Bureau, which critics say could weigh the economy with new rules.