Beautiful Virgin Islands

Tuesday, Jun 03, 2025

Joe Biden fires an early warning shot at Wall Street

Joe Biden fires an early warning shot at Wall Street

Elizabeth Warren's fingerprints are all over the Biden transition, much to Wall Street's dismay.

President-elect Joe Biden's agency review teams include several people who share Warren's reputation for being tough on the financial industry. It's more evidence of the influence of Warren, a fierce opponent of big banks and the excesses of Wall Street -- as well as an early signal that Wall Street will be under much greater scrutiny, especially compared to four years of President Donald Trump's efforts to dismantle regulation and unshackle big banks.

"The big-bank CEOs who read that list are probably somewhat concerned," said Isaac Boltansky, director of policy research at Compass Point Research & Trading. "Progressives absolutely won the day on this."

Biden tapped about 500 people to work with government agencies, from the CIA to the United States Postal Service, and help shape the future of government policy and appointments.

'He made a lot of enemies'


Perhaps top on Wall Street's worry list is Gary Gensler, who will lead the team working with financial regulatory agencies including the Federal Reserve, SEC and FDIC. Gensler led the Commodity Futures Trading Commission from May 2009 to January 2014.

Among the Obama-era regulators, Gensler was the most aggressive in implementing the Dodd-Frank financial reform law that Wall Street opposed.

"Gary Gensler undoubtedly brings back some bad memories," said Boltansky.

Although Gensler is a former Goldman Sachs banker, he is now viewed as a tough-on-Wall-Street ally of Warren.

"He made a lot of enemies in DC and the industry," said Ed Mills, Washington policy analyst at Raymond James. "The fact he's leading this is a signal to the Elizabeth Warren wing of the Democratic Party that they have a voice on financial regulatory picks."

Biden taps vocal critic of big banks, private equity


The financial regulatory team also includes Dennis Kelleher, the CEO of Better Markets, a nonprofit founded after the 2008 financial crisis focused on holding Wall Street accountable.

Kelleher, who declined to comment, is not exactly from the Robert Rubin wing of the Democratic party. (Rubin, a former Goldman Sachs chairman, served as Treasury secretary under President Bill Clinton.)

Last month, Kelleher condemned Goldman Sachs as a "recidivist lawbreaker" that has "preyed upon and ripped off countless Main Street Americans and many others."

In a June interview with CNN Business, Kelleher slammed what he called the "predatory private equity business model" of firing workers and unloading pension obligations after leveraged buyouts.

"Once a private equity firm extracts the maximum amount of value, it then tries to flip it into the public markets so it can cash out on the near-carcass of a corporation," Kelleher said.

That reads like a jab from one of Warren's infamous bank CEO takedowns.

Meanwhile, Biden has a separate team overseeing the transition of the Consumer Financial Protection Bureau, the agency that is a Warren brainchild of Warren.

That team is being led by Leandra English, the CFPB's former deputy director. In 2017, English unsuccessfully tried to block Trump from installing as the agency's acting director Mick Mulvaney -- who once pushed to abolish the CFPB. While testifying as acting director, Mulvaney defended his tenure by saying, "I have not burned the place down."

"Leandra English has deep experience, not just on the issues, but on how the mechanics of the CFPB works," said Compass Point's Boltansky.

He noted that the Trump transition met some "bumps in the road" because the president tapped some people who didn't have much experience in government.

No major overhaul is coming


Of course, it's important to note that Biden has only named a transition team, not a full Cabinet. There is no guarantee his picks to lead major agencies will ultimately please Warren and the progressive wing of the party.

And even if Biden wanted to pick regulators who would be very tough on Wall Street, Republicans in the US Senate may have the votes to block those appointments. (Unless Democrats sweep the runoff races in Georgia, Republicans will retain control of the Senate.)

"Progressives are absolutely first on that invisible scoreboard between progressives and centrists," Boltansky said.

But Boltansky noted that "we're at a very different point in the evolution of financial regulation" than in 2009, when the Obama administration was taking over. Back then, during the Great Recession, it was clear that a major Wall Street overhaul was not just inevitable, but necessary. And it took years to implement the Dodd-Frank law of 2010.

Today, Wall Street is not viewed as the top priority, with the Biden administration likely to focus instead on the pandemic, inequality and the climate crisis. And the fact that banks have withstood the turmoil of the health crisis (so far at least) suggests Dodd-Frank worked to strengthen the system.

Is too-big-to-jail over?


But that doesn't mean Biden-appointed regulators won't put a stop to practices they view as unfair. Analysts are warning the Biden administration could crack down on overdraft fees, the banking industry's $11 billion gravy train that critics say punish society's most vulnerable.

And Biden's regulators could take a much tougher stance on bad behavior like the laundry list of scandals at Wells Fargo (WFC).

"If you're a bank that has a scandal, then you need to be worried," said Mills, the Raymond James analyst.

It's no coincidence that Goldman Sachs, JPMorgan Chase and Citigroup all reached major settlements this fall with the Trump administration ahead of the change in power. Even former Wells Fargo CEO John Stumpf agreed to a personal $2.5 million penalty over his role in the fake-accounts scandal.

Still, Biden will be under pressure from progressives to take a tough stance on enforcement. Critics say the Obama administration adopted a too-big-to-jail mindset by failing to go after big banks and their top executives.

Yet like other Democrats, Biden will have to balance that urge to root out Wall Street wrongdoing with the need to keep capital flowing.
"They need the economy to work to get reelected," said Mills. "And you can't have the economy work if the banking sector isn't."

Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
China Accuses US of Violating Trade Truce
Panama Port Owner Balances US-China Pressures
France Implements Nationwide Outdoor Smoking Ban to Protect Children
German Chancellor Merz Keeps Putin Guessing on Missile Strategy
Mandelson Criticizes UK's 'Fetish' for Abandoning EU Regulations
British Fishing Boat Owner Fined €30,000 by French Authorities
Dutch government falls as far-right leader Wilders quits coalition
Harvard Urges US to Unfreeze Funds for Public Health Research
Businessman Mauled by Lion at Luxury Namibian Lodge
Researchers Consider New Destinations Beyond the U.S.
53-Year-Old Doctor Claims Biological Age of 23
Trump Struggles to Secure Trade Deals With China and Europe
Russia to Return 6,000 Corpses Under Ukraine Prisoner Swap Deal
Microsoft Lays Off Hundreds More Amid Restructuring
Harvey Weinstein’s Publicist Embraces Notoriety
Macron and Meloni Seek Unity Despite Tensions
Trump Administration Accused of Obstructing Deportation Cases
Newark Mayor Sues Over Arrest at Immigration Facility
Center-Left Candidate Projected to Win South Korean Presidency
Trump’s Tariffs Predicted to Stall Global Economic Growth
South Korea’s President-Elect Expected to Take Softer Line on Trump and North Korea
Trump’s China Strategy Remains a Geopolitical Puzzle
Ukraine Executes Long-Range Drone Strikes on Russian Airbases
Conservative Karol Nawrocki wins Poland’s presidential election
Study Identifies Potential Radicalization Risk Among Over One Million Muslims in Germany
Good news: Annalena Baerbock Elected President of the UN General Assembly
Apple Appeals EU Law Over User Data Sharing Requirements
South Africa: "First Black Bank" Collapses after Being Looted by Owners
Poland will now withdraw from the EU migration pact after pro-Trump nationalist wins Election
"That's Disgusting, Don’t Say It Again": The Trump Joke That Made the President Boil
Trump Cancels NASA Nominee Over Democratic Donations
Paris Saint-Germain's Greatest Triumph Is Football’s Lowest Point
OnlyFans for Sale: From Lockdown Lifeline to Eight-Billion-Dollar Empire
Mayor’s Security Officer Implicated | Shocking New Details Emerge in NYC Kidnapping Case
Hegseth Warns of Potential Chinese Military Action Against Taiwan
OPEC+ Agrees to Increase Oil Output for Third Consecutive Month
Jamie Dimon Warns U.S. Bond Market Faces Pressure from Rising Debt
Turkey Detains Istanbul Officials Amid Anti-Corruption Crackdown
Taylor Swift Gains Ownership of Her First Six Albums
Bangkok Ranked World's Top City for Remote Work in 2025
Satirical Sketch Sparks Political Spouse Feud in South Korea
Indonesia Quarry Collapse Leaves Multiple Dead and Missing
South Korean Election Video Pulled Amid Misogyny Outcry
Asian Economies Shift Away from US Dollar Amid Trade Tensions
Netflix Investigates Allegations of On-Set Mistreatment in K-Drama Production
US Defence Chief Reaffirms Strong Ties with Singapore Amid Regional Tensions
Vietnam Faces Strategic Dilemma Over China's Mekong River Projects
Malaysia's First AI Preacher Sparks Debate on Islamic Principles
White House Press Secretary Criticizes Harvard Funding, Advocates for Vocational Training
France to Implement Nationwide Smoking Ban in Outdoor Spaces Frequented by Children
×