Beautiful Virgin Islands

Tuesday, Jul 22, 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
UK Government Considers Dropping Demand for Apple Encryption Backdoor
Severe Flooding in South Korea Claims Lives Amid Ongoing Rescue Operations
Japanese Man Discovers Family Connection Through DNA Testing After Decades of Separation
Russia Signals Openness to Ukraine Peace Talks Amid Escalating Drone Warfare
Switzerland Implements Ban on Mammography Screening
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
Pogacar Extends Dominance with Stage Fifteen Triumph at Tour de France
CEO Resigns Amid Controversy Over Relationship with HR Executive
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
NVIDIA Achieves $4 Trillion Valuation Amid AI Demand
US Revokes Visas of Brazilian Corrupted Judges Amid Fake Bolsonaro Investigation
U.S. Congress Approves Rescissions Act Cutting Federal Funding for NPR and PBS
North Korea Restricts Foreign Tourist Access to New Seaside Resort
Brazil's Supreme Court Imposes Radical Restrictions on Former President Bolsonaro
Centrist Criticism of von der Leyen Resurfaces as she Survives EU Confidence Vote
Judge Criticizes DOJ Over Secrecy in Dropping Charges Against Gang Leader
Apple Closes $16.5 Billion Tax Dispute With Ireland
Von der Leyen Faces Setback Over €2 Trillion EU Budget Proposal
UK and Germany Collaborate on Global Military Equipment Sales
Trump Plans Over 10% Tariffs on African and Caribbean Nations
Flying Taxi CEO Reclaims Billionaire Status After Stock Surge
Epstein Files Deepen Republican Party Divide
Zuckerberg Faces $8 Billion Privacy Lawsuit From Meta Shareholders
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
SpaceX Nears $400 Billion Valuation With New Share Sale
Microsoft, US Lab to Use AI for Faster Nuclear Plant Licensing
Trump Walks Back Talk of Firing Fed Chair Jerome Powell
Zelensky Reshuffles Cabinet to Win Support at Home and in Washington
"Can You Hit Moscow?" Trump Asked Zelensky To Make Putin "Feel The Pain"
Irish Tech Worker Detained 100 days by US Authorities for Overstaying Visa
Dimon Warns on Fed Independence as Trump Administration Eyes Powell’s Succession
Church of England Removes 1991 Sexuality Guidelines from Clergy Selection
Superman Franchise Achieves Success with Latest Release
Hungary's Viktor Orban Rejects Agreements on Illegal Migration
Jeff Bezos Considers Purchasing Condé Nast as a Wedding Gift
Ghislaine Maxwell Says She’s Ready to Testify Before Congress on Epstein’s Criminal Empire
Bal des Pompiers: A Celebration of Community and Firefighter Culture in France
FBI Chief Kash Patel Denies Resignation Speculations Amid Epstein List Controversy
Air India Pilot’s Mental Health Records Under Scrutiny
Google Secures Windsurf AI Coding Team in $2.4 Billion Licence Deal
Jamie Dimon Warns Europe Is Losing Global Competitiveness and Flags Market Complacency
South African Police Minister Suspended Amid Organised Crime Allegations
Nvidia CEO Claims Chinese Military Reluctance to Use US AI Technology
Hong Kong Advances Digital Asset Strategy to Address Economic Challenges
Australia Rules Out Pre‑commitment of Troops, Reinforces Defence Posture Amid US‑China Tensions
Martha Wells Says Humanity Still Far from True Artificial Intelligence
Nvidia Becomes World’s First Four‑Trillion‑Dollar Company Amid AI Boom
U.S. Resumes Deportations to Third Countries After Supreme Court Ruling
Excavation Begins at Site of Mass Grave for Children at Former Irish Institution
Iranian President Reportedly Injured During Israeli Strike on Secret Facility
×