Breakingviews - Biden’s finance squad is a progressive fig leaf

U.S. President-elect Joe Biden speaks about health care and the Affordable Care Act (Obamacare) during a brief news conference at the theater serving as his transition headquarters in Wilmington, Delaware, U.S. November 10, 2020. REUTERS/Jonathan Ernst

NEW YORK (Reuters Breakingviews) - Joe Biden is assembling the kind of transition team that gives Wall Street the chills. The U.S. president-elect’s agency review squad, which will help size up bodies that oversee financial firms, includes many left-leaning voices – including people who have pushed for tougher regulation on big banks. That could influence the kind of policies he champions – but it’s a fair bet that bankers will still have Biden’s ear.

The roll call of agency reviewers announced on Tuesday is decidedly light on banking and finance executives. For example, there’s Dennis Kelleher of Better Markets, which promotes financial industry reforms, and Michael Barr, who was a key architect of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act.

Even those with banking experience don’t look like cheerleaders. For example, Gary Gensler – who leads the team auditing the Federal Reserve, Banking and Securities Regulators group – worked at Goldman Sachs. But he pushed through tougher derivatives rules as the head of the Commodity Futures Trading Commission after the 2008 financial crisis.

Still, this doesn’t mean the finance industry has no influence. Jeffrey Zients, who has a long history in finance and politics, is co-chair of Biden’s transition team. And industry professionals donated at least $74 million to get him elected, according to the Center for Responsive Politics, and may offer advice on appointments and policies. Notable supporters include Centerview Partners co-founder Blair Effron, Greycroft co-founder Alan Patricof and Morgan Stanley Vice Chairman Tom Nides.

Without question, Biden is making an important statement by amassing one of the most diverse review teams ever – with 40% from historically unrepresented communities. And it includes figures, like Mehrsa Baradaran, professor of law at the University of California, Irvine, who have advocated for addressing racial inequities in banking. This suggests Biden may focus on policies that help close the racial wealth gap or improve middle class opportunity – but not try to break up large banks.

Ultimately, the team makeup may matter less than the outcome of two remaining Senate runoff elections – both in the state of Georgia – that take place in January. If either goes Republican, that party will retain control of congress’s upper chamber, meaning Biden will then have a tough time getting progressive appointees approved, let alone laws passed. The next president may be styling himself as a critic of Wall Street – but that doesn’t mean he’ll act like one.


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