Whatever chance Wall Street had of seeing the Dodd-Frank financial reform law dismantled died with Mitt Romney’s concession speech Tuesday night.
The Republican nominee railed against the far-reaching legislation, promising to repeal it once he took office. But with President Barack Obama clinching a second term, analysts say the financial services industry must come to terms with the fact that Dodd-Frank will become firmly entrenched.
“Obama has the election behind him and the worry about alienating a lot of the special-interest money at this point,” said Sheila Bair, former chairman of the Federal Deposit Insurance Corp. “This should be all about his legacy now and providing a truly stable financial system, one that serves the credit needs of the economy.”
Whether regulatory reforms have significant or negligible effect on Wall Street will be determined by the potency of the rules coming out of Dodd-Frank — many of which have yet to be finalized.
Financial firms have been outspoken in their criticism of heightened regulation, anticipating that compliance will put a stranglehold on their earnings. Many suspect the Obama administration might ratchet up enforcement in a second term. And the markets seemed to agree.
The administration appears to have no appetite to place additional pressure on the banks, said Jaret Seiberg, senior policy analyst at Guggenheim Partners, adding he suspects the administration may take a moderate approach to implementing financial reform.
— This article appeared on page B1 of the Albuquerque Journal