Thursday, November 4, 2010
Wall Street certainly made its displeasure clear to Democrats. During the 2008 campaign, Goldman Sachs — through individuals and its political action committees — gave 25 percent of campaign cash to Republicans. This time around, it was 59 percent. JPMorgan went from 40 percent to 52 percent and it was the same story, more or less, for Citigroup and Bank of America Merrill Lynch.
So what kind of return on investment might they expect? The House Financial Services Committee will now be run by Republicans who all thought Dodd-Frank considerably overreached. Any new attempts to regulate away banking profits and limit the size of institutions will be non-starters. The GOP also will have a greater ability to influence technical tweaks to the legislation and strictly oversee the regulators writing the rules. Both should moderate the reform’s impact, if only at the margins.
Banks have complained all year they have no friends left in Congress. Tuesday’s election may not have changed the situation as much as they had hoped.