What does the new administration mean for Wall Street? Jim Cramer's first reaction to the election is live on TheStreet's Facebook page tomorrow morning at 8 a.m. ET. He joins our team of reporters along with experts and analysts tracking the markets.
Election Day is here, finally, and beyond determining the fates of Hillary Clinton and Donald Trump, it may return the Senate to Democratic control. That's a high-risk proposition for the nation's biggest banks.
While some analysts predict any Democratic victory in the Senate would be extremely narrow, it would nonetheless give Sen. Sherrod Brown, D-Ohio, the banking committee chairmanship he needs to more effectively push his agenda of heightened regulation. That includes the legislation he co-sponsored with Louisiana Republican Sen. David Vitter to raise banks' capital buffers to levels that would push them to sell assets.
"The real focus has really been putting higher capital levels on the largest financial institutions based on their mix of business," said Independent Community Bankers of America vice president Paul Merski. "There would be a greater focus on getting that over the winning line in a Brown committee."
The lack of discussion about Wall Street during three Clinton vs. Trump presidential debates suggests that influential legislators on Capitol Hill, including Brown, may be in the driver's seat when it comes to financial regulation. The largest banks, including Bank of America (BAC) , JPMorgan Chase (JPM) , Wells Fargo (WFC) , Citigroup (C) , Morgan Stanley (MS) and Goldman Sachs (GS) , are most likely to be hit with tougher rules.
A Brown banking panel would give progressives, including Sen. Elizabeth Warren, D-Mass., a member of the banking panel, a great deal of influence. For example, Brown is more likely to give Warren a greater platform, through hearings and other means, to drive legislation she introduced that would seek to re-impose a version of the 1933 Depression-era Glass-Steagall Act, effectively breaking up the largest banks by separating their investment banking units from the commercial divisions.
"This is the one issue that unites the far left and the far right," said Cowen Washington Research Group analyst Jaret Seiberg.
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