From The Boston Globe
By Steven Syre
November 9, 2012
Imagine the roulette gambler who puts all his chips — piles of them — on red and then sees fortune turn against him.
This is indeed the fate of the financial industry, which bet so heavily on Mitt Romney and now faces a second Obama administration. Can you feel the chill?
Industries rarely make such lopsided campaign wagers for a very good reason. They still have to get along with whoever wins.
The conflict between the president and leaders of the financial services industry — particularly Wall Street executives — has been both practical and personal. Bankers wanted to dampen or dismantle volumes of new federal regulations aimed at their industry. They would have loved to get rid of the president who labeled them “fat cats.”
This is why people from finance, insurance, and real estate became the biggest industry sector by far contributing to the Romney campaign. The six largest groups of Romney contributors, in order, were employees from Goldman Sachs Group, Bank of America Corp., Morgan Stanley, JPMorgan Chase & Co., Credit Suisse Group, and Wells Fargo & Co. Employees from Citigroup Inc. and Barclays PLC were also among the top 10.
Overall, people who work in the securities and investment businesses gave Romney more than $19 million. And that’s just counting checks written directly to his campaign.
None of them got what they were hoping for with their money. Now they have to deal with the consequences.
Financial executives and administration officials may get over their differences over the next four years. In fact, I’d bet on that.
“It’s time to move on,” says Robert Reynolds, chief executive of Putnam Investments, the Boston money management firm.
Well, that’s half a solution. It may take the White House a little longer to get there.
But banks and other financial companies will have to buck up and deal with a tougher regulatory environment than Romney promised. Most important, that applies broadly to the Dodd-Frank regulatory overhaul and thorny individual elements within that plan, such as the Volcker rule that places trading restrictions on financial institutions. It also applies to the new federal consumer protection bureau and how it will operate over the next four years.
“The election was definitely a win for regulation and a big loss for big banks,” says Mark Williams, a finance and economics lecturer at Boston University.
Williams sees big banks becoming more basic and less risky businesses — as they once were — due to those regulations. He thinks the stock market — which on the day after the election shaved 4 percent to 6 percent off the value of big banks — saw less profit potential and acted accordingly.
“It was a multibillion-dollar reduction in the values of banks across the board,” he says…
Read the full article at BostonGlobe.com.