By Pete Schroeder and Michelle Price
WASHINGTON (Reuters) - A victory for Democratic presidential nominee Joe Biden on Nov. 3 would spell the end of the party for the banking industry which has enjoyed more than $40 billion in regulatory cuts under U.S. President Donald Trump's business-friendly administration.
But the industry is likely to keep many of its wins as Democrats prioritize more pandemic aid, healthcare, tax reform and financial rules that address racial injustice, environmental and inequality issues, rather than attacking banks, said nearly a dozen lobbyists and policy experts in Democratic circles.
Banks and investors were preparing for a Biden victory over the weekend after Trump tested positive for COVID-19 on Friday, in a blow for his campaign.
"A hypothetical Biden administration will be confronting an economy mired in COVID-19, an unsustainable climate policy, a healthcare system whose flaws were exposed by the disease," said Aaron Klein, a former Treasury Department official during the 2009 financial crisis that badly marred Wall Street's image.
"This is not 2009 where the stability and soundness of the financial system is the top priority for restoring the economy and the semblance of normalcy," said Klein, who is now a policy director at Washington think tank Brookings Institution.
From the relaxation of capital, leverage, liquidity, swap trading and speculative investment rules, to lighter-touch supervision and enforcement, banks have enjoyed a bonanza under the Republican-led Senate and Trump appointees who say the rules were overly burdensome, stymied lending and hurt the economy.
Biden, who was also accused of being too cozy with Wall Street as a senator and later Barack Obama's vice president, has rarely attacked Trump's financial giveaways and has said relatively little on financial reform more broadly.
As progressives pull the Democratic party to the left, policy experts expect a Biden administration to be tougher on financial firms than both the Trump and Obama administrations. Some liberal groups are already pushing Democrats to consider repealing several Wall Street-friendly rules.
But while Democrats may swiftly overturn some financial rules if they take the Senate, they are likely to focus legislative efforts on Trump healthcare, immigration, environmental and tax policies they hate more, said the sources.
That would leave most of Trump's Wall Street giveaways intact initially, and put financial policy in the hands of Biden's regulatory appointees who would get to choose whether to spend years unraveling their predecessors' work.