Wall Street ponders election results


Since the presidential election heated up in earnest, Wall Street seemed to be yearning for a Romney victory.

Now that a President Obama victory has dawned, one might think that Wall Street is in for a tough time, but that's not likely to be case. The fact is that all the major reform efforts that the 2008 financial crisis demanded have already been enacted. We are firmly into the implementation phase of several big rules, such as the Volcker Rule, the OTC derivatives rules, the alternative investment registration and disclosure rules and so on.

The financial services industry has lobbied hard to ensure that these new rules are implemented in ways that the industry finds palatable, and you would be hard pressed to find anyone that would disagree with the notion that the lobbying effort has gone well for the industry.

At this point, one might credibly argue that Wall Street has adjusted to the new regulatory climates ushered in after the financial crisis, and is better off going with the "foe they know," even if they do not much like him. I do not anticipate a lot of massive changes for Wall Street that aren't already underway. One might think that the private equity industry has a lot to lose still. Taxation issues might loom large. We may likely see a more serious attempt to tax carried interest at ordinary income rate as opposed to the capital gains rate.

But all in all, the industry knows what it is getting. There are no real surprises looming as a result of the President's victory. 

For more:
- here's an essay in DealBook about the president's relationship with Wall Street 

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