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Wall Street Worried It Might Be Underrepresented In Trump Administration

Big banks need a friend at the Federal Reserve.
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One might be forgiven for thinking that the banking industry is pretty satisfied with President Trump’s staffing choices, what with the White House inner circle looking like a GoldmanSachsAlumniAssociation meeting. Why, just this week it was decided that having only one Goldman veteran in the top two spots at the Treasury Department was not sufficient. And even when appointing the unElected, as in his picks to lead the SEC and CFTC, President Trump tends to favor Goldman allies or like-minded foxes to guard the regulatory henhouse.


You would be quite wrong, however, for it seems that Wall Street will not be satisfied unless one of its own (not Anthony Scaramucci, alas) gets one particular still-open job: that of the Federal Reserve’s vice chairman for supervision. This is because he (and it will be a he) is the person who gets to decide how much money banks have to squirrel away for a rainy day. And right now, the little devil populist whispering into Trump’s right ear—you know, the same guy who told him to bring back Glass-Steagall—is telling him the job must go to FDIC vice chairman Thomas Hoenig, the conservative intellectual architect of that ridiculous plan and its adjacent requirement for much higher capital buffers. But the mini Gary Cohn hoisting his grundle to the president’s left ear has a different person in mind.

Veteran Wall Street lawyer Thomas Vartanian also is a candidate for the position, the Journal reported this week. In a series of recent op-eds the in American Banker, Mr. Vartanian adopted a mild deregulatory stance. In a piece from November, for instance, he argued that rule-making should take into account the costs of regulations, and that enforcement agencies should be streamlined. Mr. Vartanian’s career background as a lawyer representing hedge funds and other Wall Street firms suggests he would at least be sympathetic to the industry.

Cohn's drinking buddy is happy to offer up a few candidates of his own, apparently without irony.

“Gary was not the first person from Goldman Sachs to join the government, and we hope and expect that he will not be the last,” Mr. Blankfein wrote in the letter. “Five of my most recent predecessors went into government service, and that has not been by happenstance.”

The Trump Job Banks Care About Most [WSJ]
Blankfein Defends 'Government Sachs' [WSJ]
James Donovan Is Latest Goldman Sachs Executive to Join Trump Administration [DealBook]
Trump Picks a Regulator Who Could Help Reshape Dodd-Frank Act [DealBook]


By US government [Public domain], via Wikimedia Commons

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