In appointing Gary Gensler to serve as chairman of the Securities and Exchange Commission, President-elect Joe Biden is likely to please progressives, who have been agitating for more banking supervision after four years of deregulation policy under President Donald Trump at the SEC, Jay Clayton , who left office in December.
“Gensler is an excellent choice to head the agency,” said Barbara Roper, director of investor protection for the Consumer Federation of America. “He has as much knowledge about the markets as anyone on Wall Street, so he can’t be intimidated. He is an experienced regulator who knows how to do things ”.
Gensler spent 18 years at Goldman Sachs before joining the Treasury Department during the Clinton administration. After a stint at the Commodity Futures Trading Commission – where he earned the reputation of a strict regulator – he served as an economic advisor for Hillary Clinton’s 2012 and 2016 presidential bids and, since the 2020 election, he has led the Biden transition team financial regulatory group.
At the CFTC, “Gary proved that he was relentless and effective in adopting and implementing difficult rules. He worked very quickly, very carefully and very aggressively, ”said Tyler Gellasch, executive director of the investor advocacy group Healthy Markets.
“Gary’s main selling point is his ability to eliminate noise and move on. He was also able to defend his rules, ”said Gellasch.
The Biden administration will likely look to Gensler, who teaches a class on blockchain technology at MIT, to create regulatory guidelines on cryptocurrency.
The left flank of the Democratic party retreated over possible choices by the cabinet and agency with Wall Street origins, preferring candidates from the academy and left-wing think tanks. But observers say Gensler’s effectiveness in successfully pursuing and implementing regulatory reforms after the financial crisis was due, in large part, to his deep first-hand knowledge of the inner workings of the sector.
Financial policy experts say undoing his predecessor’s work is likely to be high on Gensler’s to-do list.
“I hope the SEC’s priority in the Biden administration is first and foremost investor protection,” said Karen Shaw Petrou, co-founder of Federal Financial Analytics, a financial policy consulting and analysis firm. These actions would likely include restoring an Obama-era rule that forced brokers to work in their clients’ best interests, she added. “This could help retail investors by reducing conflicts of interest.”
Progressives are agitating for a new financial regulatory regime that will lead companies to incorporate the assets of workers and shareholders, racial justice and environmental issues in their disclosures. “There is a pent-up demand to modernize the disclosures of our public companies to address concerns about environmental, social and governance issues, which I think will make this an initial priority,” said Roper.
“I think much of the agency’s agenda will focus on what I would call basic corporate responsibility,” said Gellasch, adding that the SEC needs to “ensure that it is pulling a lot of private capital, venture capital and private debt markets back one regulated space. “
The Biden administration will likely look to Gensler, who teaches a class on blockchain technology at MIT, to develop regulatory guidelines around the nascent cryptocurrency field.
Proponents of financial reform also want to require companies to provide more information about their PAC donations – a topic that has had a renewed focus in recent days, as much of corporate America has pledged to reexamine its political spending after the Capitol rebellion. .
“The SEC sets the rules for the information that companies disclose and what investors and the public can do with that information,” said Gellasch.