Joe Biden called on Gary Gensler, the former Goldman Sachs investment banker and financial regulator under the Obama administration, to be the next chairman of the Securities and Exchange Commission.
The selection of Mr Gensler has been linked to the appointment of Rohit Chopra, commissioner at the Federal Trade Commission, to be the next director of the Consumer Financial Protection Bureau, and both herald stricter oversight of the financial services industry by Washington.
Mr. Gensler is a well-known person on Wall Street after leading the Commodity Futures Trading Commission during Barack Obama’s presidency at the height of the financial crisis. He had been a leading candidate for the head of an economic or financial agency after leading Mr Biden’s transition team on the Federal Reserve, banking regulation and securities.
Although Mr. Gensler championed deregulation of the financial services industry decades ago, he is now seen as a proponent of more restraint on the industry. His appointment was applauded by Richard Trumka, president of the AFL-CIO trade union federation, a sign that he was deemed acceptable to the left of the Democratic Party.
“We congratulate Joe Biden for choosing a man who stands up for the public interest against the excesses of Wall Street, who is knowledgeable and who has shown through his work under the Obama administration that he supports working families,” Mr Trumka wrote in a tweet on Monday morning.
Both appointments were greeted by Elizabeth Warren, the Liberal Democrat senator from Massachusetts who was one of the architects of the CFPB when it was created in the aftermath of the financial crisis to curb predatory practices by financial institutions.
“For too long, our banking regulators have behaved as if they were working for the financial institutions they regulate – not the American people. But a big change is coming, ”she wrote on Twitter, saying Mr Biden couldn’t have made“ better choices ”for jobs.
While at the FTC, Chopra helped lead the charge against Big Tech, voting in favor of the agency’s decision to sue Facebook for “illegal monopolization” along with a large group of attorneys general. Mr. Chopra also took an interest in issues in the financial sector, including protecting tenants from the fallout from the end of the moratoriums on coronavirus evictions and controlling debt collectors.
Under the Trump administration, financial regulators used a lighter touch to control Wall Street, diminishing the power of agencies like the CFPB and overturning some of the provisions of the Dodd-Frank Wall Street reform enacted by Mr. Obama.
The new Biden administration is expected to take a stronger stance in the face of soaring asset prices in the financial sector, which has raised concerns about the emergence of unhealthy bubbles, even as the rest of the US economy still struggles to rebound fully after the pandemic.