Elizabeth Warren's Win Changes Little: Street Whispers
NEW YORK (TheStreet) -- Consensus is that after Elizabeth Warren was elected as the next Senator for Massachusetts, the former Harvard Law School professor and figurehead of the Consumer Financial Protection Bureau will use her bully pulpit to dismantle Wall Street mega banks like Citigroup(C) and Bank of America(BAC) .
Were Warren to emerge in the Democratically controlled Senate as the chair of its Banking Subcommittee, many are already envisioning a crackdown that may pressure the likes of Citigroup, Bank of America and even JPMorgan Chase(JPM) to split investment banking businesses from consumer lending operations.
Warren, after all, made it a point of her Senate pitch to Massachusetts voters that she'd consider reinstating the Glass Steagall Act, a post-Depression banking sector reform that split off investment banking from ordinary Main Street lending.
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Meanwhile, former administration officials who played key roles in President Obama's first-term banking sector fixes and reforms say that a strong Election Day showing by Senate Democrats augur poorly for banks, while strengthening the mandate for reforms like the 2010 Dodd Frank Act
"Wins by Warren, Sherrod Brown & Grayson means bad day for the banks and a very good day for supporters of real regulatory reform," wrote Neil Barofsky, the former inspector general for the Treasury's Troubled Asset Relief Program, on Twitter.
But industry insiders may be overreacting to Warren's election, in favor of Republican Scott Brown, who was portrayed in a lengthy Businessweek profile as "Wall Street's hope to stop Elizabeth Warren."