Morgan Stanley Vice Chairman Tom Nides was doing Zoom calls from his Washington home Tuesday when his TV screen flashed with the news that Joe Biden had picked Kamala Harris as his running mate. The former deputy secretary of state, a major Wall Street donor to Democrats, was still rejoicing the next morning.
“How damn cool is it that a Black woman is considered the safe and conventional candidate,” he said in an interview. Across Wall Street, “the announcement of Harris was exceptionally well-received.”
That came across in interviews with prominent Democrats working in finance, including Peter Solomon, Michael Novogratz, Ralph Schlosstein and Jim Chanos, reflecting the historic nature of the pick as well as her moderate views on taxes and banking.
Harris, 55, a U.S. senator from California and the first Black and Indian-American woman to be a vice-presidental nominee, wasn’t always popular on Wall Street, particularly at the height of the financial crisis, when she was the state’s attorney general. In 2011, she went hard after five of the nation’s biggest mortgage servicers, initially putting the skids on a proposed national settlement over their foreclosure practices.
Harris viewed the deal as “inadequate” and instead wanted to pursue her own investigation. A former district attorney in San Francisco, Harris made it clear she viewed the damage caused by the mortgage crisis from the perspective of a prosecutor. She worked with Biden’s son Beau, at the time Delaware’s attorney general, to go after banks.
Harris played tough initially, and did squeeze more money out of the lenders. Months after Harris rejected a $4 billion settlement, the banks agreed to pay more than $18 billion in relief to California homeowners.
Solomon, founder of Peter J. Solomon Co., said the banks were “relieved.”
“I thought the banks could have paid more, frankly,” said Solomon, who served in the Treasury Department under President Jimmy Carter and was introduced to Harris by the late private equity titan Warren Hellman.
“She’s a normal Democrat. I think it’s a great pick,” Solomon said. “It’s safe, balanced, a woman, diverse, what’s not to like?”
Wall Street is relieved because Biden and Harris are more moderate than the Bernie Sanders and Elizabeth Warren wing of the party, said Mehrsa Baradaran, who researches banking and race at the University of California, Irvine School of Law.
“Even when Senator Harris went after JPMorgan -- she puts that up as one of her big things in California -- she did it through legal enforcement, as opposed to regulatory restructuring, breaking up the banks, capital requirements,” Baradaran said.
Schlosstein, co-chief executive officer of Evercore Inc., said he’s unsure what sort of stance Harris would take toward Wall Street, but found her to be “very grounded” when he spent time with her during her brief campaign.
“She’s certainly not hostile to capitalism,” he said. “She’s solidly in the left-center of the party, which is what I think this country needs right now.”
Chanos said he met Harris at a fundraiser in Washington after 2018 mid-term election. The famed short-seller reiterated the view that she’s considered more moderate than other choices Biden could have made, but she’s also more liberal on many issues than the former vice president.
“She’s terrific,” said Chanos, founder of Kynikos Associates. “She’s got force of personality in a good way. She takes over a room. She certainly has a charisma and a presence which will be an asset on the campaign.”
Wall Street’s relief may be a bit premature, according to Baradaran, since it’s still unclear what the Treasury, Housing and Education departments in a Biden administration will look like.
“There’s going to be a world of difference between Lawrence Summers versus Katie Porter or a Warren at the helm of the economic agenda,” she said.
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