NEW YORK — Wall Street Democrats and some independents are growing increasingly nervous that the presence of Vermont Senator Bernie Sanders and former Maryland Gov. Martin O’Malley in the race and the continuing leftward tilt of the Democratic Party could push Hillary Clinton to take a tougher stance on financial reform issues in ways that could make their lives uncomfortable.

The fear is not that either candidate could beat Clinton — no one thinks that’s likely to happen.


Instead, some on Wall Street think powerful populist pitches from O’Malley and Sanders coupled with the heavy influence of noncandidate Elizabeth Warren could force Clinton to come out harder on issues including breaking up the nation’s largest banks, imposing a financial transaction tax, putting individual bankers in jail, cracking down on executive pay and otherwise beating up on an industry that six years after the financial crisis still suffers from rock bottom public opinion ratings.

The fear comes as Clinton is planning a series of policy speeches in the coming weeks — including one possibly dedicated to Wall Street reform — after a big announcement rally this Saturday in New York City, home of the financial industry.

“My fear is that she is just going to get pulled too far left by people who want her to just hammer the banks and stand in opposition to all these things she’s against,” said the CEO of one large Wall Street firm who declined to be identified by name to avoid angering the Clinton campaign.

The CEO, who backed Clinton in 2008, is now supporting Republican former Florida Gov. Jeb Bush for president. “What we need are forward-looking solutions, and I just think Jeb is better positioned to deliver those even though I’d still be comfortable with either one.”

Many big money managers say it is inevitable that Clinton will have to come out with a tougher program on Wall Street reform than anything she’s said so far or risk dispiriting the base she is counting on to hand her the nomination and then drive her into the White House next fall.

“Incomplete financial reforms and continued news of malfeasance will pressure presidential candidates, including Secretary Clinton, to be tough on banks and that will cause discomfort on Wall Street,” said Mohamed El-Erian, chief economic adviser at Allianz.

For Clinton, losing public support from Wall Street backers would cost her a ready source of campaign funds but also spare her the criticism that comes with it.

The former secretary of state is already trying to assure the left that she can be trusted on financial reform despite her family’s close relationships with Wall Street and the millions in speaking fees that she’s earned, much of it talking to large financial groups.

Clinton also from some guilt by association on the left as her husband, former President Bill Clinton, presided over an era of deregulation that saw the wall between investment and consumer banking torn down in ways that some blame for the financial crisis. The entire Clinton era is often associated with the rise of the so-called Wall Street wing of the Democratic Party, personified by two of Clinton’s Treasury secretaries, Robert Rubin and Larry Summers.

In his campaign launch, O’Malley used the fact that Goldman Sachs CEO Lloyd Blankfein has told colleagues he’d be fine with either a Jeb Bush or a Hillary Clinton presidency as a weapon to bash the Democratic front-runner. An O’Malley aide said the candidate will continue to slam Clinton over her Wall Street ties and make financial reform a centerpiece for months to come.

Clinton, rings the New York Stock opening bell, accompanied by NYSE CEO Duncan L. Niederauer, Monday Sept. 21, 2009. | AP Photo

But while Clinton might welcome some public scorn from Wall Street fat cats, a large exodus of deep-pocketed financial supporters to Bush or other GOP candidates could complicate Clinton’s efforts to amass the $2 billion to $2.5 billion cash hoard that her associates have targeted as the amount she will need to win the White House. Clinton campaign officials call that number highly unrealistic. The $2 billion or more figure cited by others would include the campaign itself, the super PAC, the Democratic National Committee and other related groups.

But with Bush, Florida Sen. Marco Rubio and Wisconsin Gov. Scott Walker — along with other Republicans — making big pushes for Wall Street cash, the industry has multiple options for its money.

Priorities USA Action, the main super PAC supporting Clinton, has already shaken up its leadership once and had significant trouble getting donors to write the six-figure checks that Bush has been piling up for his Right to Rise super PAC. Bush is expected to announce next month that’s he’s already raised $50 million or even much more for his PAC. Priorities USA Action is expected to announce a much smaller number.

Clinton aides and outside advisers alike acknowledge that the candidate is “in a box,” as one donor put it, when it comes to financial reform. If she goes at it too hard she could scare away donors. If she goes too soft she risks alienating the left in potentially damaging ways for a campaign that is relying on the left-leaning Obama coalition to win.

No decisions have been made on exactly what to include in a major speech on financial reform, though things like a financial transactions tax — pushed in the past by President Barack Obama but reviled by Wall Street — remain possibilities, aides and outside advisers said.

It’s also not clear how hard she will hit bankers themselves, though she is expected to continue to stress the theme of how the deck is currently stacked in favor of those at the top, an oblique reference to Wall Street.

And aides say Clinton already has a strong record on some financial reform issues the left cares about, including staunch support for the Dodd-Frank financial reform law and endorsement of getting rid of the “carried interest loophole” that allows private equity and some hedge fund managers to pay the capital gains rate on a large portion of their regular compensation. Aides also note her early support for cracking down on financial derivatives and addressing abuses in the subprime mortgage market.

“Hillary Clinton’s fought financial fraud and consumer abuses throughout her career. In the Senate, she’s stood up to big banks, worked to rein in executive pay, pushed to close the carried interest loophole and fought to stop financial schemes that put families at risk,” said campaign spokesman Jesse Ferguson. “While her commitment to taking on this fight is clear from her record, she has been working on her policy plans and will have much more to say about this, and other issues in this campaign, after her launch speech this weekend.”

But conversations about what to include in a Wall Street reform platform always have an undercurrent: the impact on big donors. “Is it always in the backs of people’s minds? Sure,” said one person close to the campaign. “But in the end she is going to do what she thinks is right and what is authentic to her.”

Another donor said it is “no accident” Clinton has veered mostly away from Wall Street issues so far. “She’s only going to do it if she really has to and at some point she will have to.” The donor also noted that at some point she will have to weigh in on Obama’s push for a big trade deal with Asia, an agreement opposed by the left and beloved on Wall Street.

Clinton has made a couple of moves in the direction of the populist, Wall Street-bashing wing of the Democratic Party that has been ascendant in recent years under the leadership of Warren.

In Iowa, Clinton bashed the low tax rates paid by hedge fund managers and the high salaries of America’s CEOs when compared with those of average workers. This past weekend, she lent her prestige to the movement pushing for a $15 minimum wage, a move many on Wall Street think would harm economic growth.

Clinton’s Wall Street backers have mostly taken these early comments in stride. “We get it,” has been the mantra. But with Sanders gaining some traction in Iowa and O’Malley basing his campaign on knocking Clinton for her Wall Street ties, the industry is now braced for more flak from the former secretary of state. And “We get it” could easily turn into “What the heck is this?”

“There is no question she is going to have to at least sound a little more leftist,” said one Clinton supporter at a large Wall Street bank who did not want to go on record speaking about the campaign. “Does she really need to give a speech calling for the break-up of Citigroup or other banks? Probably not. But we really don’t know.”

Progressive groups and ardent financial reformers, meanwhile, are counting on increased pressure to smoke out Clinton on the issues they care most about. And they are withholding praise until she does so.

“So far, what we’ve heard from Secretary Clinton on these issues has all been very general,” said Simon Johnson, a professor at MIT and former chief economist at the International Monetary Fund who is a leading intellectual driver of the financial reform movement calling for radical changes to banks. “But the more Sanders and O’Malley raise these issues the more pressure will rise on her to offer very specific and detailed plans. We don’t know where Secretary Clinton will wind up on this, and it is one of the bigger choices her team will have to make.”

O’Malley launched his campaign recently by ripping into the lack of criminal charges against bankers during the Obama administration and taking on Clinton’s ties to banks, Goldman Sachs in particular, suggesting her presidency would be no different than that of Jeb Bush.

“Tell me how it is that not a single Wall Street CEO was convicted of a crime related to the 2008 economic meltdown. Not. A. Single. One,” O’Malley thundered. “Goldman Sachs is one of the biggest repeat-offending investment banks in America. Recently, the CEO of Goldman Sachs let his employees know that he’d be just fine with either Bush or Clinton. I bet he would.”

Sanders has sounded similar themes, saying in his campaign announcement that “it is time to break up the largest financial institutions in the country. Wall Street cannot continue to be an island unto itself, gambling trillions in risky financial instruments while expecting the public to bail it out. If a bank is too big to fail, it is too big to exist.”

Few expect Clinton to match these rhetorical flourishes. “Don’t expect pitchforks,” one Democratic donor said. But many of the left want her to be clear about how she would toughen Dodd-Frank — not just defend it — and reduce the influence of the nation’s largest banks while addressing growing income inequality.

Warren has made it clear that her support for Clinton’s candidacy — considered key to big turnout among progressives — will depend on the Democratic front-runner taking strong stands on the issues the Massachusetts senator cares about. And vague platitudes about fairness and defending Dodd-Frank are not likely to be good enough.

“The question is are you interested in making Wall Street happy or are you interested in protecting the American people from Wall Street?” said Dennis Kelleher, CEO of financial reform group Better Markets. “The American people are not going to accept bland PR answers. Clinton is going to have to respond to the demand from voters to make sure the threat from Wall Street is regulated. That means details, not 140 character tweets that have no real content.”