NEW YORK — Elizabeth Warren has another plan — this time to take on Wall Street and reshape the role of finance in the American economy.

And Wall Street isn’t panicking as she climbs in the polls.


The Massachusetts senator, who became known as a leading scourge of big bankers and moneyed elite in the aftermath of the financial crisis, is finding a relatively calm reception among wealthy left-leaning bankers and hedge fund managers.

Most of them don’t love Warren’s economic and regulatory policies. But they generally understand them and appreciate that the Democratic presidential candidate declared herself a “capitalist to my bones” and believer in free markets, albeit with strong cops on the beat.

Warren released a new plan Thursday to take on private equity firms’ special treatment, roll back Trump-era financial deregulation and reinstall a Depression-era ban on investment banks also serving retail clients. Most of her proposals have drawn heated discussion for years, so her latest plan is not likely to shock the finance world.

Many bankers view Warren — a former Republican who’s made her policies clear for years — as the safer presidential choice if the progressive wing wins out in the Democrats’ internal war. If it comes down to Warren or Sen. Bernie Sanders (I-Vt.), an avowed democratic socialist who continues to make personal feuds with bankers a centerpiece of his campaign, many of them would swallow hard and take Warren.

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“She’s preferable for many reasons,” said Robert Wolf, a venture investor and former adviser to President Barack Obama who has given to several candidates. “She’s been very clear that she believes in fair capitalism. And the idea of promoting socialism I don’t think is a winning strategy if the goal is to beat President Trump.”


Warren had not made Wall Street-bashing as central to her campaign as Sanders has done. The Vermont senator ripped the industry multiple times in the first Democratic primary debate. Warren never mentioned it.

That changed somewhat with Warren’s new proposal Thursday, in which she argued that the financial sector has grown too large as a share of the economy. But her proposal includes much of what Warren has already rallied around over the past decade — including rebuilding the Glass-Steagall division between investment and commercial banking and reinstating Obama-era rules on banks.

The proposal — and accompanying legislation she’s introducing in the Senate — takes sharpest aim at one corner of Wall Street: the private equity industry. Warren proposes forcing private equity firms to take responsibility for debt they pile onto companies they buy and limiting their ability to pay themselves large fees and dividends from portfolio companies, among other changes.


“We should start by transforming the private equity industry — the poster child for financial firms that suck value out of the economy,” Warren wrote in a post on Medium.

That’s likely to ring alarm bells at big private equity firms like the Blackstone Group and the Carlyle Group. But the fact that private equity would be her first target may even offer some relief to other parts of the industry that they would not be atop Warren’s to-do list.

Warren is hardly seeking out Wall Street support. She raised $53,760 from people in the securities and investment industry in the first quarter of 2019, according to the Center for Responsive Politics. Second-quarter numbers for the industry are being tabulated this week. Both she and Sanders have so far shunned big-ticket fundraisers and relied, successfully so far, on online donations.

And there is no big industry rush to embrace Warren. Most Wall Street Democrats would strongly prefer another candidate. Industry support is now largely divided among former Vice President Joe Biden, Sen. Kamala Harris (D-Calif.) and South Bend (Ind.) Mayor Pete Buttigieg, all of whom have high-dollar bundlers on Wall Street.

But even some executives who support other candidates said in interviews that while they do not want to see Warren win, they are much more frightened of Sanders — who represents a less understood and more existential threat than Warren does.

“I think she is going to get the nomination because she’s the smartest, she’s charismatic and she’s the most policy-oriented,” said one former top executive at a large Wall Street bank who, like several interviewed for this story, declined to be quoted on record saying anything nice about Warren. “Wall Street is very good at accommodating itself to reality and if the reality is the party is going to be super-progressive, they may not like Warren but she’s a better form of poison than Bernie.”

Several executives who have negative feelings about Warren also said that while it might be hard to ever support Sanders in a general election, for fear that he would try and blow up the entire capitalist system, they could probably come around to backing the Massachusetts senator against Trump.

“If she were the nominee, there will certainly be people who will say that Donald Trump represents everything that I’m against,” said Orin Kramer, a hedge fund manager who is raising money for Buttigieg. “And they will find stuff that they like about her and will vote for her.”


The slight warm-up to Warren marks a significant shift from 2016, when bankers made a concerted push to discourage then-nominee Hillary Clinton from selecting Warren as her running mate. Warren has not really changed since then, outside of reaffirming her commitment to capitalism.

But the industry has changed to some extent since then as banks become somewhat more diverse, younger and more hospitable to the progressive wing of the party.

“I don’t think the stereotypes of the industry serve the same purpose as they used to,” said Wolf. “People who work in corporate America and financial services may have the same views that she does on 95 percent of the issues such as income inequality, student loans, climate change and others.”

The idea that bankers might not hate her as much anymore is not one that the Warren campaign embraces. Any expressions of support from the industry could be an incitement to Sanders supporters to suggest their candidate is the true progressive who would boldly bust up the nation’s largest banks.

“If you suggest even in the most minuscule way that Wall Street may be willing to entertain the possibility of Warren’s success, she will need to go out and prove that she’s more Bernie than Bernie,” the former senior executive at a large Wall Street bank said.

People close to Warren note that she has the most extensive record of actually making changes in the financial industry, including helping set up the Consumer Financial Protection Bureau, pressuring Wells Fargo to dump former CEO Tim Sloan and pressing for regulatory changes at the Federal Reserve and elsewhere. And they say she has the deepest Rolodex to staff a potential administration with like-minded officials in senior roles.

If any finance types support her, they say, they should do so knowing she would not change any of her views should she win the presidency. And that itself is still enough to lead some Democratic financiers to say they might sit out a Warren-Trump 2020 campaign.

“I think if she gets the nomination, some people just won't vote,” a financier who supports Harris said. “They will look at Trump and say, ‘I don’t like him but he won’t hurt me financially.’ And they’ll look at Warren and say, ‘She will hurt me financially.’”


But that appears to be an increasingly minority view, even among those whose eyes roll at the mention of Warren’s name. It’s not a groundswell. But it’s a shift.

“There may be a tad less hostility toward Warren, perhaps because she keeps calling herself a capitalist,” said one investment banker. “And some are more respectful of her effectiveness on the campaign trail.”