Where Is Romney's Promised Plan to Regulate Wall Street ?

In the new issue of National Journal I ask whether Romney's failure to deliver a plan for regulating the financial system has anything to do with the fact that the top eight donors to his campaign are big banks. 

I mean, has any major-party candidate running for president ever been as qualified as  Romney, the Wall Street whiz who founded Bain Capital, to understand and reform the troubled U.S. financial system? At a time when the economy is still recovering from what many economists say was the worst financial crash in U.S. history, there would seem to be no better moment for the Republican presidential candidate to say what he will do than right now, before the election.

Yet despite months of promises that he would deliver an alternative to the Dodd-Frank law, which Romney has relentlessly criticized, no plan seems forthcoming. In an interview last June, Oren Cass, Romney’s chief domestic policy advisor, said the candidate and his team were still working on specific regulatory plans for finance, but that journalists should “stay tuned.” 

Three months later, neither Cass nor Romney spokeswoman Andrea Saul responded to multiple requests from National Journal this week to indicate whether a plan is in the works, with just six weeks left in the campaign.

Why the holdup? According to a financial regulatory expert who has advised the Romney campaign, it’s not for lack of attention; on the contrary, he says, there have been months of discussions without resolution.  “It’s a no-win political situation,” said the expert, who cautioned that he is not one of the candidate’s senior advisors and would address the internal debate only on condition of anonymity.  “If you talk about imposing a 15 percent capital leverage ratio on the banks, which has been discussed, they’ll get upset. If you support what the banks want, a lot of other people [voters] will get upset.”

One complicating factor may be that the top donors to Romney’s campaign are the very Wall Street banks about which so much debate has swirled, and which remain the very embodiment of what critics call the “too big to fail” problem. The banks are engaged in an active effort to unwind Dodd-Frank, but they remain so deeply unpopular with the public that to endorse their efforts to weaken the law might seem like weakness or co-option.

According to the Center for Responsive Politics, which tracks political contributions, the eight biggest donors to Romney’s campaign consist of individuals and PACs associated with Wall Street’s most powerful banks. As of mid-September Romney’s top eight contributing organizations (in other words, those that “bundle” individual contributions)  in order of the size of donations were: Goldman Sachs, $688,080; Bank of America, $541,548;  JPMorganChase, $541,019; Morgan Stanley, $535,047; CreditSuisse Group, 433,785; Citigroup, $369,015; Barclays, $349,400; and Wells Fargo, $343,000. By contrast, the top eight organizations bundling donations to Obama’s campaign were, in order, the University of California,  Microsoft Corp., Google Inc., Harvard University, the U.S. government, Deloitte LLP, DLA Piper and Stanford University.