Paul Ryan's views on Wall Street may surprise you
BUSINESS OPINION:HE COULD be mistaken for a Wall Street banker. Or perhaps a hedge fund manager. Paul Ryan, with his clean-cut looks seemingly from Brooks Brothers and his wonky obsession with spreadsheets, could be the archetype of a Wall Streeter.
Mitt Romney’s running mate even trades stocks in his spare time. He’s a fan of the nation’s blue-chips: among the stocks he owns are Apple, Exxon Mobil, General Electric, IBM, Procter Gamble, Wells Fargo, Google, McDonald’s, Nike and Berkshire Hathaway.
Ryan is a disciple of Ayn Rand and Milton Friedman, two figures long associated with free markets.
And he’s got the support of some powerful backers in finance: His top donors include employees of Wells Fargo, UBS, Goldman Sachs and Bank of America. For his 2012 congressional race he raised about $179,000 from securities professionals (not a large sum but certainly the single largest sector that donated money to his campaign).
One of his biggest contributors is Paul Singer’s hedge fund Elliott Management. And Dan Senor, recently an investment adviser to Elliott Management, has just been named as Romney’s new adviser.
But what does Ryan think about Wall Street? His views may surprise you.
Ryan, who voted in 1999 to repeal parts of the Glass-Stegall Act thereby allowing commercial and investment banks to merge, now appears to be in the same change-of-heart camp as Sandy Weill, the former chief executive of Citigroup, who recently declared that the banks should be broken up.
“We should make sure you can’t get too big where you’re going to become too big to fail and trigger a bailout,” Ryan said during a meeting with constituents in May in Wisconsin. “If you’re a bank and you want to operate like some non-bank entity like a hedge fund then don’t be a bank. Don’t let banks use their customers’ money to do anything other than traditional banking.”
With a view like that Ryan faces a challenge winning the support of the likes of Jamie Dimon, the chairman of JPMorgan Chase and a vocal supporter of the big bank model.
Ryan is also an ardent critic of the Dodd-Frank Act, the post-crisis Wall Street legislation. Yet, oddly enough, the provision he dislikes the most is the one that has the greatest support of the industry: a tool known as “resolution authority”, which gives the government the authority to dismantle a failing bank without wreaking havoc on the rest of the system.
It was a provision that was supported by former Republican treasury secretary Henry M Paulson jr. “We would have loved to have something like this for Lehman Brothers.”