2008 U.S. Elections and Impact on the Financial Services Industry

This Financial Insights NewsFlash discusses the impact of the 2008 U.S. elections on the financial services industry. Following Barack Obama's election to the U.S. presidency and the retention of control of Congress by the Democrats (with substantially greater majorities), Financial Insights expects more legislation to protect consumers, incentives to reduce offshoring, federal regulation of the insurance industry, more bank failures, and streamlining of banking regulatory agencies. Some of these events, such as the bank failures, would have occurred regardless of the outcome of the election; the differences will largely be of emphasis and severity. One of the big unknowns, and what is most important to the industry, is selection of the incoming Treasury Secretary. The Treasury Secretary will play the lead role in reshaping the industry and laying the stage for the long-term future of the industry.