US election reopens financial reform debate

Significance

The resilience of the Sanders campaign ahead of the February 1 Iowa caucuses despite its low pre-2015 profile with the national electorate, and the vigilance of banking watchdog Elizabeth Warren in the Senate, continue to shift the political debate on financial regulation leftwards, particularly among Democrats.

Impacts

• Overlap between Republicans and Democrats on Fed transparency may lead to greater scrutiny of the central bank's operations post-2016.
• Pressure to police and prosecute financial crimes more aggressively will continue to build and will not require legislation to achieve.
• The likely persistence of divided government will prevent either party from updating bank regulatory legislation.