Like Him or Not, Trump is the Best President For Wall Street. Here’s Why.

With a primary cycle that’s irking even the most tenacious of informed spectators and the presidential election looming, there is good reason to analyze the potential impact of the leading four candidates on Wall Street. Donald Trump, often criticized for his failed deals (and, yes, there have been some), would best represent the interests of the banking industry. Ted Cruz, with his firm adherence to free-market principles, comes a close second (with or without Carly Fiorina), while Hillary Clinton, despite her success in raising funds from Wall Street, trails in third. Unsurprisingly, Bernie Sanders, with his communism-light policies, comes in distant fourth.

To arrive at this conclusion, we assessed the candidates’ platforms, public statements, campaign funding, and voting records, and evaluated them on the following factors:

· The Federal Reserve. It has played a key role in helping large financial institutions with injections of liquidity, ultra-low interest rates, and purchases of toxic assets. Floated policy proposals range from audits to curtailed independence, to even outright abolition.

· Bank regulation. The Dodd-Frank Act tightened regulatory oversight, introduced clearing requirements for derivatives, and limited proprietary trading — all with a negative impact on profitability.

· Bank bailouts of 2008. TARP, in particular, allowed large banks to benefit enormously. With another financial crisis expected, we considered how the new president might respond.

· Breaking up large banks. Calls for the elimination of too-big-to-fail institutions have become louder, with obvious negative implications for Wall Street.

· Taxation. General corporate taxes, as well as taxes targeting banks and securities trading, and the issue of “loopholes” for investors are of paramount importance.

Hillary Clinton

While Mrs. Clinton attracted the most donations from Wall Street, this appears to have more to do with her front-runner status than her policies, which are generally anti-bank. Although she supports maintaining the Fed’s independence, the remainder of her plans betray a deep-seated hostility towards banks. Notably, she has proposed a new tax on institutions deemed too risky, a limit on the instruments that banks can invest in, and the regulatory authority to dismantle large firms. She is also for a tax on high-frequency trading, and opposes any weakening of the regulations currently suffocating Wall Street.

While not as hard on banks as her Democratic rival, Senator Sanders, there is little in her stated positions to warm the hearts of the banking industry. Perhaps her positions are little more than campaign bluster, as she did vote for the bank bailout in 2008. This suggests she may soften her positions once in office.

Ted Cruz

Senator Cruz is doctrinarily free-market. This has positive and negative aspects for banks. His ideological opposition to regulation, including Dodd-Frank, would liberate the banking sector, and his proposed reduction in corporate taxes would be a boon.

However, his calls for curtailing the independence of the Fed, beginning with an audit, stand out. This would likely be the thin end of a wedge limiting the Fed’s ability to intervene on behalf of large banks in the future. Also, he has categorically opposed the bailing out of any financial institutions in the future, preferring to watch them fail.

Bernie Sanders

A specter is haunting Wall Street. The toughest treatment of the Street comes from Senator Sanders. He has pleaded for an audit of and limits to the Fed’s ability to lend to large banks. The Senator from Vermont has never met a banking regulation he did not like, and not only seeks to tighten existing rules, but to even dust off Glass-Steagall. Not content to regulate the industry to the ground, he wants to introduce a plethora of new “speculation” taxes and break up large banks. His plan to introduce a tax on stock trades would grind US equities markets to a halt. Not only does Senator Sanders appear to be unaware of European history since 1923, the international mobility of capital eludes him entirely. His policies risk reducing New York to the level of Detroit, and would be a boon to foreign financial centers, such as London. Senator Sanders wants banks to “Feel the Bern” in more ways than one.

Donald Trump

While Mr. Trump’s positions and statements have a tendency to be as startling as his general flamboyance, his policies on banking reveal him to actually be the best candidate from a Wall Street perspective. He principally opposes overbearing regulation and seeks to repeal Dodd-Frank. Unlike Senator Cruz, Mr. Trump has spoken favorably of bailout programs such as TARP. He also supports allowing big banks to continue to operate at their current scale. As far as taxes are concerned, little separates Mr. Trump and Senator Cruz, although Mr. Trump’s proposed corporate tax rate is slightly lower. These are all positive factors. Less favorably, he supports an audit of the Fed, and believes that current monetary policy has created asset bubbles, suggesting he would seek tighter control over the Fed’s activities.

How They Stack Up

Each of the leading four candidates are ranked in the categories important for financial institutions. Unsurprisingly, the two Republican candidates have policies most favorable to this sector, but Mr. Trump’s positions on bailouts and the Fed allow him to inch ahead of Senator Cruz. Mrs. Clinton’s positions would be awful if actually implemented, and Senator Sanders’ ideas would be an unmitigated disaster for Wall Street. While Mr. Trump tops our rankings, we have only his campaign trail pronouncements to rely on, which are notoriously unreliable for all politicians. With the others we at least have some real voting records to look at. How closely President Trump’s actual policy proposals would reflect his campaign promises is far from certain.

About the authors: Octavio Marenzi is CEO of Opimas LLC and Anna Griem is research analyst at the Boston-based management consultancy.