Analyst: Democratic Party victory may tighten financial regulation and increase scrutiny of bank transactions

Gil Fortgang, assistant analyst at T. Rowe Price in Washington, said that if the Democratic Party wins in the upcoming U.S. presidential election, it could mean that federal regulatory agencies will tighten policies and continue to scrutinize major bank transactions. Fortgang said that with the significant increase in lending outside traditional banks, the Democratic Party may encourage stricter regulation of non-bank lending institutions, while a Republican victory may lead to a more lenient approach. Fortgang said that financial regulatory agencies under a Democratic president are more likely to take a more proactive stance compared to a Republican government. This will affect bank mergers, capital requirements, and regulations governing consumer finance and non-bank financial systems.