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Your guide to what the 2024 US election means for Washington and the world

The primary nominees of Donald Trump’s top team are in some ways like many presidents before him – more male, more wealthy and more drawn from the financial services industry.

And yet Trump’s nominees differ in one important respect. They are not mainstream. In particular, the list does not contain famous bankers, breaking the tradition (even supported by Trump Mk I) that financier appointments are usually obtained from the likes of Goldman Sachs.

This is true across the board – from vice-president-elect JD Vance, a venture capitalist, and Treasury secretary nominee Scott Bessent, a hedge fund manager, to incoming UK ambassador Warren Stephens, a self-made investment bankerand new Turkish ambassador Tom Barrack, a private equity and property investor.

Most of Trump’s financier appointees have been significant campaign donors and/or business associates during his career as a property mogul.

The “spoils system” of US political patronage – an 18th-century tradition that allowed presidents to strengthen loyalty by appointing friends and family to government roles – should be abolished through a series of legislative reforms initiated in the late 19th. century. The future president not only embraced the system popularized by Andrew Jackson, the seventh president of the US, but did so in a way that created major financial and political conflicts of interest. How effective legal restrictions are in checking these conflicts is unclear.

The enthusiastic reading of Trump’s appointments so far is that these are the people who will cut through bureaucracy and bring energy to a growth-oriented reform agenda. Elon Musk, the joint head of the so-called Department of Government Efficiency, is its incarnation-in-chief.

The breadth of Musk’s own business interests makes it difficult to remove all conflicts as they relate to Tesla, SpaceX or X. Another place to look comes from Musk’s close relationship with finance – he started as co-founder of PayPal. X Payments, his new payment platform, has ambitions to be the WeChat of the west and ape the huge success of the Chinese “everything app”. Strong government and regulatory support will give the platform a big boost.

What is more profound is how the official behavior of the US in crypto finance (another of the Musk pet topics) seems to be set in reverse. Under the leadership of Gary Gensler, the Securities and Exchange Commission took an apparently hostile stance: many cases Brought against crypto companies for fraud, called “wash trading” that inflates transaction volume, registration violations, and other misconduct.

But Gensler set to be replaced by Paul Atkins, a keen deregulator, who co-chairs the Token Alliance, a crypto lobbying group. Atkins will be supported by several other senior nominees of the Trump administration: notably Howard Lutnick, who is a vocal crypto advocate, with strong Tether links as commerce secretary; and David Sacks, who is a close ally of Musk and fellow Paypal alumnus, as the so-called White House AI and crypto czar.

In the investment arena, Trump chose Stephen Feinberg, co-founder and co-chief executive of Cerberus Capital Management, as his deputy secretary of defense – opening up another potential conflict, given Cerberus’ history of investing in defense businesses . As well as the social security administration, the choice of Frank Bisignano, a payment technology boss, to manage presents a source of reform and a conflict management.

No matter how positively you view the potential rewards of disruption, the risk of putting vested interests in charge of such areas is significant.

A twist is that despite the loss of big bankers among Trump’s nominees, big banks be extraordinary winners. Lowering the so-called Basel III banking regulations could save them billions of dollars in capital charges. Overhaul the federal deposit insurance system tends to benefit them, to the detriment of smaller institutions, as savers move their money to larger, safer banks. And any movement of ending state support for loansby fully privatizing Fannie Mae and Freddie Mac, would also be a relative win for the larger banks.

In the long run, such revolutionary changes may cause chaos or crisis. That may be the moment Trump feels the need for more top Wall Street advice.

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