As Donald Trump prepares to take office for his second term as U.S. president, his cabinet and key appointees are drawing attention for their significant ties to the financial services sector. The selections, while reflective of past administrations in their wealth and male dominance, deviate sharply in their lack of mainstream Wall Street representation and the apparent prioritization of loyalty and vested interests.
President-elect Trump has eschewed the tradition of appointing prominent bankers from institutions like Goldman Sachs, a hallmark even of his first term. Instead, his team includes figures such as venture capitalist J.D. Vance as Vice-President-elect, hedge fund manager Scott Bessent as Treasury Secretary nominee, and private equity investor Tom Barrack as U.S. ambassador to Turkey.
Many of these individuals have longstanding financial or personal ties to Trump, whether as campaign donors or business associates. This dynamic has revived concerns about the “spoils system” of political patronage, which legislative reforms over the past century sought to curtail. Critics argue Trump’s approach not only embraces this outdated system but amplifies it, creating substantial risks of financial and political conflicts of interest.
Conflicts and Risks at the Heart of Key Appointments
One of the more controversial figures is Elon Musk, who will co-head the newly established U.S. Department of Government Efficiency. Musk’s wide-ranging business interests, from Tesla and SpaceX to his nascent payments platform X Payments, raise numerous conflict-of-interest concerns. Observers have pointed to the potential regulatory boosts Musk’s ventures could receive, particularly as X Payments seeks to replicate the success of China’s WeChat as a comprehensive “everything app.”
Trump’s administration also appears poised to drastically shift U.S. attitudes toward cryptocurrency. The Securities and Exchange Commission (SEC), led under Gary Gensler, has been aggressive in pursuing fraud and regulatory violations within the crypto sector. However, Gensler is set to be replaced by Paul Atkins, a staunch deregulation advocate and co-chair of the crypto lobbying group Token Alliance. Atkins will be supported by other crypto proponents, including Howard Lutnick as Commerce Secretary and David Sacks as the White House’s artificial intelligence and crypto czar.
Deregulation Could Bolster Big Banks, Trigger Market Instability
While Wall Street bankers are conspicuously absent from Trump’s appointees, large banks stand to gain significantly from proposed deregulatory measures. Potential rollbacks of Basel III banking regulations and changes to federal deposit insurance systems could save major banks billions, likely at the expense of smaller institutions. Furthermore, full privatization of government-backed mortgage entities Fannie Mae and Freddie Mac could further strengthen big banks’ positions in the financial system.
The revolutionary nature of these proposed changes carries risks of financial instability. Critics warn that Trump’s reliance on non-traditional figures with vested interests may exacerbate systemic risks. Some suggest that, should a crisis emerge, Trump may find himself turning to more traditional Wall Street expertise for solutions.
As the Trump administration prepares to implement its vision, questions remain over whether the promised rewards of disruption will outweigh the potential hazards posed by conflicts of interest and deregulation.
