Wall Street hates nothing more than uncertainty and that's exactly what it's facing as President Barack Obama considers possible replacements for outgoing Attorney General Eric Holder.
Holder was hardly the scourge of Wall Street. In fact, he came under heavy criticism from the White House political staff in 2012 for failing to sate populist hunger for prosecutions of big bank CEOs and banks themselves in the wake of the financial crisis. But he was an ardent advocate of civil suits against banks in ways that analysts often cite as among the bigger impediments to mortgage credit expansion.
So the next attorney general's approach to this type of litigation, as well as their general stance toward criminal prosecution in the financial sector, matters a great deal to the banking industry and bank investors as well as the broader economy.
The conventional wisdom is that Obama, whose leanings tend toward anti-bank populism, will select someone whose approach will not differ very much from Holder's.
"Our view is that the odds favor the president picking someone who will pick up where Holder left off in pursuing the big banks as the president has never given an indication that he thought the Justice Department had gone too far," Guggenheim Securities analyst Jaret Seiberg wrote in a client note.
One Republican attorney suggested to this columnist that former prosecutor Mary Jo White, who now heads the Securities and Exchange Commission, would be a possibility because she would likely not face heavy GOP opposition.