Wall Street Doesn't Expect 'Miracles' in Tampa

America's biggest financial companies have an aggressive agenda of reforms they hope to see adopted by Mitt Romney—should he win the election.

But many on Wall Street aren’t expecting to hear much about this agenda from Republicans at the convention in Tampa. (Read more: 5 GOP Convention Speeches to Remember)

“There’s a lot of sympathy in the industry with the campaign’s efforts to avoid having Romney tagged as a big-business, big-bank guy,” one person at a Wall Street firm explained. (Like most interviewed for this piece, the person asked not to be named.)

In conversations with 11 senior people at several different financial firms, including large banks and hedge funds, a picture emerged of a financial sector that believes Romney supports many of the political issues important to Wall Street, while it also understands that the campaign is unlikely to focus on these issues. (Read more: How Romney's Economics Turned Right...Sometimes)

“There’s an acute awareness that Romney, if left to his own devices, would come out to a place that is pretty friendly toward banks—even particularly large banks,” one of those executives said. “He’s extremely comfortable around business types. “

“No one is expecting any miracles out of Tampa. The bar is set low,” one of the people interviewed said.

Most of those we spoke with believe that Romney’s agenda of holding the line on taxes and turning back regulatory expansion is important to ramping up economic growth.

“The economy needs more room to breathe. That means less regulations and lower taxes,” one of the executives said.

One of the Wall Streeters cited the acquisition of Hudson City Bancorp as an example of “what’s wrong with Obama’s economy.” He said that Hudson City was forced to sell itself to M&T Bank because the low-interest-rate environment had crushed its margins, while competition for jumbo loans from government-owned Fannie Mae and Freddie Mac had undermined its business model.

“If Main Street was prospering, Hudson City would have been fine. There’s not a big difference right now between Main Street prosperity and Wall Street prosperity. But there is a difference with K Street* prosperity. Romney will help Wall Street and Main Street; the other guy does the other thing,” a staffer at a New York-based bank said. (Read more: Paul Ryan's Small Business Ties)

*(K Street, for the uninitiated, is code for D.C.’s lobbyists, much like Wall Street is a metaphor for the financial sector.)

Much of Wall Street’s more specific political agenda turns around issues arising from reforms that began to be put in place following the financial crisis. There is little hope that Dodd-Frank will be actually repealed. But there is some confidence that a Romney administration would be friendly to changes around the margins of the law.

One of those desired changes would involve paring back the international scope of Dodd-Frank’s swaps regulations. The 2010 law aims to have most swaps guaranteed through regulator-approved clearinghouses and traded on exchanges. Banks argue that applying these rules to overseas operations could hurt their competitiveness.

The competitive effects of Basel III capital adequacy rules are also a big issue for Wall Street. Many of the big banks in the U.S. worry that the implementation of the rules could give an advantage to Asian and European banks, by counting as regulatory capital financial arrangements that aren’t used in the U.S.

“Obama barely pays lip service to international competitiveness,” one investment banker said.

What might be detectable from Tampa is a “change in tone,” one banking executive said.

“We expect less outright bashing of banks and bankers. A more constructive dialogue,” he explained.

- by CNBC.com senior editor John Carney

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