As its relationship with Democrats hits a historic low, Wall Street sees a solution on the horizon: Hillary Rodham Clinton.
Mrs. Clinton was the industry's home state senator, and the financial sector was the second-largest giver to her presidential campaign in 2008. In her post-State Department life, she has been showered with lucrative speaking fees from Goldman Sachs, J. P. Morgan and other financial firms. In her talks, she says it is unproductive to vilify the industry, and she avoids the kind of language that puts off financial executives, as when President Obama referred to "fat cat" bankers in 2009.
But as Wall Street hopes for a warm embrace from the former secretary of state, Mrs. Clinton must grapple with a populist surge coursing through politics, on both the right and the left.
Attacks on Wall Street bailouts are a staple of Tea Party campaigns. Republicans, many of whom deliberately stood on the sidelines during the legislative battle over the Dodd-Frank legislation and have quietly reaped the benefits of Wall Street's disenchantment with Mr. Obama, are now reeling from the primary election defeat of Representative Eric Cantor of Virginia, the former majority leader. Mr. Cantor's opponent, David Brat, won in part by attacking Mr. Cantor's ties to the financial world.
In Mrs. Clinton's years away from politics, income inequality has become a defining political issue in the Democratic Party, elevating a new generation of stars like Senator Elizabeth Warren of Massachusetts, who has pushed for the breakup of large financial institutions.
Late last month, Ms. Warren campaigned in Kentucky for Alison Lundergan Grimes, the Democratic candidate for Senate, a sign that some in the party believe the Massachusetts senator's message resonates well beyond the left. (Mrs. Clinton has not yet campaigned on behalf of Ms. Grimes, though an adviser said she will likely do so this fall.)
"I think there's a potential window for Democrats to come back, but if it is one wing of the party pushing the populist line — anti-big banks, punishing people whether or not they had anything to do with the crisis — they'll lock this crowd into a Republican alternative," said Bill Daley, a former chief of staff to Mr. Obama and commerce secretary under President Bill Clinton who is now a hedge fund executive.
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During her 2008 primary campaign against Mr. Obama, Mrs. Clinton emphasized her husband's economic record. But running on the 1990s will not work in 2016, Mr. Daley suggested. "She has to figure out where she is going forward," Mr. Daley said.
At stake is not merely tens of millions of dollars in campaign money, but the shape of debates about social mobility, taxation and regulation. In the next few years, lawmakers may consider proposals to allow American corporations to "repatriate" overseas income at a reduced tax rate; change how the government backs home mortgages; eliminate the "carried interest" loophole that allows private equity managers to avoid paying higher tax rates; and more tightly regulate commodities trading.
"Secretary Clinton's time in the Senate was characterized by a willingness to work with all of the stakeholders, but she left the Senate just as the crisis was hitting its low point," said Francis Creighton, the top lobbyist for the Financial Services Roundtable, a trade association representing the largest banks and financial firms. "As an industry, we're not sure how her views have evolved over the last five years on what we do. The question is: Will her perspective have changed?"
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The last time Mrs. Clinton waded deeply into these issues, she was locked in a heated primary and the country was on the verge of the worst economic crisis since the Great Depression. She was early to call for tougher regulation of financial derivatives and private-equity markets, and in a 2007 speech called for major federal intervention in the market for subprime loans, arguing that "we need to acknowledge that Wall Street has played a significant role in our current problems, and in particular the housing crisis."
Several people who advised Mrs. Clinton on her 2008 presidential campaign said the speech angered some of her Wall Street donors, who complained about what they viewed as her increasing antagonism to the industry. Mrs. Clinton has also called for eliminating the carried interest tax loophole.
"If you look at her positions, in my view, she was very aggressive on ensuring that Wall Street was better regulated and her argument about all these proposals is that this is going to be better for all of us," said Neera Tanden, who was Mrs. Clinton's policy director during the 2008 campaign.
A spokesman for Mrs. Clinton, Nick Merrill, declined to describe her positions on a variety of current regulatory and Wall Street issues but said in an email: "Reducing inequality and increasing upward mobility has been an uninterrupted pursuit of hers through every job she's held, and it continues to this day in her work at the Clinton Foundation."
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If Mrs. Clinton runs for president, she will step into a heated debate about the interplay between financial regulation, growing inequality and the economic squeeze of the middle class.
The Third Way, a center-left think tank founded by two former Clinton administration aides, has assailed Ms. Warren, saying her economic populism would be "disastrous for Democrats."
As Democrats debate whether to get tougher on Wall Street, the industry appears to have taken notice. Securities and investment firm employees have given a smaller proportion of their political donations to Democrats over the last three years than any period for which data is available, according to the Center for Responsive Politics.
Financial regulation has also become a pivotal issue in the jockeying over who will become chairman of the Senate Banking Committee should Democrats keep control of the Senate.
Some Wall Street donors have been unwilling to give to Senate Democrats' re-election efforts, according to two Democratic lobbyists, because one of the leading contenders for the chairmanship of the Banking Committee is Senator Sherrod Brown of Ohio, who is pushing for a host of measures resisted by Wall Street, including higher capital requirements for big banks and a closer look at potential manipulation of commodities trading.
"I think most Democrats agree that Wall Street is too powerful," Mr. Brown said. "I understand some don't — talk to them about why. Too many in my party are too close to Wall Street."
Few political families are closer to Wall Street than the Clintons. Their family foundation has raised millions from financiers and the foundations of big banks, and recently held its annual briefing for donors in the auditorium of Goldman Sachs's headquarters in Manhattan. Major financial firms are stocked with Clinton alumni.
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And the Clintons often interact with the titans of finance on the Manhattan charity circuit and during their vacations in the Hamptons. Last month, Mr. and Mrs. Clinton sat at a table with Hamilton E. James, president of the Blackstone Group, and mingled with the billionaire David H. Koch at a benefit for the Wildlife Conservation Society.
Mrs. Clinton has recently staked some ground in the debate over wealth and opportunity, sprinkling speeches with calls to address what she has called the "cancer of inequality." In an opinion article in The Denver Post, Mrs. Clinton wrote: "No matter who you are or where you come from, if you work hard and play by the rules, you should have the opportunity to build a good life."
But Mrs. Clinton has also taken heat for recent comments she has made about her family's own wealth, including the lament about being "dead broke" after leaving the White House.
And some on the left say Mrs. Clinton's less combative approach to issues of taxation, Wall Street regulation and growth — "We're all in this mess together," as one person who had attended several of Mrs. Clinton's paid speeches described her message — was out of step with the current political climate.
In 2016, said Michael Lux, a political consultant who worked in the Clinton White House, "People are going to be in a surly mood, a populist mood. To have a Democrat too close to Wall Street, raising too much money from them, having a 'We're all in this together' message is a big mistake."
--By Nicholas Confessore and Amy Chozick, New York Times.