Cohn’s Praise

For example, Cohn told the bank CEOs who contacted him after his Senate meeting that he was simply responding to a question from Massachusetts Democrat Elizabeth Warren, implying that he had been trapped into discussing Glass-Steagall. He added that he was echoing comments Trump made on the campaign trail as well as backing language in the Republican platform that expresses support for the law, said people briefed on the conversations who requested anonymity. Both executives were left with the impression that they shouldn’t fret, the people added.

Later in the month, Cohn and Phillips, who is leading the Treasury’s review of financial regulations, met in Washington with the board of the Securities Industry and Financial Markets Association, known as Sifma. The two talked more about creating jobs and boosting lending, rather than making structural changes to banks.

White House spokeswoman Natalie Strom declined to comment on the meeting. She said Cohn is “putting his extensive knowledge of the financial world to work for the American people, and they are the ones he is thinking about when formulating economic policy.”

Cheryl Crispen, a Sifma spokeswoman, said: “We are not going to provide a comment on any discussions from our board meeting.”

Banking Giants

The Glass-Steagall law was part of the government’s move to regulate Wall Street in the wake of the 1929 stock market crash. It was repealed in 1999, spurring a wave of bank mergers and the growth of large, one-stop-shop financial services companies. Among the best known was the combination of Citicorp and Travelers Group that created Citigroup.

The 2008 financial crisis and the $700 billion taxpayer bailout of Wall Street sparked a renewed interest in the law, as some Democrats and others on the left argued that splitting up the massive firms would ensure that they would never again threaten the economy or need another rescue.

Congress, however, took another tack, passing the 2010 Dodd-Frank Act, which piled on new capital requirements and trading rules but left the largest banks intact. The result, many executives say, is stronger institutions that are able to provide large-scale lending and other services that the biggest, global corporations need.

“Following the financial crisis, the U.S. debated this issue and decided that universal banks were good for the economy,” said Daniel Pinto, JPMorgan’s head of investment banking, in an interview Tuesday in Riyadh. “But they needed to be properly capitalized, have proper liquidity management and a strong resolution mechanism. That has already happened.”