Wall Street executives who lost a bet that Republican Mitt Romney would defeat President Barack Obama are bracing for tougher regulation and hoping a deal can be struck with Congress to cut the deficit.

Obama's choice to succeed Treasury Secretary Timothy F. Geithner will be watched closely for signs about the administration's approach to business and the deficit, industry executives said. Erskine Bowles, who served as chief of staff under former President Bill Clinton, would be a sign that Obama is willing to endorse a bipartisan debt-reduction plan supported by many business leaders, they said.

“With the appointment of the Treasury secretary, Obama will be sending an important message to the public and to the foreign governments who own a lot of Treasuries,” Curtis Arledge, chief executive officer of Bank of New York Mellon Corp.'s investment-management arm, which oversees $1.4 trillion, told journalists in New York. “If he goes with somebody like Erskine Bowles, then the message will be that he cares about the deficit and is serious about cutting it.”