Expect more financial regulatory changes, Schwab executives suggested Thursday --  and be wary of a new recession if Congress and the new administration don’t take steps to keep the country from going all the way over the so-called fiscal cliff.

“If we end up going completely off the cliff" – raising taxes while reducing federal spending comprehensively at the same time – "there is not enough cushion to prevent a recession," cautioned Schwab’s chief investment strategist, Liz Ann Sonders.

Sonders made the remarks in a conference call along with Mike Townsend, Schwab’s vice president of legislative and regulatory affairs.

The good news, she indicated, is that even a worst-case scenario of a recession probably wouldn’t have the impact of the last one in 2008. “It’s hard to get hurt falling out of the basement,” Sonders said, adding that a recession tends to occur after there have been huge excesses built up in the economy, which has not been the case in recent years. “So it’s sort of a sad reason that the recession might not be so severe.”

More Dodd-Frank Changes

The pair offered other assessments of the election results on the financial industry and overall economy: First off, Obamacare and the Dodd-Frank reforms – both of which have been targets for repeal by the president’s Republicans opponents – are here to stay.

“The Dodd-Frank financial regulatory overhaul is not going anywhere,” Townsend said. Following a “status quo” election he added, “ I think there’s a reluctance to open that up for revision.”

And that will mean substantial further changes on the regulatory front, he added: “Something like half of the regulations required by Dodd-Frank have been created at this point.”

No Deal Ahead?

Regarding the fiscal cliff, Townsend said he doesn’t anticipate a “grand bargain” between the parties before the end of the year.

“Neither side appears willing to blink on their basic positions,” he said. At a minimum, he believes both sides need to work together to delay the implementation of all the proposed fiscal changes.

Sonders described a series of positive offsets that could mitigate against another recession, although she said that, cumulatively, they probably wouldn’t provide enough counterweight to prevent one from occurring. Those offsets include better numbers on the housing and trade fronts and any stimulus provided by rebuilding efforts related to Hurricane Sandy.

She also pointed to some experts who believe that there could be an upside to the country tumbling straight over the fiscal cliff: It could enforce austerity on the country and help dramatically reduce the deficit, she said.

Sonders hastened to add that she doesn’t necessarily share this view herself.