Tackling another issue important to the liberal wing of her party, Democratic presidential candidate Hillary Clinton rolled out a comprehensive Wall Street reform plan Thursday promising to crack down on rule breakers in the financial industry and impose new regulations and taxes on large banks to prevent another financial meltdown.
“The bottom line is that we can never allow what happened in 2008 to happen again,” she wrote in an op-ed in Bloomberg View timed to the roll out.
The lengthy plan posted on her website is more detailed than some of the other policies Clinton has proposed during her 2016 presidential campaign, and it includes a wide range of ideas supported by financial reform advocates.
First, it would punish individuals, not just corporations, that violate the law and make sure they face serious penalties, including imprisonment. It would impose a “risk fee” on riskier bets made by the nation’s largest banks to discourage over-leveraging among “too-big-to-fail” financial institutions. It would also impose stricter regulations on so-called “shadow banking” and impose a tax on high-frequency trading.
Clinton also vows to defend the Dodd-Frank financial reform act passed by Congress in the wake of the financial crisis and strengthen to Consumer Finance Protection Bureau, which was championed by Elizabeth Warren before ran for Senate, along with the Securities and Exchange Commission. She would also restore the law’s “swaps push-out” rule, which was removed in a controversial congressional vote last winter. And she would strengthen the so-called Volker Rule, which is meant to prohibit banks from using taxpayer money to make speculative bets.
Clinton’s plan does not, however, include a plan to replace Glass-Steagall, the Depression-era law that separated commercial and investment banking which was repealed under her husband, former president Bill Clinton. “I certainly share the goal of never having to bail out the big banks again, but I prefer the path of tackling the most dangerous risks in a different way,” she wrote in the op-ed.
Her top rival for the Democratic nomination, Sen. Bernie Sanders, quickly reminded reporters that he’s supports reinstating the law. “I was proud to lead the fight in the House against repealing the Glass-Steagall Act,” he said in a statement.
In general, he suggested -- without naming her -- that Clinton is a johnny-come-lately to this issue. “Given the image of big banks today, it is easy now to take on Wall Street. I was there when it was not so popular,” he said.
The campaign of former Maryland Gov. Martin O’Malley, meanwhile, was more direct. “Secretary Clinton’s plan falls short on what should be our ultimate goal: preventing reckless Wall Street speculators from backing up their bad bets with taxpayer money,” said O’Malley deputy campaign manager Lis Smith. She added that anything short of the repeal of Glass-Steagall “is a failure to deliver on our promise to prevent a repeat of financial collapse in 2008.”