How a Hillary Clinton New York Times Op-Ed lays down her plan for Wall Street regulation and to drink Bernie Sanders’ milkshake.
In a New York Times Op-Ed, Hillary Clinton recently laid out a plan on how she would “reign in Wall Street” if she were elected president. So what’s in her Wall Street regulation plan? Let’s find out!
Point 1: The basic underpinnings of Hillary Clinton’s plans to “reign in Wall Street” stems from her wanting to strengthen the existing rules in place with the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010.
Point 2: It’s important to note that even though stipulations do exist in Dobb-Frank about banks making risky financial decisions with public savings, there are many loopholes in place that financial institutions – especially banks – currently use to side step regulations. Clinton’s plan would try to close those loopholes, specifically those that allow banks to partake in risky credit swaps and derivatives. Or also known as, the things that essentially created the financial crisis back in 2008.
Point 3: The thing that Clinton won’t do is bring back Glass-Steagall; a depression era financial oversight law that separated commercial banking from investment banking. She argues that the implementation of Glass-Steagall would not have stopped the “reckless behavior” of financial institutions like A.I.G. or Lehman Brothers, nor would it have stopped shadow banking from occurring. What, you forgot what Glass-Steagall is? Well then, let Aaron Sorkin explain it in the most Sorkin way possible, by putting it in terms of losing the “perfect guy.”
Point 4: It’s important to note the issue of bringing back Glass-Steagall is something that Clinton and Bernie Sanders absolutely DO NOT see eye-to-eye on! This is probably the biggest policy difference between the two Democratic candidates.
Point 5: In terms of the banking sector, Clinton’s plan revolves around creating a “risk fee” for banks that have more than $50 billion in assets. The idea would act as a deterrent to banks so they don’t act recklessly with their investments. Also she would like to impose new rules that would allow the federal government to break up a banking institution if it became too large and risky to manage.
Point 6: Clinton would also strengthen the Volcker Rule; a stipulation put into 2010’s Dobb-Frank Act that denied commercial banks from taking certain monetary risks that a hedge fund would participate in like proprietary trading.
Point 7: A sticking point for many financial industry reformers over the past few years has been the fact that many financial regulators had come directly from financial sectors, specifically Wall Street. In Clinton’s new plan, she would look to make significant changes in terms of the regulators themselves. She proposes that both the Securities and Exchange Commission and the Commodity Futures Trading Commission be independently funded. This would be a significant change, which would theoretically give regulators more freedom to do their jobs and not be worried about being politicized by Congress.
Point 8: Even though there is very little concrete language explaining how Clinton plans to do this as President, she did say in the Op-Ed that executives at financial institutions needed to be held more accountable. This even went as far as to say, “No one should be too big to jail.” This included raising the proposed fines that executives would pay for reckless investments and eliminating the carried loophole tax that gives hedge fund managers billions in tax breaks.
Point 9: If there was a thesis to Clinton’s Wall Street regulation plan, it would be a happy medium between conservative regulatory plans (hands off and let the free market figure itself out) and the more progressive plans like Sanders’ (the financial institutions are already too powerful, we have to break them up now). Clinton’s plan essentially asks for regulators to be hard on the banking and investment industries only when they are reckless. Otherwise, she asks to let them be.
Point 10: Overall, Clinton’s ideas are a substantial road map on regulating Wall Street. While we would be lying to say that it’s as tough as Sanders’ plan, it looks to be a good enough olive branch for many liberals in the Democratic Party. It’s tough to say if her ideas would actually excite liberals, but one thing is for certain, she’s looking to get that sweet, sweet progressive vote away from Sanders.
(Photo Credits: Hillary Clinton’s Instagram, YouTube, Paramount Pictures)