Characterizing Wall Street as an industry run on “greed, fraud, dishonesty and arrogance,” Democratic US presidential hopeful Bernie Sanders pledged to break up the country’s biggest financial firms within a year and limit banking fees placed on consumers should he become president, in a fiery speech on Tuesday.
He coupled that promise, delivered in front of a raucous crowd just a few subway stops from Wall Street, with a series of attacks on rival Democratic presidential hopeful Hillary Rodham Clinton, saying that her personal and political ties make her unable to truly take on the financial industry.
“To those on Wall Street who may be listening today, let me be very clear: Greed is not good,” said Sanders, in a reference to Oliver Stone’s 1980s film, Wall Street.
“If Wall Street does not end its greed, we will end it for them,” he said, as a cheering audience jumped to its feet.
Sanders has made regulating Wall Street a focus of his primary bid, with calls to curb the political influence of “millionaires and billionaires” at the core of his message. However, the attacks on Clinton marked an escalation in his offensive against the Democratic front-runner.
Clinton’s policies, he said, would do little more than “impose a few more fees and regulations.”
“My opponent says that, as a senator, she told bankers to ‘cut it out’ and end their destructive behavior,” he said, to laughter.
“But, in my view, establishment politicians are the ones who need to cut it out,” he said.
Clinton responded at a campaign event in Iowa, on Tuesday evening, saying that her policies would take on a wide range of financial actors, including insurance companies and investment houses that helped spark the 2008 recession.
“I have a broader, more comprehensive set of policies about everything, including taking on Wall Street,” she said. “I want to go after everybody who poses a risk to our financial system.”
Clinton and her husband, former US president Bill Clinton, have made tens of millions in speaking fees from addresses to Wall Street banks, insurance companies and other financial firms — a fact Sanders alluded to in his speech, saying the banks give “very generous speaking fees to those who go before them.”
She also opposes reinstating the Depression-era Glass-Steagall Act, which effectively limited the size of financial companies by prohibiting commercial banks from engaging in investment banking activities. Sanders would re-establish the law, initially repealed during the Clinton administration.
Many economists question whether that law would have prevented the crisis, given that many financial institutions that failed, including Lehman Brothers and Bear Stearns, were investment banks and their failure would not have been prevented by Glass-Steagall.
Sanders vowed to create a “too-big-to-fail” list of companies within the first 100 days of his administration whose failure would pose a grave risk to the US economy without a taxpayer bailout. Those firms would be forced to reorganize within a year.
Sanders also said he wants to cap ATM fees at US$2 and cap interest rates on credit cards and consumer loans at 15 percent. He also promised to take a tougher tact against industry abuses, saying that major financial institutions have been fined only US$204 billion since 2009.
He also promised to restructure credit rating agencies and the US Federal Reserve, so bankers cannot serve on the body’s board.
“The reality is that fraud is the business model on Wall Street,” he said. “It is not the exception to the rule. It is the rule.”
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