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Top Clinton Aide Blasts Sanders' Wall Street Proposals

A top aide to Democratic presidential front-runner Hillary Clinton on Monday criticized rival Bernie Sanders’ proposals to regulate Wall Street as doing nothing to address some of the riskiest financial
Sanders, who is Clinton’s chief challenger for the Democratic nomination for the November 2016 election, will deliver what his campaign is calling a “major policy address” on Wall Street reform in New York on Tuesday.
Clinton’s chief financial officer, Gary Gensler, a former chair of the Commodity Futures Trading Commission, said in a statement that Sanders should “go beyond his existing plans” to break up too-big-to-fail banks and endorse a risk-based approach that also deals with non-bank financial institutions.
“Any plan to further reform our financial system must include strong provisions to tackle risks in the ‘shadow banking’ sector, which remains a critical source of instability in our economy,” Gensler said.
“This includes certain activities of hedge funds, investment banks like the now-defunct Lehman Brothers, and insurance companies like AIG,” Gensler added, calling them some of the “biggest culprits” of the 2008 financial crisis.
"Senator Sanders won’t be taking advice on how to regulate Wall Street from a former Goldman Sachs partner and a former Treasury Department official who helped Wall Street rig the system," Sanders campaign spokesman Michael Briggs said, referring to Gensler's past positions.
Sanders, a democratic socialist and independent U.S. senator from Vermont who is popular with the Democratic Party’s populist wing, has made reining in Wall Street abuses and reducing income inequality his signature campaign issues.
He favors reinstating the Glass-Steagall law passed during the Depression, which prohibited commercial banks from engaging in investment banking activities. He also supports breaking up “too-big-to-fail” banks.
Clinton believes that reinstating Glass-Steagall, whose main provisions were repealed in 1999 during the presidency of her husband, Bill Clinton, would not address the types of institutions that have cropped up since the law was written in the 1930s. She has endorsed an approach that would break up large banks that take excessive risk.
Credit: Pulse
Clinton has said she would target the shadow-banking system by imposing limits on risky short-term borrowing, reviewing recent regulatory changes to the money market industry and enacting new reporting requirements for hedge funds and private equity firms.
Clinton and Sanders have sparred over how best to curb the risky behavior that caused the 2008 crisis, leading to some of the most contentious exchanges in their party's presidential debates.


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