10/8/2015

HillaryClinton:MyPlanToPreventTheNextFinancialCrash

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Hillary Clinton: My Plan To Prevent The

Next Crash
Posted By: VW Staff (http://www.valuewalk.com/author/valuewalk-staff/)
Posted date: October 08, 2015 04:14:31 PM In: Politics (http://www.valuewalk.com/category/politics/)
No Comments (http://www.valuewalk.com/2015/10/hillary-clinton-financial-crisis/#comments)

HillaryClinton'sBloombergViewcolumnonfinancialregulation.
Clintonwrites,Peoplewhocommitseriousfinancialcrimesshouldfaceserious
consequences,includingbigfines,disbarmentfromworkingintheindustryandthe
prospectofimprisonment.Aspresident,Iwillseektoextendthestatuteoflimitations
formajorfinancialcrimes,enhancewhistleblowerrewards,andincreaseresources
fortheDepartmentofJusticeandtheSecuritiesandExchangeCommissionto
investigateandprosecuteindividuals.Weshouldalsoholdfinancialexecutives
accountableforegregiousmisconductbytheirsubordinates.Theyneedtolosetheir
bonusesand,insomecases,theirjobs.
Second,IwillworkwithCongressandindependentregulatorstoreininthe
complexityandriskinessofmajorfinancialinstitutions.TheDoddFrankActthat
PresidentObamasignedafterthecrisishasalreadymadeimportantreforms,but
theresmoretodo.
Fullcolumnonlinenow(http://bv.ms/1ZhMpTa)HillaryClinton:MyPlanToPrevent
TheNextCrashandbelow.

Hillary Clinton: My Plan To Prevent The Next Crash

ByHillaryClinton
Sevenyearsafterthefinancialcrash,despiteimportantnewrulessignedintolawby
PresidentBarackObama,therearerisksinourfinancialsystemthatcouldstillcause
anothercrisis.Bankshavepaidbillionsofdollarsinfines,butfewexecutiveshave
beenheldpersonallyaccountable.Toobigtofailisstilltoobigaproblem.
Regulatorsdonthaveallthetoolsandsupporttheyneedtoprotectoureconomy.To

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HillaryClinton:MyPlanToPreventTheNextFinancialCrash

preventirresponsiblebehavioronWallStreetfromeveragaindevastatingMain
Street,weneedmoreaccountability,tougherrulesandstrongerenforcement.Ihavea
plantobuildontheprogresswevemadeunderPresidentObamaanddojustthat.
Intheyearsbeforethecrash,asfinancialfirmspiledriskuponrisk,regulatorsin
Washingtoneithercouldntorwouldntkeepup.TopregulatorsunderPresident
GeorgeW.Bushposedforapictureliterallytakingachainsawtobankingrules.
Beforethecrisishit,asasenatorfromNewYork,Iwasalarmedbythisgathering
storm,andcalledforaddressingtherisksofderivatives,crackingdownonabusive
subprimemortgagesandimprovingfinancialoversight.Unfortunately,theBush
administrationandRepublicansinCongresslargelyignoredcallsforreform.The
resultcost9millionAmericanstheirjobs,drove5millionfamiliesoutoftheirhomes
andwipedoutmorethan$13trillioninhouseholdwealth.
ThankstoPresidentObamasleadershipandthedeterminationandsacrificeofthe
Americanpeople,weveworkedourwayoutofthatditchandputoureconomyon
sounderfooting.Nowwehavetokeepgoing.
First,itstimeformoreaccountabilityonWallStreet.Storiesofmisconductinthe
financialindustryareshockinglikeHSBCHoldingsplc(ADR)(NYSE:HSBC
(http://www.valuewalk.com/stockdata/?stock_symbol=NYSE:HSBC))(LON:HSBA
(http://www.valuewalk.com/stockdata/?stock_symbol=LON:HSBA))allowingdrug
cartelstolaundermoneyorfivemajorbankspleadingguiltytofelonychargesfor
conspiringtomanipulatecurrencyexchangerates.Thisiscriminalbehavior,yetthe
individualsresponsibleoftengetoffwithlimitedconsequencesornoneatall.Iwant
tochangethat.
Peoplewhocommitseriousfinancialcrimesshouldfaceseriousconsequences,
includingbigfines,disbarmentfromworkingintheindustryandtheprospectof
imprisonment.Aspresident,Iwillseektoextendthestatuteoflimitationsformajor
financialcrimes,enhancewhistleblowerrewards,andincreaseresourcesforthe
DepartmentofJusticeandtheSecuritiesandExchangeCommissiontoinvestigate
andprosecuteindividuals.Weshouldalsoholdfinancialexecutivesaccountablefor
egregiousmisconductbytheirsubordinates.Theyneedtolosetheirbonusesand,in
somecases,theirjobs.
Second,IwillworkwithCongressandindependentregulatorstoreininthe
complexityandriskinessofmajorfinancialinstitutions.TheDoddFrankActthat
PresidentObamasignedafterthecrisishasalreadymadeimportantreforms,but
theresmoretodo.
OneseriousapproachbeingadvocatedistopassanupdatedGlassSteagallAct,
separatingcommercialandinvestmentbanking,toreducethesizeofthebanksand
theriskofataxpayerbailout.Icertainlysharethegoalofneverhavingtobailoutthe
bigbanksagain,butIpreferthepathoftacklingthemostdangerousrisksina
differentway.
Tostart,Iwillproposeanewfeeonriskthatwoulddiscouragethetypeofexcessive
leverageandshorttermborrowingthatcouldsparkanothercrisis.Weshouldalso
strengthenandenforcetheVolckerRulesobankscantmakeriskyandspeculative
tradingbetswithtaxpayerbackedmoney.Andifabanksufferslossesthatthreatenits
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overallfinancialhealth,seniormanagersshouldlosesomeoralloftheirbonus
compensation.Thatwillensurethatfinancialexecutiveshaveskininthegameanda
realincentivetoavoidrecklessrisktaking.
Myplanwouldalsogiveregulatorstheauthoritytheyneedtoreorganize,downsizeor
evenbreakapartanyfinancialinstitutionthatistoolargeandriskytobemanaged
effectively.Itisacomprehensiveandflexibleapproach.Itallowsregulatorstoadaptto
changingmarketsandhelpensurethatlargefinancialfirmsneverposeadangerto
ourentireeconomy.
Wevelearnedthehardwaythattheresnosubstitutefortough,empoweredregulators
withtheresourcesandsupporttodotheirjob.ThatswhyIvesupportedWisconsin
SenatorTammyBaldwinsbilltorestoretrustingovernmentandslowWallStreets
revolvingdoor.Weneedtofindthebest,mostindependentmindedpeopleforthese
importantregulatoryjobspeoplewhowillputconsumersandeverydayinvestors
aheadoftheindustriesandinstitutionstheyresupposedtooversee.
Third,weneedacomprehensivestrategytoreduceriskeverywhereinthefinancial
system.Afterall,manyofthefirmsattheheartofthecrashin2008,likeLehman
BrothersHoldingsIncPlanTrust(OTCMKTS:LEHMQ
(http://www.valuewalk.com/stockdata/?stock_symbol=OTCMKTS:LEHMQ)),Bear
StearnsandAmericanInternationalGroupInc(NYSE:AIG
(http://www.valuewalk.com/stockdata/?stock_symbol=NYSE:AIG)),werenot
traditionalbanks.Illpushforstrongeroversightoftheshadowbankingsector,
whichincludescertainactivitiesofHedgeFunds
(http://www.valuewalk.com/tag/hedgefunds/),investmentbanksandothernonbank
financecompanies.
Fourth,weneedtoensurethateverydayinvestorsandconsumerscantrustthatour
financialmarketsworkforthemandnotjustforinsiderswiththemost
sophisticated,specializedandfastestconnections.Thatiswhyweshouldimposeatax
onthehighfrequencytradingthatmakesourmarketslessstableandlessfair.Andwe
shouldreformtherulesthatgovernourstockmarketstoensureequalaccessto
marketsandinformation,increasetransparency,andminimizeconflictsofinterest.
Finally,IwillvetoanylegislationthatwouldweakenDoddFrank.Wecantgobackto
thedayswhenWallStreetcouldwriteitsownrules.IbelievewecandefendDodd
Frankwhileeasingburdensoncommunitybankssotheyareabletolendresponsibly
tothehardworkingfamiliesandsmallbusinessestheyknowandtrust.Wealsohave
todefeatRepublicanattemptstoguttheConsumerFinancialProtectionBureauan
agencydedicatedsolelytoprotectingAmericansfromunfairanddeceptivefinancial
practicesandtoexploittheupcomingbudgetanddebtceilingnegotiationsfor
rollbacksinfinancialreforms.
Thebottomlineisthatwecanneverallowwhathappenedin2008tohappenagain.
Justasimportant,wehavetoencourageWallStreettoliveuptoitsproperroleinour
economyhelpingMainStreetgrowandprosper.Withstrongrulesoftheroadand
smartincentives,thefinancialindustrycanhelpmoreyoungfamiliesbuythatfirst
home,makeitpossibleforentrepreneurstocreatenewsmallbusinessesandsupport
hardworkingAmericanssaving

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ABOUT THE AUTHOR

VW Staff (http://www.valuewalk.com/author/valuewalkstaff/)

(http://www.valuewalk.com)

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