Democratic presidential candidate Bernie Sanders on Tuesday will seek to cast himself as Wall Street's toughest cop and rebut criticism from the Clinton campaign that his policies aren't comprehensive enough.
Continue Reading Below
In a policy speech on Tuesday in New York City--just blocks away from Wall Street itself--Mr. Sanders is expected to lay out more details of his plan to crack down on the industry. He will reiterate his calls for breaking up banks that are too big to fail and to reinstate the Glass-Steagall Act, which separated commercial and investment banking. Hillary Clinton, his chief rival and the front-runner for the Democratic nomination, opposes that measure.
"To those on Wall Street who may be listening today, let me be very clear," Mr. Sanders will say, according to prepared remarks provided by his campaign. "Greed is not good. Wall Street and corporate greed is destroying the fabric of our nation. And, here is a New Year's Resolution that we will keep: If you do not end your greed we will end it for you."
Mr. Sanders has made curtailing what he calls Wall Street greed a focus of his campaign. He also has questioned whether Mrs. Clinton, a former New York senator, can effectively police many of the same people and companies who have paid her and her husband large sums for speeches and in campaign contributions. In the second Democratic presidential debate, she struggled to explain her ties to Wall Street donors.
Earlier Monday, the Clinton campaign criticized Mr. Sanders's position on Wall Street as not comprehensive and said it lacked tough measures for the shadow banking system, which has expanded rapidly outside the conventional banking sector. "Unfortunately, Sen. Sanders has so far taken a hands-off approach to some of the riskiest institutions and activities in our economy, which were among the biggest culprits during the 2008 crisis," said Gary Gensler, a finance official with the Clinton campaign, in a statement.
Though it's not clear what new policies Mr. Sanders will propose on Tuesday, he will make clear that the reinstatement of the Glass-Steagall Act would aim to crack down on the shadow banking system. "Let's be clear: this legislation, introduced by my colleague Senator Elizabeth Warren aims at the heart of the shadow banking system," he will say.
Mr. Sanders will also say that as president, he would ask his Treasury secretary to create a " 'Too-Big-To-Fail' list of commercial banks, shadow banks and insurance companies whose failure would pose a catastrophic risk to the United States economy without a taxpayer bailout." Within a year, he would break up those entities.
Mrs. Clinton has called for new rules for shadow banks, including new constraints on borrowing by brokerages, which don't always face the tight borrowing limits that banks do, and a requirement for more public disclosures from hedge funds and new disclosures. She has also proposed safety measures for a type of short-term loan called a repurchase agreement, which played a role in the financial crisis of 2008.