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Clinton Proposal Calls For Breakup Of ‘Too-Big-To-Fail’ Banks

Headlines Politics Reuters

Clinton Proposal Calls For Breakup Of ‘Too-Big-To-Fail’ Banks


By John McCrank

NEW YORK (Reuters) — U.S. Democratic presidential hopeful Hillary Clinton on Thursday introduced a plan to curb what she called Wall Street abuses, including a “risk fee” on the largest financial institutions and breaking up banks considered “too big to fail.”

Under the proposal, Clinton would charge a yearly “risk fee” on a sliding scale on the liabilities of banks with more than $50 billion in assets along with other institutions overseen by financial regulators, her campaign said.

The proposals also called for raising the fines that regulators could impose on corporations and their executives, and imposing a new tax on high-frequency trading (HFT).

“These sound like much more meaningful reforms than some of the things she has suggested earlier,” said former Federal Deposit Insurance Corp Chair Sheila Bair, currently president of Washington College, in Chestertown, Maryland.

Clinton’s HFT tax would target securities transactions with excessive levels of order cancellations, which her campaign said unnecessarily burdens markets and enables unfair and abusive trading strategies.

HFT firms say their trading adds needed liquidity and that such a tax would end up making the markets less efficient and more expensive for all investors. There were also concerns that the proposals could be expanded.

“We are concerned that this is an opening salvo that could eventually lead to a proposal to tax mom and pop investors,” said Bill Harts, chief executive officer of HFT advocacy group Modern Markets Initiative.

Clinton would also pursue additional oversight of the “shadow-banking” sector by imposing other margin and collateral requirements on risky short-term borrowing; review recent regulatory changes to the money market fund industry for possible holes; create new reporting requirements for hedge funds and private equity firms; and strengthen the authority of the Financial Stability Oversight Council.

Unless the Democrats win a majority in the Senate and retake the House of Representatives in the 2016 elections, the chances of the proposals being enacted are low, Keefe, Bruyette & Woods said in a note to clients.

(Additional reporting by Ross Kerber, Sarah Lynch, Dan Freed, David Henry, Olivia Oran; Editing by Jeffrey Benkoe)

Photo: U.S. Democratic presidential candidate Hillary Clinton speaks during a community forum campaign event at Cornell College in Mt Vernon, Iowa, October 7, 2015. REUTERS/Scott Morgan



  1. JPHALL October 8, 2015

    Yeah the chances are low! About as low as Trump’s wall.

  2. Insinnergy October 8, 2015

    “”We are concerned that this is an opening salvo that could eventually lead to a proposal to tax mom and pop investors,” said Bill Harts, chief executive officer of HFT advocacy group Modern Markets Initiative.”

    Hahaha…. this guy should be a politician.
    That’s an enormous slippery slope bullsh!t argument. It takes immense resources to be screwing the market with millisecond HFT trading… well beyond the means of “Mom and Pop”
    What a tool.

    1. TZToronto October 9, 2015


    2. CrankyToo October 9, 2015

      Precisely! If you want to find the influences of unfettered greed and corruption on Wall Street, you have to follow the trail of the elephants – not Mom and Pop.

  3. joe schmo October 8, 2015

    And this is the woman who compares the NRA members to terrorists? WOW!

    History states: during the early Constitutional congress, the Anti-federalists proposed that a militia should be implemented in the states so that the government run military supported by the Federalists could NEVER take over the United States. At that time, the Federalists and the Anti-Federalists both agreed to this arrangement because they both wanted to insure that the country had checks and balances in order to protect citizens and their rights. In other words, they wanted to make sure that the government could never mobilize against it’s citizenry.

    Do your research people. You are out of line. The Silent Majority is seething……. I’m looking forward to Hillary’s indictment.

    1. dtgraham October 8, 2015

      joe, you are so full of it your favourite colour has to be brown.

    2. CPAinNewYork October 9, 2015

      I have a better plan: jail the bastards. There’s a book out titled “Too Big to Jail.”

      It presents a good argument for putting criminals like Jamie Dimon in jail for their roles in the 2008 financial meltdown.

    3. CrankyToo October 9, 2015

      Who comprises the “Silent Majority” of which you write?

      1. BillP October 9, 2015

        Him and his imaginary friends., you know the ones he always refers to in his ludicrous coments

  4. David October 9, 2015

    Typical Demorat approach…tax ’em!

    1. CPAinNewYork October 9, 2015

      No! Jail ’em.

    2. CrankyToo October 9, 2015

      Typical Republican approach… let the avaricious capitalists do whatever the hell they want.

      You must be one of those “mom and pop” investors Wall Street is so concerned about.

      1. David October 9, 2015

        “Avaricious”? Now, now… who is more avaricious — Capitalists who want to make a profit, or Demorats who want to tax more? I prefer greedy business people vs. a greedy government.
        How is Utah?

        1. CrankyToo October 9, 2015

          Answer: Capitalists. Our tax laws allow them to take money out of the economy and stash it offshore to avoid paying taxes which, by the way, is only one example of their avarice and lack of patriotism.

          Taxation puts money back into the economy, and is, by the way, the means by which needed services are provided to our citizens, vital infrastructure is created and maintained, and our government is able to project power and influence around the globe. The question of whether or not our taxes are always put to good use is a separate one. The answer would be “no” because our government doesn’t provided effective oversight (thanks to corrupt politicians, predominantly of the Republican ilk).

          Southern Utah’s still warm and sunny, my friend. And how are things down there in the Lone Star state? You weenies still contemplating secession?

          Question: What’s worse? Eleven million Latinos and Hispanics sneaking across our southern border, or eleven million Texans sneaking across our southern border?

          1. David October 9, 2015

            How our tax dollars are used is, indeed, a question to be considered. Also, the rate of taxation is a subject for debate as well.
            We may have to secede if Hildebeast, or one of her ilk, is elected next year. Texas is warm and sunny as well. Thanks to our Lord, we are out of the 4 year drought and our lakes and reservoirs are full. We are also excited about being now able to open carry our handguns. I still like concealed carry. The bad guys don’t know that you are packing.
            Answer: ISIS scum sneaking across the border with them.

          2. CrankyToo October 9, 2015

            We sure are gonna miss you folks…

            Later, Bro.

          3. David October 9, 2015

            Hope we don’t have to go. Later, Brother in arms.

          4. CrankyToo October 9, 2015

            Go Blue!

  5. yabbed October 9, 2015

    Sensible and rational is what we need in the Oval Office, not some blustering wild-eyed “punish the billionaires and millionaires” crap. To think of destroying Wall St is to plot America’s own downfall. We can reasonably regulate and close the free loopholes such as the carried interest giveaway to hedge funds without causing a world wide economic earthquake. This is common sense and doable.

  6. 1standlastword October 9, 2015

    Modifications to pay-to-play don’t equate with reform…sorry! Those corrupt greedy PHUCKERS will just transfer the liability to the investor and main street through a yet-to- be- created loophole!!!!

    Hillary is protecting her left flank because she’s feeling the Bern!

    And if Bill’s pathway to NAFTA is her road map then we know what we’re going to get!

    Untrustable??? LOL!!!

    I don’t trust it because Sanders talks and Hillary dances to the music. The pattern is too transparent

  7. bobnstuff October 9, 2015

    Breaking up the bank has been an idea for a very long time. Controlling our risks only makes sence. It’s the people with the power given to them by the big banks that are going to scream bloody murder. As far as taxing these people it doesn’t really matter to our economic growth what the tax rate is. The myth that if you take some of the 1%’s money they will stop making it has been pushed by those same people but if you use the tax code to make them reinvest the economy will grow and we will have the money to build our country. The 90% tax rates of the 50’s didn’t kill the country and we built the interstate high way system with the money as well as a lot of other projects. Break up the banks and tax non productive money. To bad it will never happen. The true power in this country is a shadow government that tell the politicians what to do. Money talks. We have the best government money can buy.


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