Wall Street reform

Wall Street must work for Main Street.

“Our banking system is still too complex and too risky … While institutions have paid large fines and in some cases admitted guilt, too often it has seemed that the human beings responsible get off with limited consequences – or none at all, even when they’ve already pocketed the gains. This is wrong, and on my watch, it will change.”

HILLARY CLINTON, JULY 13, 2015

The financial crisis showed how irresponsible behavior in the financial sector can devastate the lives of everyday Americans—costing 9 million workers their jobs, driving 5 million families out of their homes, and wiping out more than $13 trillion in household wealth. Hillary has a plan to reduce the risk of future crises and make our financial system fairer and more accountable.

Hillary’s plan will tackle dangerous risks in the financial system:

•Impose a risk fee on the largest financial institutions. Banks and financial companies would be required to pay a fee based on their size and their risk of contributing to another financial crisis.

•Close the Volcker Rule’s hedge fund loophole. The Volcker Rule prohibits banks from making risky trading bets with taxpayer-backed money—one of the core protections of the post-financial crisis Wall Street reforms. However, under current law these banks can still invest billions through hedge funds, which are exempt from this rule. Hillary would close that loophole and strengthen the law.

•Discourage excessive risk-taking by making senior bankers accountable. Senior managers should lose some or all of their bonus compensation when a large bank suffers losses that threaten its overall financial health.

•Make sure no firm is ever too big and too risky to be managed effectively.Hillary’s plan would give regulators more authority to force overly complex or risky firms to reorganize, downsize, or break apart.

•Tackle financial dangers of the “shadow banking” system. Hillary’s plan will enhance transparency and reduce volatility in the “shadow banking system,” which includes certain activities of hedge funds, investment banks, and other non-bank financial companies.

•Impose a tax on high-frequency trading. The growth of high-frequency trading has unnecessarily placed stress on our markets, created instability, and enabled unfair and abusive trading strategies. Hillary would impose a tax on harmful high-frequency trading and reform rules to make our stock markets fairer, more open, and transparent.

Hillary would also hold both corporations and individuals on Wall Street accountable by:

•Prosecuting individuals when they break the law. Hillary would extend the statute of limitations for prosecuting major financial frauds, enhance whistleblower rewards, and provide the Department of Justice and the Securities and Exchange Commission more resources to prosecute wrongdoing.

•Holding executives accountable when they are responsible for their subordinates’ misconduct. Hillary believes that when corporations pay large fines to the government for violating the law, those fines should cut into the bonuses of the executives who were responsible for or should have caught the problem. And when egregious misconduct happens on an executive’s watch, that executive should lose his or her job.

•Holding corporations accountable when they break the law. As she enhances individual accountability, Hillary will make sure that corporations don’t treat penalties for breaking the law as merely a cost of doing business, so that we can put an end to the patterns of corporate wrongdoing that we see too often today.

Read more about Hillary's plan here.