MANCHESTER, N.H. -- Presidential hopeful Bernie Sanders will pledge Tuesday that if elected president he would act within his first year to break up banks deemed “too big to fail.”
The promise is included in a speech that the Vermont senator is scheduled to deliver in Manhattan on Wall Street reform, one of the pillars of his upstart campaign for the Democratic nomination against Hillary Clinton.
In the address, Sanders plans to assert that “a handful of huge financial institutions simply have too much economic and political power over this country.”
“If a bank is too big to fail, it is too big to exist,” Sanders will say, according to excerpts released by his campaign. “When it comes to Wall Street reform, that must be our bottom line.”
As he has on the campaign trail, Sanders will also call for the reinstatement of a modern Glass-Steagall Act to separate commercial banking, investment banking and insurance services. Critics have argued that the law’s repeal in 1999 under President Bill Clinton contributed to the global credit crisis.
Wall Street is a frequent target of Sanders, a self-described democratic socialist who has railed against the political influence of the “billionaire class.” Campaigning here in New Hampshire on Monday night, he decried “the greed and recklessness and illegal behavior on Wall Street.”
In his speech Tuesday, Sanders will call for “a banking system that is part of the productive economy, making loans at affordable rates to small- and medium-sized businesses so that we create decent-paying jobs.”
“Wall Street cannot continue to be an island unto itself, gambling trillions in risky financial instruments,” Sanders plans to say.
He is expected to talk about the 2008 “bailout” of Wall Street by taxpayers and lament that three of the four largest financial institutions are nearly 80 percent larger than they were at the time.
“Incredibly, the six largest banks in this country issue more than two-thirds of all credit cards and over 35 percent of all mortgages,” Sanders says in his prepared remarks. “They control more than 95 percent of all financial derivatives and hold more than 40 percent of all bank deposits.”
Sanders will announce plans to direct the secretary of the Treasury within the first 100 days of his administration to establish 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, Sanders will promise, his administration will break up those institutions “so that they no longer pose a grave threat to the economy,” using authority granted by the Dodd-Frank Act.
Sanders has attempted to use Wall Street reform as a defining issue in the Democratic nomination contest, suggesting that Clinton, a former senator who represented New York, is too close to the financial industry.
In a bid Monday to preempt Sanders’s speech, Clinton’s campaign accused the Vermont senator of taking a “hands-off approach” to the so-called “shadow banking” sector and urged Sanders to endorse Clinton’s plan to better monitor the industry.
Meanwhile, a third Democrat in the race, former Maryland governor Martin O’Malley, asserted Monday that both Sanders and Clinton have not been aggressive enough in their proposed plans for Wall Street.
“Senator Sanders does not go far enough, but he certainly goes farther than the so-called 'weak tea' [Clinton] has proposed,” said O’Malley deputy campaign manager Lis Smith.