Hillary Clinton has picked Tim Kaine as her running mate, despite criticism from liberal Democrats for his lenient positions on Wall Street. A letter the senator from Virginia sent to the Federal Reserve earlier this week shows why they're frustrated.

In the letter, Kaine and three other senators ask Janet Yellen, the head of the central bank, and her colleagues to exempt some banks from a requirement that they report important data on their financial stability every day.

"The daily reporting requirements may impose significant burdens on the firms without associated benefits to the financial system," writes Kaine along with Sens. Mark Warner (D-Va.), Gary Peters (D-Mich.) and Robert Casey Jr. (D-Pa.).

This rule forces financial institutions to calculate their liquidity — a measure of how easily banks can pay any debts they owe in the short term. Calculating liquidity can be a complicated process for a large financial institution, and without having to meet daily requirements, banks would be able to make riskier, more profitable investments.

In a financial panic, it can be difficult for banks to secure new loans, so they must be able to cover their existing debts without borrowing money from another bank. If depositors doubt a firm's ability to do so, there could be a run on the bank, forcing taxpayers to bail out the institution.

For that reason, from the perspective of some liberal reformers, the daily requirement is "incredibly important" for containing the fallout from a future financial crisis, said Mike Konczal of the Roosevelt Institute in Washington.

Confidence can evaporate quickly in a panic, Konczal noted. "It doesn’t matter if you could pay me next year or pay me next month if you have to pay me tomorrow," he said.

Kaine and his colleagues agree that the requirement is important, but they argue it should apply only to the very largest banks. The letter suggests that somewhat smaller banks should be required to report their liquidity only once a month.

That is already true for banks with less than $250 billion in assets, but Kaine and his colleagues call that an arbitrary threshold. They argue that banks that are somewhat larger should also be exempt if they are involved in similar kinds of finance.

There are only a handful of financial institutions in this category that could conceivably benefit if the rule were relaxed, federal data on the assets of major banks suggests. They include Capital One, PNC Bank, Bank of New York Mellon and TD Bank.

The authors of the letter contend that these banks, while large, are not as critical to the financial system and don't require the same kind of scrutiny as the largest institutions, such as Citibank and Wells Fargo.

For Konczal, that reasoning contradicts the basic argument that Clinton's campaign has made on Wall Street. In her debates with Bernie Sanders, the senator from Vermont, she argued that the size of a bank was not the most important issue, and that even smaller firms could fail and cause a crisis if improperly regulated.

"My proposal is tougher, more effective and more comprehensive because I go after all of Wall Street, not just the big banks," the former secretary of state told Sanders in a primary debate last year.

"Her argument was that you didn’t have to break up the big banks, because the real problem was with these smaller and mid-sized players being prone to runs and collapse," Konczal said. Kaine's position "really goes against how Hillary wanted to present herself as a financial reformer."

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