US presidential candidate Hillary Clinton has indicated her administration would embark on a fresh bout of financial services industry reforms that go "beyond Dodd-Frank".
In a speech delivered at the New School in New York this week, the Democratic candidate and former Secretary of State announced she would seek an agenda focused on both “growth and fairness”, setting her sights on the ‘short-termism’ and self-interest of investment banks and financial institutions.
“Today’s marketplace focuses too much on the short-term, like second-to-second financial trading, and quarterly earnings reports, and too little on long-term investments,” Ms Clinton said.
“As president, I will work with every possible partner to turn the tide to make these currents of change start working for us more than against us, to strengthen, not hollow out, the American middle class.
“The measure of our success must be how much incomes rise for hardworking families, not just for successful CEOs and money managers and not some just arbitrary growth targets untethered to people’s lives and livelihoods,” she said.
Ms Clinton said the US economy disproportionately rewards some forms of investment, singling out “financial trading” over others such as “actually building and selling things”.
While praising the work the Obama administration has done on financial sector regulation, the presidential hopeful said new reforms need to go “beyond the [Dodd-Frank legislation]”.
“Too many of our major financial institutions are still too complex and too risky. And the problems are not limited to the big banks that get all the headlines,” Ms Clinton said.
“Serious risks are emerging from institutions in the so-called shadow banking system, including hedge funds, high-frequency traders, non-bank finance companies. So many new kinds of entities, which receive little oversight at all.”
Pointing to cases of misconduct at HSBC and other “major banks”, Ms Clinton said the practices of institutions will “change on [her] watch”.
No financial firm should be “too complex to manage or oversee”, Ms Clinton said, indicating she would enhance the federal government’s ability to oversee and punish “Wall Streeters”.
Aleks Vickovich is contributing editor at InvestorDaily based in Washington, DC.
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