in Check It Out, Politics

Hillary Clinton Is Not Telling The Truth About Wall Street

Clinton’s attack on Sanders is as simple as it is untrue: Unlike Sanders, Clinton has argued, she is willing to take on “shadow banking” — a broad term for various financial activities that aren’t regulated as strictly as conventional lending.Sanders has in fact proposed attacking shadow banking in two principal ways: by breaking up big financial firms that engage in shadow banking, and by severing federal financial support for shadow banking activities by reinstating Glass-Steagall.

These would be substantive changes. A lot of shadow banking takes place at firms with traditional banking charters, like JPMorgan Chase and Bank of America. Some of it takes place at specialized hedge funds, or at major investment banks like Goldman Sachs. Breaking them up would not eliminate the risk shadow banking poses to the economy, but it would limit it. Risky shadow banking activities cannot bring down institutions that are too-big-to-fail if there are no too-big-to-fail institutions.

Yet the Clinton campaign has repeatedly said Sanders is wholly ignoring shadow banking, accusing Sanders of taking a “hands-off” approach to it that would not apply to firms like Lehman Brothers and AIG. This barrage has come from Clinton’s press aides, campaign CFO Gary Gensler, and Clinton surrogate Barney Frank.

Source: Hillary Clinton Is Not Telling The Truth About Wall Street