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Despite leaked Wall Street speech, Clinton’s policies show she would crack down on banks

While Donald Trump would “dismantle” financial reform.

Democratic presidential nominee Hillary Clinton. CREDIT: AP Photo/Andrew Harnik
Democratic presidential nominee Hillary Clinton. CREDIT: AP Photo/Andrew Harnik

Following through on its promise to leak internal emails in the Clinton campaign, Wikileaks on Friday published what it claims are emails from campaign chairman John Podesta’s account. The leaked documents purport to contain some of the paid remarks Clinton made for Wall Street firms, which she has refused to release publicly.

In one part of a speech she wrote for a financial audience, she apparently indicated that she believed Wall Street should be involved in writing regulations to oversee its own industry. “The people that know the industry better than anybody are the people who work in the industry,” she said, according to the leak.

The campaign hasn’t confirmed whether the documents are authentic, although it did not deny the speech excerpts were real when asked by the New York Times. The leaked emails also don’t have the full text of her speeches.

Clinton has been accused by both her Democratic and Republican rivals as being too close to Wall Street, and telling bankers that they should be helping to write their own rules could revive those arguments and anger proponents of reform. But the policies that she’s put forward since she delivered those speeches provide evidence that she would in fact crack down on Wall Street — while Donald Trump would let the industry off the hook.

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Clinton has defended the Dodd-Frank financial reform act that has already cracked down on risky trades, addressed the problem of “too big to fail” banks, and set up the Consumer Financial Protection Bureau (CFPB), which has delivered billions in relief for consumers from predatory banking behavior.

And she said she would go even further. She’s specifically called for stronger regulations for the so-called shadow banking sector, or financial activities that happen outside of traditional banking like hedge funds and derivatives traders that currently escape most oversight. She would also prioritize writing some rules that are still in process.

She’s vowed to prosecute and jail individual bankers for their misconduct, something almost everyone in the industry managed to escape after the financial crisis, and require them to admit when they were at fault. She would ban those found guilty from working in the industry. She would also extend the statute of limitations so that regulators would have more time to bring strong cases.

And she’s called for taxing high-frequency traders that use computers and algorithms to make money off of small market fluctuations and that have been blamed for destabilizing the markets.

During the Democratic primary, there were disagreements between Clinton and her rival Bernie Sanders over some other issues. Sanders proposed a financial transaction tax that would have been much broader than just taxing high-frequency trades and would have raised much more revenue. Sanders also called repeatedly for the reinstatement of Glass-Steagall, a Depression-era law that separated commercial banking from riskier investments, and breaking up the biggest banks. While the leaked emails show Clinton’s campaign considering getting behind Glass-Steagall, she ultimately never did.

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All of Clinton’s policy proposals stand in stark contrast to what her Republican rival Donald Trump has put forward so far.

Trump has called for “dismantling” Dodd-Frank’s financial regulations, which would reverse any progress the law has made and eliminate the CFPB. He would also go even further and stop the country for enacting any new financial regulations until the economy shows “significant growth,” although it’s unclear when that would be.

While Trump’s tax plan follows through on his promise to get rid of the carried interest loophole that lets private equity and hedge fund managers pay lower taxes on their income — something Clinton has promised to accomplish as well, using executive powers if necessary — he gives Wall Street other benefits. Beyond lowering the top tax rates for the wealthy and corporations, he would also lower the capital gains tax, or the tax rate paid on investment income rather than from salaries.

Trump has also accused Clinton of being “owned” by Wall Street because she’s taken tens of millions in donations from people in the industry. Yet Trump’s economic advisers team is stacked with people who come directly from finance and has also taken millions in donations from the industry.