U.S. Sen. Elizabeth Warren, one of the nation's strongest proponents of financial reform, praised Bernie Sanders' plan to hold Wall Street accountable Wednesday in a move that could rally support for his struggling presidential campaign. The Massachusetts Democrat has not endorsed a presidential candidate in the 2016 contest, but her support for Sanders as he and Democratic front-runner Hillary Clinton fight over who can best tackle Wall Street reforms will likely be viewed favorably by his campaign.
"I'm glad @BernieSanders is out there fighting to hold big banks accountable, make our economy safer, & stop the GOP from rigging the system," Warren tweeted of Sanders' Wall Street plan, which he announced in a speech in New York City Tuesday. She also wrote: "11 big banks are still so risky that if any one started to fail, they'd need a gov bailout or risk taking down the economy — again," and then added in a series of tweets supporting Sanders, "We need to level the playing field and end too big to fail."
I'm glad @BernieSanders is out there fighting to hold big banks accountable, make our economy safer, & stop the GOP from rigging the system.
— Elizabeth Warren (@elizabethforma) January 6, 2016
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Sanders has vowed to prosecute Wall Street executives and to tax speculators. He wants to pass what he called a "21st century Glass-Steagall Act" that would restore the boundaries between commercial and investment banking and has praised Warren in his campaign against big banks. She wants to reinstate Glass-Steagall, which President Bill Clinton repealed in 1999, and would break up big banks.
"Let’s be clear: This legislation, introduced by my colleague Sen. Elizabeth Warren, aims at the heart of the shadow banking system," Sanders said during his speech Tuesday. "In my view, Sen. Warren, is right. Dodd-Frank should have broken up Citigroup and other 'too-big-to-fail' banks into pieces. And that’s exactly what we need to do. And that’s what I commit to do as president."
Hillary Clinton, however, has said the White House needs to take a more moderate stance on preventing future financial calamity. "Nor would restoring Glass-Steagall help contain other parts of the 'shadow banking' sector, including certain activities of hedge funds, investment banks and other non-bank institutions," she wrote in a December op-ed for the New York Times. "My plan would strengthen oversight of these activities, too — increasing leverage and liquidity requirements for broker-dealers and imposing strict margin requirements on the kinds of short-term borrowing that also played a major role in spurring the financial crisis."
Clinton averaged a 25-percentage-point lead over Sanders in national polls in December.