U.S. Democratic presidential hopeful Bernie Sanders delivered a speech on Tuesday advocating for structural reforms to the financial system in the United States, describing the Wall Street business model as fraudulent.
“The reality is that fraud is the business model on Wall Street. It is not the exception to the rule. It is the rule. And in a weak regulatory climate the likelihood is that Wall Street gets away with a lot more illegal behavior than we know of,” Sanders stated.
During his speech, Sanders, who is strong supporter of financial reform, criticized federal regulators for failing to introduce and impose stronger regulations on powerful financial institutions.
Sanders also called on the breaking up of too-big-to-fail banks and reinstating a version of the Glass-Steagall Act, a Depression-era law that prohibited commercial banks from engaging in investment banking activities.
“If a bank is too big to fail, it is too big to exist. When it comes to Wall Street reform that must be our bottom line. It is also true from the reality that a handful of huge financial institutions simply have too much economic and political power over this country,” the senator from Vermont noted.
According to Public Citizen, Wall Street spends US$1.5 million a day on 3,000 lobbyists in Washington.
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If elected president, Sanders vowed to create a more inclusive and responsible financial system, which would seek to create jobs and increase wages.
“We need a banking system that is part of the productive economy—making loans at affordable rates to small—and medium-sized businesses so that we create decent-paying jobs,” Sanders added.
Calls for greater regulation on banking activities increased following the the financial crisis of 2008, which revealed excessive speculation in the derivatives market, which led to massive bailouts of the entire financial system.
A recent poll by Lake Research, commissioned by Americans for Financial Reform, found nearly 80 percent of likely voters favored increased oversight in the wake of the crisis and most say they would favor more, not less, regulation of financial markets.