O'Malley says nation needs tougher oversight of Wall Street

AP News
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Posted: Jul 09, 2015 11:15 AM

WASHINGTON (AP) — Democrat Martin O'Malley is making tougher oversight of Wall Street a centerpiece of his presidential campaign, outlining steps to bring more regulations to large banks and tax high-frequency trading.

The former Maryland governor, in what his campaign called an open letter to the Wall Street megabanks, laid blame on the large financial institutions for the 2008 financial crisis as he released a series of policy proposals Thursday aimed at regulating large banks and cracking down on financial industry excess.

"As president, I have no plans to let up on you. I'll work tirelessly to eliminate the unique danger posed by the handful of too-big-to-fail banks," O'Malley wrote, adding: "Too-big-to-fail, too-big-to-manage, and too-big-to-jail — megabanks pose an enormous risk to the financial system, the economy, and American families."

O'Malley said he would seek to reinstate the Glass Steagall Act, which required Wall Street firms to separate their commercial and investment banking practices, until it was repealed in 1999.

He also intends to implement a financial transaction tax to limit high-frequency trading and reduce high-risk behavior on Wall Street. He would also install higher capital requirements for big banks, require banks and their executives who break the law to admit guilt, and double funding for the Securities and Exchange Commission and Commodity Futures Trading Commission.

Yet the plan wasn't released without a hitch. One of the footnotes in the 10-page policy white paper aimed at highlighting the revolving door between government and high-paying Wall Street jobs cited a fake news story from September 2014 that said former Attorney General Eric Holder took a $77 million job with JP Morgan Chase. Holder was still attorney general at the time and has since returned to his former law firm.

O'Malley deputy campaign manager Lis Smith said it was an "errant footnote" and the citation was removed from the online version of the document.

O'Malley has yet to gain much traction at the start of his primary bid against Hillary Rodham Clinton, the Democratic front-runner, and rival Vermont Sen. Bernie Sanders, but he has put forward specific policy proposals on climate change and college affordability aimed at attracting the party's base.

The ex-governor's agenda reflects Massachusetts Sen. Elizabeth Warren's populist push to police Wall Street in recent years. Warren was recruited to run for president by progressive groups but chose not to seek the presidency.

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