Hillary Clinton and Bernie Sanders had an argument about financial regulation during Tuesday’s debate
— but it wasn’t about whether to crack down on banks. Instead, it was
about whose plan was tougher. The contrast with Republicans like Jeb
Bush or Marco Rubio, who have pledged to reverse even the moderate
financial reforms enacted in 2010, couldn’t be stronger.
For
what it’s worth, Mrs. Clinton had the better case. Mr. Sanders has been
focused on restoring Glass-Steagall, the rule that separated
deposit-taking banks from riskier wheeling and dealing. And repealing
Glass-Steagall was indeed a mistake. But it’s not what caused the
financial crisis, which arose instead from “shadow banks” like Lehman
Brothers, which don’t take deposits but can nonetheless wreak havoc when
they fail. Mrs. Clinton has laid out a plan to rein in shadow banks; so far, Mr. Sanders hasn’t.
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