WASHINGTON — Former Maryland governor Martin O’Malley, campaigning for the 2016 Democratic presidential nomination, called Thursday for urgent Wall Street reforms, including reinstating restrictions on commercial banks from partaking in investment banking practices.
“We made a commitment to the American people that we’d follow through on Wall Street reform,” O’Malley said during a discussion at the Truman Center for National Policy. “And we have not yet done that.”
Creating a modern version of the Glass-Steagall Act is among O’Malley’s top priorities. The law, which was established in 1933 but repealed in 1999 during the Clinton administration, is often cited as one of things that led to the 2008 financial crisis.
“For 70 years we separated the speculative banking activities from the depository, commercial banking activities,” O’Malley said, referencing the Glass-Steagall law. “And it worked!”
O’Malley, however, couldn’t pinpoint what changes he would make in the original Glass-Steagall Act, and why a modern version should be enacted. He passed the question on to former Rep. Brad Miller, D-N.C., who was a member of the House Financial Services Committee during his time on Capitol Hill.
”I do think that big banks have become too big and too complex,” Miller said. “There is no real reason that 10 $300 million banks can’t do what one $3 trillion bank can do.”
O’Malley also called for a halt to practices such as permitting financial institutions to neither admit nor deny wrongdoing in regulatory proceedings. And he said penalties should be stiffer for law-breaking financial firms.
“If you slap a bank robber on the wrist, he’s going to keep robbing banks,” O’Malley said. “The same is true if the person wears a suit.”
O’Malley challenged all Democratic candidates in the race — and even Republican hopefuls — to come up with new ideas for additional Wall Street reforms.
Just last week, Sen. Elizabeth Warren, D-Mass., introduced a bill that would reinstate the Glass-Steagall Act — legislation that drew the support of Democratic presidential candidate Sen. Bernie Sanders, I-Vt. Hillary Clinton gave an overarching policy address last week but made no specific statements regarding the Glass-Steagall Act.
The O’Malley-Miller conversation was originally scheduled to take place at the National Press Club, but O’Malley’s press team objected to the long-standing format wherein a club-designated journalist asks questions that have been collected from the audience. O’Malley’s team said they wanted to have questions from the entire press corps, not just a select few.