5-minute take: How Trump and Clinton differ on policing Wall Street

Donald Trump’s financial regulation outlook

Trump has been vocal about his dislike of Dodd-Frank legislation.

“Trump is really influenced by the school of thought that says that Dodd-Frank is really big and really complicated and imposed so many rules and regulations on the economy that it’s gotten in the way of growth and it’s impeded lending to small businesses,” Goldsmith said. “He’s said that he’s going to all but eliminate Dodd Frank. It’s not clear what he’s going to replace it with.”

His call against breaking up the biggest banks and taxing “carried interest,” which largely benefits hedge fund managers, actually aligns with Clinton. However, he, unlike Clinton, has also proposed to significantly reduce taxes on the wealthiest Americans.

One of his more controversial proposals is to audit the Federal Reserve. Supporters of the Fed believe worry this threatens objectivity in monetary policy.

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The tension around Hillary Clinton’s financial regulation views

“Clinton as a candidate for president has been shaped by two powerful forces,” Goldsmith said. “First, she was a senator from New York for eight years. She defended voting for TARP in part because it helped her constituents in the banking industry. But second she faced a ferocious primary challenge from the left and largely on this issue. And so her plan reflects that tension.”

Clinton said she will extend Dodd-Frank to the “shadow banking” sector to include hedge funds, private equity funds, and insurance companies, which in many ways were also responsible for the 2008 crisis. She would institute a risk fee on the banks and would increase taxes on short-term trading, because she wants to encourage investing with a longer view and perspective.

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