How Hillary Clinton Thinks She’ll Be Tougher on Wall Street Than Bernie Sanders

PHOTO: Bernie Sanders, left, makes a point as Hillary Rodham Clinton listens during a Democratic presidential primary debate, Saturday, Nov. 14, 2015, in Des Moines, Iowa. PlayGetty Images
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Hillary Clinton is trying to turn the tables on Bernie Sanders.

The Democratic front-runner – often criticized for her close ties to Wall Street – is now attempting to argue she will be tougher on the financial industry than her challenger, Bernie Sanders – the progressive Vermont senator who is known for railing against “recklessness” by big banks.

Sanders, of course, isn’t having it, and the two candidates have now launched into a wonky war of words over who has the better plan to crack down on Wall Street.

“If the Republicans weren’t worried, then why are hedge fund billionaires already running ads against me?” Clinton asked the crowd at a Democratic dinner in Las Vegas Wednesday night.

One day earlier, Sanders slammed Clinton during his Wall Street reform speech in New York City where he promised to break up the big banks.

“Secretary Clinton says we just need to impose a few more fees and regulations on the financial industry,” he said. “I disagree.”

Let’s break down what the two Democratic rivals are saying about policing Wall Street.

Hillary Clinton

The crux of Clinton’s argument is that Sanders’ plan lacks specifics when it comes to the so-called “shadow banking” system – a part of the banking industry made up institutions like hedge funds and non-bank finance companies. Clinton says this banking system is the real culprit of the 2008 financial crisis -- which also has the potential to cause the next crisis as well.

“We are pleased to see that Senator Sanders is finally talking about the importance of dealing with risks posed by activities in the shadow banking system. Unfortunately, he failed to put forward a single new proposal that addresses those risks,” Gary Gensler, the Clinton campaign’s chief financial officer, said in a statement.

Bernie Sanders

Sanders has acknowledged that this "shadow banking" system was a factor in the 2008 financial crisis, but he argues that the reinstatement of Glass-Steagall would do more to protect everyday Americans from the next Great Recession.

“Now, my opponent, Secretary Clinton, says that Glass-Steagall would not have prevented the financial crisis because shadow banks like AIG and Lehman Brothers, not big commercial banks, were the real culprits. Secretary Clinton is wrong,” Sanders said.

“Shadow banks did gamble recklessly, but where did that money come from? It came from the federally-insured bank deposits of big commercial banks – something that would have been banned under the Glass-Steagall Act," Sanders said.

Clinton is opposed to reinstating Glass-Steagall, which was repealed under her husband's administration. Glass-Steagall was designed to keep commercial banking and investment banking separate.

"If I thought that alone would prevent the potential next crisis, I would raise my hand and join," Clinton said at a town hall in New Hampshire. "But that's not my assessment."