Clinton ‘Risk Fee’ Targets Reliance on ‘Hot’ Short-Term Funding

Hillary Clinton’s proposed “risk” fee on big banks and other firms is aimed at discouraging large financial cos. “from relying on excessive leverage and the kinds of ‘hot’ short-term money that proved particularly damaging during the crisis,” according to her plan.

  • Fee wouldn’t be applied to insured deposits and thus wouldn’t affect traditional banking activities
  • NOTE: The Democratic presidential candidate is calling for a graduated risk fee on liabilities of banks with >$50b in assets; fee rate would be higher for cos. with greater amounts of debt and for firms with riskier, short-term forms of debt
  • NOTE: President Obama proposed similar fee, which his administration said would raise $110b, earlier this yr; financial cos. fought the proposal and Senate Banking Chairman Richard Shelby, R-Ala., called plan “dead on arrival”
  • NOTE: Clinton’s proposal is part of broad plan she says is aimed at curbing Wall Street “abuses”
Earlier: Clinton Calls to Break Up ‘Too Risky’ Financial Firms Link to full proposal: Clinton Campaign Releases Financial Regulation Proposal

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