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Hillary Clinton to propose high-frequency trading tax, Volcker rule changes
[NEW YORK] Hillary Clinton will propose a tax aimed at penalising "harmful" high-frequency trading strategies and offer ways to strengthen the Volcker Rule, among other measures, as she unveils another set of proposals Thursday aimed at what she has termed risky Wall Street behavior. The Democratic front-runner plans to call for a tax targeting trading strategies that rely heavily on order cancellations, a Clinton aide said Wednesday, previewing her announcements on the condition of anonymity.
In what her campaign is billing this as an effort to put the interests of the investing public before those of high- frequency traders and "dark pools," where securities are traded privately, Mrs Clinton will suggest that the Securities and Exchange Commission launch an overhaul of stock market rules to allow for equal access to markets, greater transparency and the minimisation of conflicts of interest. Mrs Clinton will also suggest adjusting the Volcker Rule, by eliminating the rule that allows banks to invest up to three per cent of their capital in hedge funds and reinstating the "swaps push-out" rule of Dodd-Frank, which was removed last year. Former Massachusetts Representative Barney Frank, the coauthor of the bill, has been advising Mrs Clinton and her team. Though Mrs Clinton, who served eight years as a senator from New York, has considerable Wall Street backing, she is under pressure from the left wing of her party - led by Senator Elizabeth Warren of Massachusetts and Vermont Senator Bernie Sanders, now Mrs Clinton's chief rival for the nomination. In Bloomberg focus groups earlier this week, voters cited Sanders' championing of middle class workers as a reason for his appeal.
Ever since she launched her campaign earlier this year, Mrs Clinton has sounded a markedly populist note. "We also have to go beyond Dodd-Frank. Too many financial institutions are still too complex and too risky," she said in July.
Mrs Clinton will also offer proposals to beef up individual accountability, calling for corporate fines for wrongdoing to come with penalties that hit workers' bonuses and extending the statute of limitations for major financial fraud to 10 years.
Mrs Clinton has framed her push to get tough on Wall Street as part of a philosophy of "clear-eyed capitalism," making sure that fairness for all is part of the equation.
"I believe we have to build a growth and fairness economy. You can't have one without the other," she said in July during her first major economic speech of the campaign, at the New School University in New York. "We can't create enough jobs and new businesses without more growth, and we can't build strong families and support our consumer economy without more fairness."