“And, I will fight to reinstate a 21st Century Glass-Steagall Act to clearly separate commercial banking, investment banking and insurance services,” Sanders said during the 2016 speech.
2. Limiting the Size of Banks
Sanders is an ardent opponent of the “too big to fail” mantra that circulated Wall Street prior to the financial collapse 10 years ago. This time around, things will likely be no different.
Last year, Sanders took aim at large financial companies like J.P. Morgan Chase, Goldman Sachs and Warren Buffett’s holdings company Berkshire Hathaway, arguing that size equates to too much risk. Sanders introduced a bill that would break up any financial institution with a total exposure of more than 3 percent of gross domestic product.
“No financial institution should be so large that its failure would cause catastrophic risk to millions of Americans or to our nation’s economic well being,” Sanders said in a statement. “We must end, once and for all, the scheme that is nothing more than a free insurance policy for Wall Street: the policy of ‘too big to fail.'”
3. Restricting Corporate Share Buybacks
In conjunction with Senate Democratic leader Charles Schumer of New York, Sanders recently proposed legislation that would effectively place preconditions on a company’s ability to repurchase shares of its own stock.
“Our legislation would set minimum requirements for corporate investment in workers and the long-term strength of the company as a precondition for a corporation entering into a share buyback plan. The goal is to curtail the overreliance on buybacks while also incentivizing the productive investment of corporate capital,” Schumer and Sanders wrote.
According to an article in CNBC, “more than $1 trillion in buybacks were announced by large companies after a corporate tax cut pushed through Washington in late 2017 left companies with a lot of extra cash to spend. But instead of significantly raising worker pay or investing in equipment, companies mostly used the cash to buy their stock. And some large companies are buying back billions of dollars of shares while announcing layoffs and factory and store closings, the senators wrote.”
The legislation came about as companies like Walmart and Harley Davidson have caught heat for laying off hundreds of workers in order to free up capital to repurchase their own stock.
“At a time of huge income and wealth inequality, Americans should be outraged that these profitable corporations are laying off workers while spending billions of dollars to boost their stock’s value to further enrich the wealthy few,” the senators said.
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