Warren: New Wall Street overhaul needed

Sen. Elizabeth Warren (D-Mass.) on Tuesday said Congress should write new rules for Wall Street because the regulators implementing the Dodd-Frank law have come up short.

Blasting the Dodd-Frank rules as years late and “watered-down” by financial lobbyists, Warren said the time is ripe for Congress to return to the drawing board and come up with new rules of the road for Wall Street.

“How much longer should Congress wait for regulators to fix this problem?” she added. “Another three months? Three years? Until the next big bank comes crashing down?”

{mosads}Warren’s remarks came 14 years to the day that President Clinton signed into law the Gramm-Leach-Bliley Act, which repealed chunks of a law that kept a firewall between traditional and investment banking.

Some liberal economic experts argue the repeal of Glass-Steagall encouraged the conditions that led to the financial crisis. And financial reform advocates who argue Dodd-Frank did not go far enough, including Warren, are pushing for its return.

Warren said the rules that are in place do little to prevent banks from becoming “too big to fail,” and noted that regulators have routinely missed their deadlines for creating new safeguards.

“Since when does Congress set deadlines, watch regulators miss most of them, and then take that failure as a reason not to act,” she said, according to prepared remarks. “I thought that if the regulators failed, it was time for Congress to step in.”

Warren, who has gone from consumer advocate to freshman senator, has vocally criticized President Obama’s financial regulators for failing to enforce strictly enough against bad actions on Wall Street. Her populist approach has made her a rock star on the left, and spurred speculation that she could mount a run for the White House in 2016.

Warren used the speech to tout legislation she has introduced with Sens. John McCain (R-Ariz.), Maria Cantwell (D-Wash.) and Angus King (I-Maine) that would re-impose the Glass-Steagall Act.

She argued that “dismantling the behemoths” would make banks more manageable and their business less risky.

Since joining the Senate at the beginning of 2013, Warren has butted heads with the administration on the question of “too big to fail.”

The Obama administration contends that Dodd-Frank gives regulators the tools to ensure that no single financial institution will again pose a threat to the entire system. But Warren noted in her remarks that since Dodd-Frank was enacted, the nation’s biggest banks have gotten larger, and the biggest five now control over half of the nation’s banking assets.

Warren allowed the possibility that regulators could draft rules to bring an end to the issue, but made clear that she believes Congress needs to act if they fall short. She also noted that she supported Dodd-Frank, calling it a “strong bill.”

“The big Wall Street banks are not chastened,” she said. “They have fought to delay and hamstring the implementation of financial reform, and they will continue to fight every inch of the way.”

Warren added that she was confident that David can beat Goliath in the fight over financial rules.

“We just have to pick up the slingshot again,” she said.