Bloomberg Vows Tougher Wall Street Rules, Transactions Tax

(Bloomberg) -- Michael Bloomberg is proposing a financial transactions tax of 0.1% and merging Fannie Mae and Freddie Mac as part of proposal for regulating Wall Street for a financial system 'strong enough to weather crises without harming the broader economy or requiring taxpayer bailouts.'The former New York mayor said he would work with Congress to introduce the tax on all transactions, including stocks, bonds and payments on derivative contracts, and that it would be phased in gradually starting at 0.02%, according to the proposal released Tuesday. Bloomberg would also support measures such as setting a speed limit for trading.Bloomberg is calling for toughening banking regulations such as restoring the Volcker Rule, setting higher capital requirements at financial institutions, toughening stress tests of the largest financial institutions and increasing scrutiny of institutions such as insurers, the plan said.Under the proposal, Fannie Mae and Freddie Mac would gradually be merged into a single, fully government owned entity 'to ensure that taxpayers are fully compensated for the risks they are assuming' and lower-income households are served.(Bloomberg is the founder and majority owner of Bloomberg LP, the parent company of Bloomberg News.)Bloomberg's plan would also restore payday-lending and mandatory arbitration rules at the Consumer Financial Protection Bureau and give the agency jurisdiction over auto lending and credit reporting. It also would create a dedicated corporate crime group at the U.S. Justice Department and strengthen protections for whistle blowers.The 2008 financial crisis undermined faith in the financial system, and authorities should be doing everything they can to fix the flaws it revealed, Bloomberg said in his proposal.'Yet the Trump administration is rolling back what safeguards were put in place, and none of the candidates for president is offering a viable alternative,' Bloomberg said in his plan.Bloomberg's progressive rivals have backed aggressive steps targeting Wall Street. Massachusetts Senator Elizabeth Warren has proposed a 21st Century Glass-Steagall Act aimed at breaking up the big banks and plans to overhaul the private-equity industry 'so that Wall Street executives can't bleed companies dry and walk away with millions while workers lose their jobs.'The New York Times earlier reported details of Bloomberg's plan.(Updates with details of plan throughout. A previous version misspelled Volcker in second paragraph.)To contact the reporter on this story: Mark Niquette in Columbus at mniquette@bloomberg.netTo contact the editors responsible for this story: Wendy Benjaminson at wbenjaminson@bloomberg.net, Elizabeth Wasserman, Kathleen HunterFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.2020 Bloomberg L.P.
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