AP Photo Hillary's Wall Street crackdown: Less than meets the eye

Don't be fooled: Hillary Clinton isn't about to become the next Elizabeth Warren.

When it comes to policing Wall Street, Clinton appears to be saying just enough to avoid being trashed by allies of the liberal Massachusetts senator who rallies voters with her attacks on banks.


Clinton's presidential campaign on Thursday released details of a plan that sounded in some ways like classic Warren, including a call for a tax on high-speed traders and punishment for executives who continue to get off scot-free for wrongdoing while their shareholders suffer.

But while it may be a move leftward, Clinton’s plan lack's Warren's fiery rhetoric, and is also missing a key element many liberals say is essential: an unequivocal call for “too big to fail” banks to be broken up to reduce risks to the economy. And unlike Clinton's primary opponent Bernie Sanders and Warren, the former secretary of state isn't pushing to rebuild the firewall between investment banks and commercial banks. The jury is out on whether the blueprint will appeal to the liberals who are driving the debate on financial rules.

"Some of the things that are being said are very good and important steps in the right direction. Other parts of it we have concerns about," said Dennis Kelleher, president of financial reform advocacy group Better Markets. "The concerns are what appears to be an incredible over-reliance on regulators" and "the lack of a structural firewall to protect the American people."

Clinton did say large firms should be required to "downsize or break apart" — but only if they can't prove to regulators that they can be managed effectively. She also proposed a risk fee on the biggest banks.

Some financial reform advocates Thursday tried to tout silver linings in a plan that is said to have had input from their allies, including former Rep. Barney Frank (D-Mass.) and former Commodity Futures Trading Commission Chairman Gary Gensler. Frank was the co-author of the wide-ranging 2010 bill that overhauled rules for Wall Street after the financial crisis, and Gensler helped implement the law as a regulator, often to the dismay of the world's biggest banks.

Ty Gellasch, a former Senate aide who helped craft the Volcker Rule, said Gensler's involvement is "likely comforting to many progressives who still view Gensler as their reform champion."

“Really, from our perspective, we’re super happy," said Lisa Gilbert, a director of the Congress Watch division at Public Citizen, which has endorsed a Warren bill that would split up traditional banking from investment banking. “She’s being very specific ... It doesn’t seem like pandering when you go into this level of detail."

Clinton's plan for policing finance taps into major themes that have been driving Wall Street policy debates since the 2007-2009 financial crisis and passage of the Dodd-Frank financial regulatory overhaul in 2010.

She's proposing a tax on "harmful" high-frequency trading. Echoing author Michael Lewis, who argued in his best-selling book "Flash Boys" that stock markets are rigged and investors are suffering from a technological arms race among computer traders, her campaign said the tax would hit high-speed trading strategies "involving excessive levels of order cancellations, which make our markets less stable and less fair." Progressive Democrats in Congress, led by Rep. Keith Ellison of Minnesota, are also pushing a bill that would impose a financial transaction tax. But the policy faces an uphill climb in Congress.

Similar to Warren's Wall Street policy agenda, Clinton's plan also puts a big emphasis on ratcheting up accountability for individual bankers. Clinton is proposing that major fines for wrongdoing should affect the incomes of "culpable" executives and employees, and she would empower regulators to require that senior executives leave their jobs if misconduct is egregious. Clinton endorses a bill by Warren and Oklahoma Republican Sen. James Lankford that would require federal agencies to disclose more information about corporate settlements.

Clinton suggests a strengthening of the so-called Volcker Rule, named after former Federal Reserve Chairman Paul Volcker, that restricts the kinds of investments that banks can make with their own money. And in a proposal that appears aimed right at Warren supporters, Clinton proposes the reinstatement of a controversial derivatives regulation, known as the "swaps pushout rule," that was gutted last year over Warren's unsuccessful but well-publicized opposition.

An apparent gap between Clinton and Warren remains whether to pursue a big, structural change in an industry that's led by banks that have the proven potential to pose grave threats to the economy because of their size and interconnectedness.

Warren and Sanders back a revival of the Depression-era Glass-Steagall Act, which separated commercial and investment banking activities. The top Democrat on the Senate Banking Committee, Ohio Sen. Sherrod Brown, made an unsuccessful attempt in 2010 to attach an amendment to Dodd-Frank that would break up the biggest banks as well.

"One serious approach being advocated is to pass an updated Glass-Steagall Act, separating commercial and investment banking, to reduce the size of the banks and the risk of a taxpayer bailout," Clinton wrote in an op-ed posted on Bloomberg View Thursday. "I certainly share the goal of never having to bail out the big banks again, but I prefer the path of tackling the most dangerous risks in a different way."

In an interview Wednesday before Clinton's campaign began releasing details of her plan, Frank said Clinton was pursuing policies that are "in the spirit of Glass-Steagall but in contemporary terms."

"There was this inaccurate argument out there that she's been weak on the subject," Frank said of Clinton. "I don't know what that's based on, other than the fact she represented New York."

Patrick Temple-West contributed to this report.