NEW YORK, Jan. 5 (UPI) -- Sen. Bernie Sanders, I-Vt., announced his plan for Wall Street on Tuesday -- a plan that involves breaking up banks deemed "too big to fail."
The proposal -- a cornerstone of his campaign against the influence of the "billionaire class" -- would use powers already granted under the Dodd-Frank Act.
Sanders gave a speech in New York City on Tuesday afternoon.
"If a bank is too big to fail, it is too big to exist," he said. "When it comes to Wall Street reform, that must be our bottom line."
Sanders called for the reinstatement of the Glass-Steagall Act, as he has on the campaign trail. The legislation mandated that banks separate commercial banking, investment banking and insurance services. Glass-Steagall was repealed in 1999 under President Bill Clinton, a move critics blame for the global financial crisis nearly ten years later.
Tony Fratto, a former Treasury official told USA Today that reinstating Glass-Steagall is "nonsensical and would damage the U.S. economy." Fratto is now a partner at a consulting firm that represents large financial institutions.
In his speech, Sanders called for "a banking system that is part of the productive economy, making loans at affordable rates to small- and medium-sized businesses so that we create decent-paying jobs," a system that is not "gambling trillions in risky financial instruments."
He detailed his plan to instruct the Secretary of the Treasury to compile a list of 100 "too-big-to-fail" institutions: "commercial banks, shadow banks, and insurance companies whose failure would pose a catastrophic risk to the United States economy without a taxpayer bailout."
Sanders promised to do so within the first 100 days of his presidency. Then, within the first year of his administration he would break up those institutions "so that they no longer pose a grave threat to the economy."
Hillary Clinton, Sanders' rival for the democratic nomination, attempted to preempt Sanders' speech Monday. Gary Gensler, the Clinton campaign's chief financial officer and former chair of the Commodity Futures Trading Commission, issued a statement criticizing Sanders' lack of attention to the "shadow banking" industry. The term refers to hedge funds and high-frequency traders.
"Unfortunately, Senator Sanders has so far taken a hands-off approach to some of the riskiest institutions and activities in our economy, which were among the biggest culprits during the 2008 crisis," Gensler said. "In his speech tomorrow, Senator Sanders should go beyond his existing plans for reforming Wall Street and endorse Hillary Clinton's tough, comprehensive proposals to rein in risky behavior within the shadow banking sector."
The Sanders campaign shot back:
"Senator Sanders won't be taking advice on how to regulate Wall Street from a former Goldman Sachs partner and a former Treasury Department official who helped Wall Street rig the system," Michael Briggs, Sanders' communications director, told Bloomberg Politics in an email.
Third-place Democratic candidate Martin O'Malley called out both Clinton and Sanders for not going far enough.
"Senator Sanders does not go far enough, but he certainly goes farther than the so-called 'weak tea' [Clinton] has proposed," deputy campaign manager Lis Smith told The Washington Post.