WASHINGTON — President Barack Obama’s Wall Street reforms failed to tackle the problem of “too-big-to-fail” banks, Republican presidential hopeful Jon Huntsman said Wednesday in striking departure from GOP orthodoxy.
Staking a position that appeared closer to anti-Wall Street protestors than his rivals for the Republican nomination, Huntsman said a tax on extra-large institutions would be one way to reduce the risk of future taxpayer bailouts.
“More than three years after the crisis and the accompanying bailouts, the six largest American financial institutions are significantly bigger than they were before the crisis,” Huntsman wrote in a Wall Street Journal opinion article.
“There is no evidence that institutions of this size add sufficient value to offset the systemic risk they pose.”
Stating that “there is more than one fix” to the problem, Huntsman suggested Congress might impose “a fee on banks whose size exceeds a certain percentage of the GDP to cover the cost they would impose on taxpayers in a bailout.”
That, he said, would eliminate “the implicit subsidy of their too-big-to-fail status,” which allows banks to borrow at lower rates.
Huntsman sought to contrast his position with both Obama and the Republican front runner, Mitt Romney, who has been heavily backed by Wall Street dollars.
“The Obama and Romney plan appears to be to cross our fingers and hope no ‘too big to fail’ banks fail on their watch,” said Huntsman.
According to the Center for Responsive Politics, Romney received $7.5 million in campaign donations from the finance, insurance and real estate sector this year versus Obama’s nearly $4 million and Huntsman’s $400,723.
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