Former President Bill Clinton told some of Wall Street's top executives that fines levied against banks in connection with the financial crisis should be used to fund infrastructure improvements in the U.S.
"Where's that fine money going?" Clinton, 67, said yesterday in a speech at the annual meeting of the Securities Industry & Financial Markets Association in New York. "It should be put into an infrastructure bank to build a new American economy."
Clinton signed into law one of the biggest overhauls of the nation's banking regulations in six decades, undoing the Depression-era Glass-Steagall Act that separated commercial and investment banking. Wall Street executives, including former Citigroup Inc. Chairman Sanford "Sandy" Weill, have called its elimination a mistake that contributed to the creation of financial firms deemed too big to fail.
The six biggest U.S. banks have piled up more than $100 billion in legal costs, including settlements and lawyer fees, since the crisis, data compiled by Bloomberg show. The largest, New York-based JPMorgan Chase & Co., has reached a tentative $13 billion agreement with the U.S. to resolve multiple mortgage- bond probes.
An economic strategy that favored "trading as opposed to investment," contributed to the 2008 crisis, said Clinton, the 42nd U.S. president. Too much capital "went into housing, which created the bubble with the subprime mortgages, and then the securities that were spun out of them," he said.
Sifma, Wall Street's largest lobbying group, is sponsoring the annual meeting at the Marriott Marquis hotel in Times Square. Today, speakers will include former Florida Governor Jeb Bush, Securities and Exchange Commission Chairman Mary Jo White, Goldman Sachs Group Inc. Chief Executive Officer Lloyd C. Blankfein and BlackRock Inc. CEO Laurence D. Fink.