WASHINGTON — Republican presidential candidates finally dug into financial policy Tuesday night, underscoring key differences over concerns about "too big to fail" financial institutions and the possibility of future bailouts.

The showdown was perhaps the most focused discussion of banking issues for the GOP competitors so far this season, with contenders sparring over how to rein in Wall Street and the role of the Federal Reserve.

While some candidates, including Donald Trump and Sen. Rand Paul, said little about the subject, many others outlined their views in detail for the first time. Below we offer highlights from the fight, including key policy differences among the candidates.


Asked about bailing out another bank in the future, former Florida Gov. Jeb Bush argued for higher capital requirements to prevent another crisis, before segueing into concerns about the burdens facing community banks.

On bailouts:

"We shouldn't have another financial crisis. What we ought to do is raise the capital requirements so that banks aren't 'too big to fail.' Dodd-Frank did the opposite, totally the opposite. Banks now have higher concentration in risk and assets and the capital requirements aren't high enough."

"If we were serious about it, we would raise the capital requirements higher and lessen the load on the community banks and other financial institutions. This vast overreach has created a huge problem for our country. Hillary Clinton wants to double down on that."

On regulatory relief:

"I was in Washington, Iowa, about three months ago talking about how bad Washington, D.C., is … and I talked to a banker there. This is a bank that had $125 million of assets, four branches. Their compliance costs because of Dodd-Frank went from $100,000 to $600,000 in a two-year period. … They had not one loan that went bad during the financial crisis. They knew their borrowers. They gave back to the community. They were engaged in the community."

"Imagine America without its community banks. Well, that's what's happening. That's my worry."


The retired neurosurgeon Ben Carson said that he wouldn't break up the big banks, while warning more generally about the impact of regulation.

"I think we should have policies that don't allow them to just enlarge themselves at the expense of smaller entities," he said.

"I would have policies that wouldn't allow that to occur. I don't want to go in and tear anybody down – that doesn't help us – but what does help us is to stop tinkering around the edges and fix the actual problems that exist."

On regulatory burden:

"What we've done now is let the creep of regulation turn into a stampede of regulation, which is involved in every aspect of our lives."


Sen. Marco Rubio, R-Fla., blamed government for propping up "too big to fail" institutions. Still, he argued that the banks use their "systemically important" status to curry favor, when in fact many institutions, including several insurers, would prefer to shed the label.

"Do you know why these banks are so big? The government made them big – the government made them big by adding thousands and thousands of regulations. So the big banks, they have an army of lawyers, an army of compliance officers; they can deal with all these things."

"The small banks, like Gov. Bush was saying, they can't deal with all these regulations. They cannot hire the fanciest law firm in Washington, or the biggest lobbying firm, to deal with all these regulations. So the result is the big banks get bigger, the small banks struggle to lend or even exist and the result is what you have today."

"And in Dodd-Frank, you have actually codified 'too big to fail.' We have actually created a category of systemically important institutions and these banks go around bragging about it. You know what they say to people with a wink and a nod? 'We are so big, so important, that if we get in trouble the government has to bail us out.' This is an outrage – we need to repeal Dodd-Frank as soon as possible."


Gov. John Kasich of Ohio offered the staunchest criticism of the banking industry, warning about "too much greed," while also pushing back on the notion of bailing a bank out. Yet Kasich also largely defended the idea of bailouts, setting him apart from his competitors.

On greed:

"I'll tell you about Wall Street – there's too much greed. And the fact is, a free-enterprise system is the system that's produced the greatest wealth for the world."

"Yes, free enterprise is great, profits are great, but there have to be some values that underlay it and they need a good ethics lesson on Wall Street to keep them in check so we the people do not lose."

Bailing out the banks:

"My argument is going forward, the banks have to reserve capital so the people who own the capital start pressuring the banks not to take these risky approaches."

"I would not let the people who put their money in there all go down. … As an executive, I would figure out how to separate those people who can afford it versus those people who are the hardworking folks who put their money in those institutions."

"When you are faced in the last financial crisis with banks going under and people who put their life savings in there, you've got to deal with it. You've can't turn a blind eye to it."

Kasich also attacked a plan to "audit the Fed" put forward by two GOP rivals, Sens. Rand Paul of Kentucky and Ted Cruz of Texas:

"I don't like what the Fed is doing, but I'll tell you what worries me more than anything else – turning the Fed over to the Congress of the United States so they can print the money. That would be a very bad approach."


Cruz said he would "absolutely not" bail out another bank, warning about the "crony capitalism" that's distorting the financial system. He also reiterated his concerns about the Fed's monetary policy regime.

On political influence:

"The problem that underlies all of this is the cronyism and corruption of Washington."

"The biggest lie in all of Washington and all of politics is that Republicans are the party of the rich. The truth is that the rich do great with big government, they get in bed with big government. The big banks get bigger and bigger and bigger under Dodd-Frank and community banks are going out of business. And by the way, the consequence of that is small businesses can't get business loans."

On bailouts:

"What the Fed should be doing is, No. 1, keeping our money tied to a stable level of gold and, No. 2, serving as a lender of last resort. That's what central banks do. So if you have a run on a bank, the Fed can serve as a lender of last resort. But it's not a bailout – it's a loan at higher interest rates. That's how central banks have worked."

On monetary policy:

"What the Fed is doing now is it's a series of philosopher kings trying to guess what's happening to the economy. You look at the Fed, one of the reasons we had the financial crash is throughout the 2000s we had loose money, we had an asset bubble, it drove up the price of real estate, drove up the price of commodities, and then in the third quarter of 2008, the Fed tightened them up – and crashed those asset prices, which caused a cascading collapse. That's why I'm supporting getting back to a rules-based monetary system."


Former Hewlett-Packard Chief Executive Carly Fiorina attacked Dodd-Frank and the Consumer Financial Protection Bureau, dipping into the roots of the housing bust as well.

On the financial crisis:

"What's interesting of Dodd-Frank is it's a great example of how socialism starts. Socialism starts when the government creates a problem and then it steps in to solve the problem. Government created the problem of a real estate boom – how did we create it? Under Republicans and Democrats alike, Fannie Mae and Freddie Mac, everybody gathered together … and said, homeownership is part of the American dream, let's create a bubble.

"And then government stepped in, by the way, under president George Bush, and banks were told – encouraged – told, really, to buy other banks, to take money. And now we've got Dodd-Frank, the classic of crony capitalism. The big have gotten bigger – 1,590 community banks have gone out of business."

On the CFPB:

"And on top of all that we've created something called the Consumer Financial Protection Bureau, a vast bureaucracy with no congressional oversight that's digging through hundreds of millions of your records to detect fraud."

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