Stephen Colbert asked Hillary Clinton if she'd let big banks fail: 'Yes, yes, yes, yes, yes, yes'

Hillary Clinton Shares Plan For Big Banks On Stephen Colbert
Hillary Clinton Shares Plan For Big Banks On Stephen Colbert

Hillary Clinton told late-night host Stephen Colbert on Tuesday that she would not bail out banks if confronted with another crisis caused by risky behavior in the financial industry.

When asked by the "Late Show" host Colbert if she would allow banks to fail in the case of another financial industry meltdown, Clinton had an unequivocal answer.

"Yes," Clinton said, nodding. "Yes, yes, yes, yes, yes, yes."

The former secretary of state qualified her answer, saying that mandates included in the 2010 Dodd-Frank financial-reform package would safeguard against a situation like the 2008 collapse.

And in the case of a potential failure, she said the law allows banks on the verge of collapse to quickly liquidate assets, therefore theoretically easing the damage done to the financial system.

"Under Dodd-Frank, that is what will happen because we now have stress tests," Clinton said, before mentioning a proposal from her own plan to more heavily regulate Wall Street. "And I'm going to impose a risk fee on the big bank if they engage in risky investor."

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Clinton said if banks or other financial institutions become "too big to fail," she would considering pushing to break them up.

"And they have to know — what their shareholders have to know is, yes, they will fail. And if they're too big to fail, then, under my plan and others that have been proposed, they may have to be broken up," Clinton said.

Citing praise from New York Times columnist Paul Krugman, Clinton said her financial-industry regulation plan, released earlier this month, is the most comprehensive plan of any candidate. She argued the plan does not just focus on major banks, instead ensuring that risky behavior perpetrated by other large sectors of the finance industry — like insurance companies — don't threaten to cause a systemic collapse.

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Originally published