If she had not already emphatically dismissed the idea of running for president, Sen. Elizabeth Warren (D-Mass.) delivered what would have been a headline-grabbing stump speech on Wednesday.

Speaking at the at Bard College’s Levy Economics Institute, Warren presented her view of what is needed for continuing financial reforms beyond the Dodd-Frank Act. Among her ideas, many of which have been pitched in the past by others: a financial transaction tax to restrain high-frequency trading; restoring the former Glass-Steagall Act’s mandated division between investment and commercial banking; reducing the size and footprint of “too big to fail” banks; and tax changes that would discourage banks from reckless investments and excessive leverage.

The Federal Reserve, she said, needs a rule change that requires a vote by its Board of Governors on all major enforcement and supervisory decisions: “It is past time for the Fed to make enforcement a top priority.”

As for the biggest of banks, Warren supports capping the size of financial institutions, adopting a “21st century Glass-Steagall Act” that rebuilds the wall between commercial banking and investment banking, and preventing banks from obtaining government-provided deposit insurance if they engage in high-risk trading. Congress must also “carefully limit” the Fed’s ability to provide emergency lending to large banks. These structural approaches, she said, will be more effective than “relying on a more technocratic approach that just layers on more rules to limit risk-taking.”   

“Regulatory solutions that pit the government against giant banks too often get diluted over time with loopholes, carve-outs, and rollbacks, each of which favor a few well-connected firms over everyone else,” she added.

The amount of interest a financial firm can deduct annually should be based on the relative amount of capital that firm holds and the risk it poses,” Warren said. If, for example, a firm is well-capitalized, it should be able to deduct its interest without limitation. If it is not well-capitalized, it should either have to raise more capital, reduce its debt levels, or pay additional taxes to compensate taxpayers for the risk it introduces into the financial system.

Warren also pitched changing the tax code so “executive compensation is aligned with the long-term health of these companies and the economy.” Currently, corporations are taxed for any executive compensation over $1 million, unless that compensation is in the form of a performance-based bonus. This tax incentive has encouraged financial firms “to compensate executives with massive bonuses” and often “reward short-term risk-taking instead of sustained, long-term growth.” There should be “strong, enforceable securities rules that don’t create incentives for CEOs to use stock buy-backs as a way to manipulate prices in the short-term, rather than investing in the long-term health of their companies,” she added.

Throughout the speech, Warren slammed Republicans for ongoing efforts to rollback Dodd-Frank Act reforms and restrain the Consumer Financial Protection Bureau. She also had harsh words for the Securities and Exchange Commission.

“Dodd-Frank recognized that CEO pay should be aligned with the long-term interests of the stability of the corporation,” she said. “Five years later, the SEC still can’t seem to figure out how to write those rules. The SEC needs to get its act together—in all sorts of ways, and on all sorts of issues ranging from credit rating agencies to corporate political contributions.”

Enforcement is also not the priority it should be for the Commission, Warren said. “The SEC rarely takes any big institutions to trial, and it also fails to use other tools in its enforcement toolbox,” she said, pointing to its ongoing reluctance to revoke the status of “Well-Known Seasoned Issuer” if a company receives a criminal conviction or violates the anti-fraud provisions of the federal securities laws. “More often than not, the SEC waives this automatic revocation, and passes up yet another opportunity to meaningfully deter future misconduct,” she said.

“When small banks break the law, their regulators do not hesitate to shut down the banks, toss their executives in jail, and put their employees out of work,” Warren said. “But not so for the biggest financial institutions. The Department of Justice and SEC sit by while the same giant financial institutions keep breaking the law. Time after time, the government just says, ‘please, don’t do it again.’ It’s time to end the slap-on-the-wrist culture.”

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