i'm an optimist on this one. for a couple of reasons. yes, we do not have missile defense cooperation with russia in the year 2012. but we have been trying to do that for several months and what remember this was an issue of confrontation, fierce confrontation for decades, why should anybody be surprised we haven't been able to get this done in a cooperative way in a year? is the of the public statements about this, that come and the other but when you talk about the facts and talk about physics as opposed to politics, i think this is actually a place where with time and effort we are going to be about to cooperate.

and half a dozen others here. go back and read which he said were supposed to do. we checked out a lot of boxes. as result of that, what is left on the table or the hurt harder issues by definition. in our attitude towards that as we are going to continue to work along the principles that i outlined, without accepting

linkage come without printer values at the door as we go in and without accepting trade-offs with the relationship with russia and the relationship with other countries we have vital interests and paired >> okay, question in the back. >> i'll just speak loudly. welcome back. i'd like to ask you a lot of here it is looking to be an increasing trend of unrest inside russia and if you can speak to them and tell us, to see that movement is current and continuing towards the presidential election in the last week will bring to bear and how would you create the overall opposition in the given rights in russia and how does russia continue the arming of the searing regime? speak to that end do you think the four days of campaign against secretary clinton, including statements that present a lack that you are undermining russian government by supporting the opposition?

thank you. >> so you know better, but everybody else doesn't know. sign-up for apostol on twitter every single one of those questions have been answered on the twitter handle. i want to get back to kuwait because it affects foreign policy as well. i would interesting thing that's been new for me. so remind me. now i've forgotten all the question. [laughter] civil unrest. let's start with that one. first of all, i wouldn't call it civil unrest. i would call it civil society renewal. and there is a difference. there is a big difference. this is not a movement that is seeking the violent overthrow of the current regime. and people need to be very clear about that. they are very clear about that. they seek to engage through peaceful action to reform and

that's different than other places around the world. and they want you to understand that they are different and that is what they're trying to do. i just said i used to teach portions on these topics than what is there and is predicting where these things go weird really bad at because i am not a structuralist, by the way in terms of the academic debate. but the contingency and agency matters are predicting contingencies and agencies by definition is hard to do. i would just say in broad stroke is that there's a real politics and russia the society is taking. their constitutional rights very seriously. and the state is responding to that. not always in the way, you know, that we would like. i treated last week that as they arrested 400 people but that didn't seem like a good way to respond to peaceful protest.

and the nsa represented here i see it coming in outcome and they responded. reminded of the wall street demonstrators, by the way, occupy wall street demonstrators. i think that's healthy. i think that is good that we are having that kind of conversation between state and society and between our government. i don't see anything wrong about that. what i do think is wrong is when it is not conversation based on fact. so when we heard and i heard time and time again that, you know, trained to spain for the political opposition in russia, that is not true. that is not true. everybody, that is not true. i have to say it five times because people don't want -- but these have a political reason not to allow that truth to get

through. you know, we support civil society. we support the electoral observers. we're proud of that work. but we're not getting involved in those kinds of things. with respect to the attacks on secretary clinton and me, all i would say is our strategy for dealing with that is to engage directly in this smartly and comprehensively as possible. now it is difficult and the environment that we work in and that is why things like twitter and facebook are tremendously interesting tools. i only got on twitter six weeks ago. i never had a twitter account. not allowed to when i worked at the white house. and i was given very explicit instructions to use whatever means available to do a recall of public defunct. so i used the media. i've been on russian television,

on state channel. russia today as well as opposition. i think, you know, engagement is the right policy because we don't feel like we have anything to hide in terms of what we are trained to do. and i found twitter to be a really interesting way to engage with russian society. if you're not on twitter and i'm not going to ask for a show of hands because i want to embarrass people that are closer to my age and josh is, but i've got to tell you i felt like i knew something about russia before a move to russia. i worked on it for a bit and working at the white house for three years. the amount that i have learned in the last few weeks by just been on twitter is just shocking to me. i never, ever expected it. so i encourage you if you don't know what's going on in russia, you have to be engagement that part of society, not the other prior. and by the way, you know, it is very useful to work with you guys.

i frequently amusing work the u.k. due to push data into the russian debate. it would be great if you had a russian edition, by the way. so work on that. but that is important to you because you've got to push that kind of information to open up the debate. that is all i read tweaked other journalists, i'm doing it to open up the debates. but that is how we deal with those kinds of issues. [inaudible] >> we put out a statement, i'm sure you saw. and that reflects exactly what we thought, including the endorsement of the lse report which is very professional. >> okay coming avoiding the back. soon a cloudy reset. you know russia very well from years ago. i have a question that they do not expect you can answer honestly orenthal, but to mingle

at the one of the diplomatic bids might be interesting. this is about russia's relationship with their man and the sanctions regime that has been expanding and tightening on which the u.s. administration appears to be lying to do it the ring and threat. in the last big sanctions pushed that the international put together on saddam hussein's dream, russia was the leading by a leader. investing the subcommittee found corruption reaching up all the way to the kremlin. there is never a single investigation in russia. their prosecutions in france in the u.s. and never in russia. and here we are again. we have just seen and i take it as perhaps an emblematic sign, they shipped the chariot that delivered weapons to syria in january, nbc news, has just called in iran. i am told, carrying ukrainian generators. my question is, in this context,

if there's any prayer aggression not repeating with its remarkable talent and skill, distinctions evasions and violations that have gone on before, who exactly in russia is 19 that store? where does the buck stop? is there any authority at all pgc trained to track this down and went to prosecute violators? >> well, i don't know the story of iraq. i don't know any details about that, so you can't comment on that. what i would say it's russia's relationship to 1929 is very different than the u.n. security council resolution 1929, is very different -- i don't know if it's different because i don't have the options. >> it was just to say they have asked your hands. >> well, we do not see that happening right now. president medvedev took very seriously the negotiations over that revolution.

they deliberately carved out something that they did not want to have come under the sanctions. and we don't -- you know, you should investigate. and if you do, send me a copy and i will tweet it out. seriously, we do not see that as a serious problem right now. and moreover, even more striking, distinctions that we did and that we adhere to by law with national defense authorization act, that russia did not sign up for and did not support and is emphatically argued with best year in 1929 and was not done in good faith, both companies better effect to by those sections, their adherence to this section. and the reason is not because they love america or lover ran or hate heater fan. the reason is called the american dollar and the americans done.

and those affected by those don't want to be subject to losing access to that system. so they are doing and not about policy,, but out of self-interest. and i would say this is not yet a problem. does not mean that by not developed the one in the future. i don't see this as a problem right now. >> okay. yes, ambassador committal chiltern executive intelligence review. given what i would call a you're kind of in-your-face introduction to moscow as ambassador to the united states, do you think that where some of the circles consider you something of an enemy of the state virtually, it do you think this has significantly damaged the bonds of trust that is always necessary for cheap diplomats in another country with the powers that be, given the fact that president putin

come or they like it or not has been elected by a large majority and what were generally i think fair elections and you're going to have to do within, do you think you're damaged now as a result of the initial stages of your ambassadorship? >> no, i don't. and here's the reason. i worked for three years as president of the united states on a policy called the grease the pan in that job i worked with all those type of officials every day all the time on some very, very hard issues. in 1829 the resolution will keep coming back. that was a nine-month initiation of which the president of the president of the united states is intimately involved. new s.t.a.r.t. treaty, another giant negotiation, very difficult negotiation is a part of. the last big one, wto worked with mr. cheval and the entire russian government to get the deal done a lot with our

counterparts and was part of a team. they all know that. they do with me for three years and in my personal meetings of people, i've had no problems whatsoever. it is one thing for campaign organizers to say, you know, orange revolution. but at the highest level, i have had personal conversations to say, we are delighted we are here because we know we have somebody that is intimately involved with the execution under the policy. but for me personally have had nobody canceled any meetings. not that whatsoever in terms of the russian government. what happens on the internet and television is a different matter. although it's got to say, you know, engagement is our policy, so mr. pushcart wrote a program on me. he's the guy with television programming miscounted chairman of the international relations

committee. if you saw it, you know it's pretty tough. there is a lot of inaccuracies in my view. i had them over for dinner the next week. i were not going to agree, but i send administration, will not be the ones that allow us to go back to some kind of privatization of cold war, for tat, black-and-white world. we are not going to do it. if they want to do that, you know, maybe they will only cannot control what they do, but it is not what we are going to do. i met with mr. young's house the other day. he's another guy who sits in pretty tough things about me. mr. goes at night raise tweet all the time. that is what i am very to do. and they are to engage and to execute our politics. the other gain. i am not there to be anybody's friend. and i know that sounds kind of weird. i am there to represent

president obama and the obama administration and our national interest. and there's a little bit of confusion about that. and the discussion, you know, your russian, have an accent you don't really understand our traditions. i'm trying. i've got lessons i'm learning again. i'm trying my best to learn all that stuff. but at the end of the day, i'm not there to be a student of russian culture and history and friend. i'm there to advance our national interest and our policy. and i think given the background i have on the back and i have for the president and secretary clinton, i am a good representative to do that, even if it means at times there's going to be not just a lovely exchanges and dinner parties and the diplomatic staff. but i'm also having dinner parties and doing that stuff, don't misread me.

>> restaurant, we are conscious of our time. i think most of the sinister and certainly concur with what you just said. we are all delighted you are there. we thank you for taking the time to share your experience with us. visit forward to working with you and your colleagues on trying to get the mtr to quickly and successfully. we'll have several meetings with u.n. could commute to push our work with you a lot and we thank you very much for all you're doing and particularly for joining us today. [applause] [inaudible conversations]

>> our system is fundamentally undemocratic and a number of ways tiered one of the ways is closed primary. so i'd have to say in the country 40% of all the voters can't participate in the primary. and so, they have no say in who gets nominated. and as a result, we get more and more extreme candidates on both ends of the spectrum.

>> be acting chairman of the fdic recently called the rule of community bank quote underappreciated in a speech a new regulatory powers under the.frank lautenberg he gave the keynote address recently at george washington university law school in washington. this is part of an all-day symposium on wall street reform regulations and new consumer protections. it is about 40 minutes. the [inaudible conversations] >> we hope you enjoyed a good lunch. we've had a very interesting morning. we are delighted now to have the privilege and honor of hearing from chairman martin jay gruenberg of the insurance corporation. chairman gruenberg has a number of distinctions, but certainly one of the most for today's

event is that it works very actively on the senate banking committee for a number of years, served under senator our brains, was actively involved in the drafting of that statue, along with chairman ken fuller and nicely professor was personally untruths are to evolve. better if dean is involved in the banking committee, but obviously steve harris also we've heard from this morning. so we have a number of folks with us this morning who are truly veterans of that effort and give us some give on that statue. chairman gruenberg served on the senate banking committee, i believe i am writing sane, from from 1887 until 2005. previously he had received his law degree from case western reserve and undergraduate from print 10.

he became vice chairman of the federal deposit insurance corp. in august 2005 and then became team chairman when chairman powell stepped down and more recently became acting chairman when chairman sheila bair stuck down last july. so you certainly is a person who has had broad experience in the legislative branch, obviously the last supper years has been deeply involved in the regulatory policy arena, the fdic certainly has been at the center of efforts to contain the financial crisis. certainly very much at the center of legislative drafting of hurts with the dodd-frank act has certainly picked up some major new systemic risk responsibilities under dodd-frank, so we are delighted to welcome chairman gruenberg to

speak to us today. i expect he will be telling us something about the fdic is their responsibilities under dodd-frank and how those are implemented. he has kindly agreed to take a few questions after the prepared remarks. please help me in welcoming chairman gruenberg. [laughter] >> already. thank you very much for the kind introduction. art is an old friend. he served as a valued advisor on any number of bills that we consider down the senate -- the senate banking committee while it is fair. this big of a home week. i know steve harris was here again professor goldschmidt is here, all of whom have really played central roles in the formulation of the sarbanes-oxley certainly a man

and its implementation as well. so is a pleasure for me to be here. he made reference to former fdic chairman sheila bair, who i think was an outstanding leader of the fdic. sheila told me two things before she left. that one, being chairman of the fdic is a tough job and i cannot vouch for that. the second thing -- and so she was right on that point. the second thing she told me with everything would be okay. before she left. that she wasn't quite as ray. [laughter] and some other things as well. but if nothing else, it has been an interesting and challenging experience and i think the role of the fdic during the course of this financial crisis burley has been a very important one and i

think if i may say history will look back upon the performance of the fdic over the past three or four years then i think the performance will hold up pretty well. two things that i really wanted to talk with you about this afternoon. i want to take just a moment to talk about the condition of the banking industry. just earlier this week, tuesday the fdic released its quarterly banking profiles. i just wanted to share some of the results of that with you that with umno's been really the remainder of the time talking about the big new responsibility the fdic has under dodd-frank act, which is the responsibility for the resolution is systemically important financial institutions. that really is one of the key new authorities as provided under the dodd-frank legislation and i believe is crucial if we

are to deal with the issue of systemic risk and too big to fail and under the legislation, the fdic has the core responsibility for carrying out the very, very challenging responsibility. but if i may, let me start for a minute on the condition of the banking industry. 2011 represented the second pulley here is improving performance by the banking system. the latest data is indicated released earlier this week at our quarterly banking profile indicated banks have continued to be gradual but steady progress in recovering from the financial market turmoil and severe recession from 2007 through 2009. during the past two years, the

banking industry has undergone a difficult process of balance sheet strengthening. capital has been increased, asset quality has improved and banks of both to liquidity. i think it is fair to say that the industry today is in a much better position to support the economy through expanded lending. however, troubled assets and problem banks are still high and while the economy showing signs of improvement, downside risks clearly remain a concern. the fdic data does show a continuation during the fourth quarter of last year of the trend in overall improvement in the condition of insured institutions. industry earnings have grown over the past eight consecutive quarters. the percent of noncurrent loans on the books that fdic insurance

institutions has declined for seven consecutive quarters, reflecting improved credit quality at the number of institutions on the fdic problem bank list to client for the third consecutive quarter after five consecutive years of increases and the problem bank list. the positive insurance fund which had been as much as $20 billion in the red moved into positive territory as of june 30 of last year and continue to increase in the third and fourth quarters. and the fdic is forecasting significantly fewer failing banks this year than last. so the overall picture is really fairly positive. however, and this is an important point. most of the improvement in earnings over the last two years has been the result of lower loan loss provisions. a satisfied that the make reflect and improving credit

quality as the quality of lives have improved, they are able to lower their reserves. the future earnings gains will have to be based to a greater extent on increased lending consistent with sound underwriting. prudent loan growth is a necessary condition for a stronger economy. you can only generate earnings by reducing reserves for so long. at some point you have to start making notes again. that is where you view the fourth-quarter growth in the industry's portfolio, which is the third consecutive quarter of growth is a hopeful sign. the loan growth has occurred so far has been led by lending to commercial borrowers. monster media on large commercial and industrial borrowers have increased in each of the last six quarters. in the fourth quarter we saw growth and small, commercial and industrial loans as well. the fdic just began collecting quarterly data on the small loan

businesses and its march 2010 reporter. so our history here is brief. but since that time, this is the first quarterly increase we have seen in small scene i of loans. so longer-term trend of increased in ireland team for larger companies and with the uptick we saw in the fourth-quarter with regard to small and can we take that as a hopeful sign. we'll see how things develop over the course of the year. this is how something we are following a particular significance. if i may, let me turn to the fda sees new authorities under the dodd-frank act relating to systemic resolution. as you know, the fdic has been given significant responsibilities under the dodd-frank act to resolve systemically important financial institutions. specifically these include an

orderly liquidation authority to resolve the largest and most complex holding companies and non-bank financial institutions as necessary and required that for resolution plans that will give regulators additional tools with which to manage the failure of large complex enterprises. before discussing our efforts to carry out these responsibilities, i would like to try to place these responsibilities within the broader framework with the way the fdic is resolution at dvds regularly worked together with bank supervision and responding to the financial difficulty the fdic insured institutions. i think this is really quite an important point to make. the issue is not just to have authority to place historic companies in the process, the issue is really developing an

integrated system of bank supervision combined with pink resolution that allows less inventive framework for early intervention with these institutions to avoid failure is less capacity to manage in a orderly failure i want to go through that with you for a minute if i may. it is important to recognize that friend the resolution is always the option of last resort. the supervisory process is to be sure that institutions manage risks to the risk of failure is minimized. the goal is to have the supervisory process that can recognize problems and encourage management in a proactive way. when in institutions supervisory reading our capital adequacy is downgraded, the institution is subject to a variety of

supervisory responses intended to encourage management to take prompt action. the supervisory actions may include specific assistance of risk management product says formal or informal enforcement actions and orders to raise capital or seek merger partners that can bring in new capital and management expertise. under the current arrangement should the condition deteriorated, the fdic begins his resolution planning process in conjunction with jan going supervisory process and in close coronation with the primary supervisor of the institution. this would include undertaking could insurance download for the positive insurance purposes and developing a detailed resolution plan for the institution. the goal is to indicate it is to have an integrated process of supervision and resolution that will hopefully avoid closure at the institution, but that will

enable the fdic to prepare to carry out an orderly resolution is necessary. in such a process, motivated by the credible threat of failure, the managers and investors the problem institutions have an incentive, went to work with regulators to address the problems sooner rather than later, she waxes new sources of capital available for to solve the institution with necessary to salvage value of these to touché and. the threat -- the credible threat of failure is nothing like the prospect of hanging to focus the mind. what you really want to do is avoid the resolution process as possible. but if there is a belief that there won't be resolution, that in effect removes the incentive to address and a way problems of

the institution to avoid the cost of failure. our goal in regard to the fdic new systemic resolution responsibilities is to adapt this framework to systemically important financial institutions, including holding companies and affiliates as well as designated non-bank financial companies. this obviously pose significant challenges for the fdic cannot get to that in a moment. but the basic cause the same. resolution is the option of last resort. what is needed is an integrated process of supervision and resolution planning for systemically important financial institutions that will provide for early supervisory intervention to avoid resolution , but that will be prepared to carry out an orderly resolution if needed. the fdic and the lehman brothers

case actually refer to our website we can take a look at that paper if you're interested. do let me say a few words about the work we have done to prepare ourselves to carry out our new responsibilities. under title ii the dodd-frank act. the fdic has taken a number of status under the past year and a half to carry out its new systemic resolution responsibilities. first, the fdic established a new office with complex financial institutions to carry out three core functions. the first function is to monitor risk within and across these large complex firms from the standpoint of resolution. second, to conduct resolution planning and the development of strategies to respond to potential crisis situations and

third and quite importantly, to coordinate with regulators overseas regarding the significant challenges associated with cross-border resolution. the new joe at the very large and complex institution, you're generally doing what comes to nice but very significant international operations. and if you are going to deal with the orderly resolution of one of these companies, a cooperation with the foreign supervisors in these highly integrated global financial markets really becomes essential. for the past year, this office has been developing its own resolution plan in order to be ready to resolve the failing systemic company. these internal fdic resolution plan developed pursuant to the orderly liquidation authority provided under title two of

dodd-frank applied many of the same powers the fdic has long used to manage bank receivership's, applying them to a failing systemically important financial institution. if the fdic is appointed as receiver of such an institution, it will be required under the law to carry out an orderly liquidation in a manner that maximizes the value of the company's assets and ensures the creditors and shareholders appropriately bear in losses. the goal is to close the institution without putting the financial system itself at risk. this internal resolution planning work is the foundation of the fdic's implementation of its new responsibilities under dodd-frank. i'm about to get an involuntary description of what we are doing in regard to the living well

that the large companies themselves would be required to prepare. the people get confused on this point. the living well the companies themselves will actually be a complement to the internal resolution plan but frankly we've been working on for the past year and a half and for many of our largest institutions are in a quite advanced state of development. now in addition to the internal work, the fdic is largely completed the basic rule-making necessary to carry out its responsibilities under dodd-frank. in july, the board approved -- july last year, approved a final rule implementing the border liquidation authority of the rule-making address among other things the priority of claims and a similarly situated creditors and a resolution of a systemic financial company.

in september of last year, the fdic board adopted two girls regarding the resolution plans for systemically important financial institutions themselves will be required to prepare. these are the so-called living wills. the first resolution plan rule, which will be the joint rule-making of the federal reserve, during the authority we serve implements the requirements of section 165. this section requires bank holding companies with total consolidated assets of $50 billion or more and certain non-bank financial companies that the new financial stability oversight council has the authority to designate. this is really a crucial new authority that dodd-frank provides. previously, prior to dodd-frank the fdic had authority to close insured banks. we did not have authority to

close the holding company of the institution or their subsidiaries of the lending company. so one crucial new authority is dodd-frank, the ability place in the consolidated entity. the bank, holding company affiliates into public receivership. that is authority that did not exist before and in addition, the new financial stability oversight council can designate any non-bank financial company i systemic and by doing so, when the subject to the full credentials supervision authority of the federal reserve and could also subject to two systemic resolution authorities said the dic to say back in 2008, the first three companies that triggered the crisis for bear stearns, lehman brothers

and aig. two investment banks and the insurance company. so the importance of the new authority really speaks to us of. so these companies will now be required to develop the periodic planes to regulators. the plans will detail, how the top tier legal enterprises was in a subsidiary that conducts core business lines are critical operations to be resolved under the u.s. bankruptcy code. complementing this joint rule-making between the fed and the fdic, the fdic also issued a final rule requiring any fdic insured depository institution with assets under $50 billion to develop and outlining how the fdic would resolve it through the fdic is traditional resolution powers under the

federal deposit insurance act. people always get confused about this. the new authority under dodd-frank for resolution goes to the holding company and affiliates. they've always had the ready to close the bank. we now are requiring complementary resolution plans. when addressing the holding company affiliates, the second addressing the insured institutions. so hopefully we have a comprehensive resolution plan for the consolidated entity. these two resolutions are designed to work a tandem and complement each other by covering the full range of business lines, legal entities and capital structure combinations within a large financial firm. both of the resolution's requirements will improve efficiencies, risk management and contingency planning that the institutions themselves and will supplement the fdic own resolution planning with

information that would help facilitate an orderly resolution in the event of failure. we expect -- i should say the companies themselves, which are now in the process of developing the plans, once the site have been quite cooperative and responsive and they're actually recognizing some benefit. it is a little bit like cleaning out your attic or your basement developing the resolution plans predesigned things going on you had out about in a while, particularly for the large, complex institutions. they are actually finding it a fairly constructive process. we expect that the process of developing these plans will be a dialogue between the regulators of the firm. it is not a check the box exercise and will have to take into account each firm's unique mistakes. the planning process must also be an interactive dialogue with the firms, especially for the

largest and most complicated firms. together our first lunch or different coordinate resolution planning for both the insured depository holding company at affiliates in the event that an orderly liquidation is required. with the joint will build final, the fdic in the federal preserve had started the process of engaging with the individual companies on the preparation of the resolution plan. this has been a very active engagement in under the new rule, the first round of plans will be required from the largest kind to me over $250 billion in the first plans due in july. this is a relatively short timeframe that we've been working under for the largest institutions. i should note and i will conclude on this point. developing a credible capacity

to place a systemically important financial institutions into an orderly resolution process is essential to subject and these companies to meaningful market discipline. without this capability, these institutions, which by definition pose a risk to the financial system create an expectation of public support to the failure. that destroys the financial marketplace, giving institutions a competitive advantage that allows them to take on even greater risk and create a level playing field for other financial institutions that are not perceived as benefiting from potential public support. i would suggest to you that there is a very strong public interest in the fdic, developing the capability to carry out its new systemic resolution

responsibilities in a credible and affect the way. that is indeed our top priority going forward. thank you all very much. [applause] >> do you have any questions for chairman gruenberg? >> chairman, and fred had a professor university. why think about living wills, i think they are sort of part disclosure and they are part strategic and i wonder whether anyone in the agent he observes any sort of strategic behavior in the part of the bank samara drafting these things. for example, maybe they would want to actually give you a document that makes it harder to resolve you can't solve them. you've got to save them, for example. >> i don't think that is going to work.

look, this is the beginning of a new process that we haven't received the first planes yet. inocencio be a learning experience for the firms and for us. but i will say this much. i think one certainly when the federal reserve that the chart responsibility for the rule-making under supervision and enforcement of the rule i think are obviously approaching it with great seriousness and a high sense of puryear d. i think the companies understand that this is a new legal obligations they have under the law. at least in the initial engagement they seem to be taking it quite seriously and constructively. so we'll see how the process plays out in but we received in

the first round in july and take it from there. at least as far we are operating on the premise that all sides are going to approach this i am hopeful that it will be a project if exercised on both sides. >> currently there is unlimited deposit insurance for deposits and non-interest-bearing accounts. i'm wondering, that is supposed to end december 31 of this year, but i've also understand there are proposals pending to extend that insurance. can you give us some idea of what is the likelihood that that unlimited insurance to be extended? >> i should note that the insurance coverage you are referring to, which is enacted as part of the dodd-frank act, so does the statutory

requirement that was adopted by the congress, shall should be a decision for the congress on whether or not to extend that. if the authority of spires at the end of this year and will really be the congress's judgment on whether to exchange or not, i would expect they would consider both the commission of the industry, commission of the entitlement and making that judgment. we will certainly be prepared to provide input from the fdic's ad. that is going to be an accomplishment have to make. i think we should guess what the outcome is. >> is it something new is support however? >> we will provide input to the congress when asked. >> you expressed a good bit of

interest and concern i think in recent months about the condition of the trinity big industry in the third future of ip. they've certainly been very hurt by the commercial real estate downturn and there have been questions raised about is very pathway for them going forward given the important role they've played in the past, what he sees the future of the community banking industry? >> that is really an important question. to a certain extent, the rule of the community banks in our financial system has been somewhat underappreciated i think. you know, community banks are generally defined as assets under a billion dollars and those institutions are over nearly 7000 of the bill. the 7500 or so insured institutions in the united states, nearly 70,000 or community banks with assets

under billion. those institutions account for a little over 10% of all the banking assets. so they make up a minority of the assets of the system. at the account also for nearly 40% of all of the small business lending at all insured institutions. if you understand, credit for small business institution is the performance as the economy as a whole and the nature of small business lending, at least a lot of it is quite labor intensive and highly customized. you know, it is the kind of one being that the large institutions generally are not interested in doing. they're interested in getting started standardize products. the customized lending to small businesses really require are

particularly suited for the community bank in the late community banks to their business. so if we did not have a significant and capable community banking site are in the financial system caught it would be a real consequence for the financial system and economy as a whole. that is somewhat underappreciated. particularly during the course of the financial crisis, most of the attention has been on the big systemic. and clearly the rest of the regulators will be an ongoing priority i've talked about. now the other end of the spectrum for the community banks are all really quite important and i tell you in addition to

these responsibilities, the fdic is making the future community banks another priority over the course of this year in part because the fdic belief regular mutilator for community banks. we just hosted a conference a couple weeks ago on the future community banking and we are now going to be doing a number of things over the course of this year, including a series of roundtables with community bankers in each of our six regional offices around the country. we are going to a roundtable with community bankers in each of our region. bastardization insurance and research to undertake an effort to review the development of community banks the u.s. financial system over the past 25 years. to gain a better understanding of sort of what is happening to

community bank over that. couple what has been the problems in the business models have been successful. as far as i know, it is the first of its kind that's been done which somewhat surprised me. russo said he had community banks of the rezulin. so it actually seemed like a useful gap for the fdic to try to sell and i think we'll learn from lessons that will be useful to point the way forward for community banks. i've also asked activision of risk management supervision and division of depositor consumer protection to take a look at the way we do both rule-making and examinations of risk management and compliance for community banks. to see if there are ways in the margin that can do them simpler and more effectively and make our jobs easier and big jobs

easier while maintaining our supervisory standards. that's really going to be a major priority over the course of this year. we hope by the end of this year we'll pulitzer report back. but thanks for asking the questions. it's an important issue. but do one more. >> for compensation, one of the prime suspects the financial crash. this federal reserve put out a report of the year ago that found that none of the top 25 banks connected compensation with risk because there were no risk matcher x. i think it is section 39 of the fti act provides that the regulators regulate compensation but to feed risk and not dodd-frank has section 956, which prohibits compensation that encourages inappropriate

risk. the statute mandated you adapt assignable nine months after enactment. it is now two years. >> i'm aware of that. [laughter] >> what i can say is we did put out a proposed regulation that would establish really for the first time as a regulatory standard deferred compensation in regard to executive compensation, which i think is an important principle to establish and without getting carried away, hopefully we can reach closure in the rule-making because i carinthia. it is an important one. cnet please join me in thanking chairman gruenberg. [applause] [inaudible conversations]

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