non-bank affiliate is, jeopardizes the bank you can force the best teacher and i don't think ever been used. >> time. >> i'm giving you the tools. >> the gentleman's time has expired. the chair now recognizes the gentleman from north carolina, mr. danger, for five minutes. >> mr. fisher, i will direct this to you first. welcome comments, many of y'all. why is more complex regulation typically complex capital and ineffective way of reining in market expectation of government bailouts? >> i'm sorry, i didn't you question. >> what is more complex regulation particularly more complex capital regulation and ineffective way of reining in market expectation of government bailouts? >> again, i think if you're simple and straightforward it's a better solution and complexity. one of the disadvantages of

complexity is it places a small and racial institutions at a disadvantage. if you talk to committee bankers they will tell you what they're hiring our lawyers and consultants rather than people that can make loans and affect the business and databases they are paid to do. so he gives an advantage again to those are big and rich, and the more complex it is the more you're just giving comparative advantage to those that have the means to deal with these complexities. and that means the very large institutions. and that's the simple is what i can possibly explain it. >> makes sense would you all like to respond, mr. hoenig? >> well, i mean, i'm not sure that understood your question completely, but i think the fact is that more capital is helpful. but if you have a subsidy that is driving you towards leveraging and it gives you a cost of capital advantage as mr. fisher is saying over regional community banks, it

leads to i think unintended bad outcomes where you didn't consolidate the industry, ever larger, and give them a competitive advantage that they don't otherwise deserve or would earn in the market. i hope i understood your question and answered it. >> banking is a complex activity these days. i think you need to grapple with that complexity. it doesn't mean you fine tune the complexity of your supervisory approach, regulations to it. but you have to be robust against the ways in which firms and markets can adapt to what regime you put in place. so that robustness is what you to look for and that's why i think, on the capital front i think there's a logic to risk weighted assets, but there's also a sense in which humility out to lead you to not place all your eggs in the basket of one capital regime.

and the value of simplicity i think comes forward then. >> let me ask you, mr. fisher or mr. lacker, how can we level the playing field between the smaller and the regional financial institutions compared to too big to fail? >> i think leveling the playing field is going to require eliminating the expectation of support for the creditors, the wholesale funding lenders that they benefit from. that wholesale funding source is what i see as the most, you know, the most consequential aspect of the advantage to be different just to larger institutions. sure being too big to fail comes with an outsized burden of compliance but compliance has hit a lot of small and regional institutions as well. a lot of the compliance burden

is a reaction to the risks that have been taken and the riskiness that we see in the banking industry, and the exposures of u.s. taxpayers and the government to seize institutions, large and small. if we were able to rely more on market incentives, on market discipline, there would be less of a need to continually grow the compliance burden on these institutions and that would help level the playing field as well spend my definition of leveling the playing field is a very small original bank or if you're in the 99.8% of the 5500 bank holding companies we have, the fdic has the same, and by friday, out by monday. if you screw up, your managemenmanagemen t for new ownership is put in place. the playing field will be level when that applies to all financial institutions, including large ones. >> if i can add, number one, you do need to get the capital

ratios to be more equal. right now the largest institutions have a capital advantage. number two, you do need to rationalize and separate out the commercial banks our commercial banks, the subsidy is confined to that. been whether you're a community bank or regional bank or large bank, you are playing on a much more level playing field. i think competition will be well served. >> leveling the playing field is the purpose of the dallas this proposal. >> the gentleman's time has expired. the chair recognizes the gentleman from delaware, mr. gornick, for five minutes. >> thank you, mr. chairman. and thank you to the painless. this is but a very interesting and fascinating discussion today. i don't know that we've shed any light on answering the question whether too big to fail exists or not, but without some really great discussion i think about that. i would like to say with respect to sifis been a privilege designation, it's funny, i've not had anybody company

requesting to be put in the category of being a sifi. in fact, just the opposite. people come to say it -- people come to us and said we shouldn't be in this designation, just as an observation. but i would like to pick up where mr. perlmutter left off, in the district court. and again start with you, mr. fisher, and asks the question, i think he was about to answer, ask, which is what problem do you have with the legislation as it relates to the firm that's brought into the district court by the u.s. treasury because it's in big trouble? >> i'm going to s. mr. hoenig to address this question if i may. >> sure. >> well, i think first of all you have this largest institutions in the country at risk of failure, and just to go to the federal reserve and the

fdic, and you get a two-thirds vote -- >> the potential is as mr. fisher said in his testimony to these eight institutions that take on the rest of the financial system. >> right. so you're up against this major consequence to the economy. then you go to the secretary of the treasury who has a choice, do i put in receivership and put that chaos and play, or do i do something else? there are options perhaps i can find that would not force it into bankruptcy and go to the district court, going to the president. so that's a very difficult process, which it should be, but i think when you then have the economy going down to tend to want to in and intervene in a way that doesn't cause failure. >> rightly. yes? >> yes. i mean, you're going to be very slow to act. >> so, the dish court judge determines whether to require

orderly liquidation under the act, correct? >> if the treasury secretary does bring it to them come yes. >> what if the legislation gave, are you familiar with the enhanced bankruptcy proposals that the people out of stanford have developed? >> yes. >> what if the district judge had the option of triggering either orderly liquidation authority or some sort of structure bankruptcy? i'm the expert as mr. perlmutter is in bankruptcy that there's no access to the wholesale funding source spent if i can comment on it, it's worth pointing out that in this scenario, congressman perlmutter laid out, actually they don't spend much time in court, in the sense in which that is true there's only limited aspects of the secretary of treasury's decision that are subject to review by the court.

and it's just these two fact-finding things out of five determinations that the secretary makes. >> okay, don't get -- i do have much time a. i'm interested in whether you think it would be a better process if you had, if the judge had that discussion? >> i think would be useful. i think would be useful if the regulators themselves could initiate bankruptcy. as things stand now don't have the option to do anything but orderly liquidation authority by themselves. they can ask the from to put itself in chapter 14. they can ask the from to put itself in chapter 11 i mean, but they can't force that. the hoover proposal would give regulars at the ability to do that. i think that would be valuable to i think it would be a better way to get to the right outcome. >> may i add, that if the stanford group is successful in the chapter 14, which they are now working on, which safety issues. one is debtor-in-possession

financing, how to provide liquidity which are now working very hard to solve, if it is successful, and i hope it is, then bankruptcy will be a natural first choice in every instance. and those are the two things that the orderly liquidation authority addresses. that's what it's there so you have to get the solution to make sure we can put them into bankruptcy. through debtor-in-possession and cross-border issues. that's what stanford is working on. >> thank you very much. my time has expired. >> we will now recognize mr. heard of virginia for five minutes. >> thank you, mr. chairman. i want to thank each of your for your testimony here today, and i'm sorry that ms. bair is gone because i thought her testimony is very interesting as well. it interesting as i listen to the testament of each of you that there really can be or should be some opportunity here to amend the dodd-frank law in a way that really can get us where

i think that we all want to be. and that's something that has eluded us over the last two years that i've been in this congress, and so this gives me some hope that maybe there is some possibility that we can do these important, important things that we must take the opportunity to do while the camp as mr. lacker said. unico all the things that we can do to control, tajikistan happening again we control the levers, if we will, and so i just am very interested in your testimony thank you for. against my first which went into ms. bair had she been in, she makes it pretty clear, she uses the word abolished. she says that bailouts are abolished under dodd-frank. but i hear something different from this side of the table that it's really not that clear. and when you look at the numbers, and those particularly interest in the numbers from the richmond fed the financial sector liabilities to their 27%

of the financial sectors liability debate enjoyed an implicit, and implicit government guarantee. and that being the case, and i know you can't speak for ms. bair, but can you help those of us as part of your were listening to very intelligent people, help us figure out where is the difference between what ms. bair is saying and what i think the facts are, and that is that there are tremendous, there is tremendous implicit guarantees as our risk. >> in ms. bair's defense, the legal authority under which we provided assistance to the merger of bear stearns and jpmorgan chase and assisted aig was 13-3, and the ability to craft a firm specific 13-3 program has been eliminate.

we can craft a program but it has to be of wide market availability. that sort of narrow sense that's true. but too big to fail has been around since the start of the early '70s as i said. that was, that was carried out via the fdic's authority. they had the ability to add extra money and pay off uninsured creditors, uninsured depositors in bank failures. and the federal reserve has a role, too, because when we lend to a failing bank before it's closed, we can let uninsured creditors get their money out before the closure takes place and the remaining hundred creditors are forced to take losses. so we still have those modalities but we still have those capabilities of keeping short-term creditors from having to bear, letting them escape without bearing losses. so that's the extent to which, that's why she says yes, that

authority we use, the way we chose to do it has been abolished. but we were doing at the waist before that. >> got it. anything you want to add to any of the? >> i think president lack has given a good explanation of what we think she meant by that. one of the things that has been touch on both sides of the aisle is this idea that the subsidy, the government subsidy that is real against competitive disadvantage to the largest banks, and i think you see that trend seems to me to be continued, that that trend in favor of those banks despite the fact that we are told that bailouts have been abolished continues, we continue to see that. and so it concerns me from an issue of competitiveness domestically, but are there other concerns that any of you have as it relates to global

competitors? obviously a goes to the heart of individual customers and banks, the competitiveness that exists in this country, but does any of this rise to the level of concern as it relates to global competitiveness? >> congressman, i've been asked that question a lot and i'm convinced that banking system that competes from a position of strength will be the system that wins it and i think having a strong capital situation, what we have now, we have a structure that is not a free market structure. it's heavily subsidized. because of that with capital levels that are lower than they otherwise would be. we are asking, if you will, directly or indirectly for its other members of the banking industry or the public to underwrite our ability to supposedly compete with the rest of the world. when we were, when we rationalize this before, when we had broker-dealers suffer from, we were the most competitive

capital market in the world. we were the successful nation from strength. >> the gentleman's time has expired. the chair now recognizes the gentleman from new mexico for five minutes. >> thank you, mr. chairman. thank each one of you for being here today. so we started this discussion today, whether not dodd-frank ended too big to fail. and a lot of different opinions. i think the first thing that i was curious about, now under title ii you have the insurance and our too big to fail firms dominantly banking firms? are those different financial firms backs because where i'm going is under title ii they are now covered by deposit insurance which gives them access to funds from firms to small to succeed it and so i just wonder what kind of revenge that we're giving too big to fail firms.

so forget whether or not dodd-frank did anything come with a different opinions, but what about mr. fisher, do you have an opinion about that ability for the too big to fail firms to get into the deposit insurance fund that? >> yes, sir. and i believe i've addressed that very specifically in my written submission, but just to summarize, again, the purpose of deposit insurance was the old-fashioned purpose of assessing commercial bankers to take in deposits, assure their deposit and in need to make the confluence of your constituents depend on. i believe that should be the sole purpose of that deposit insurance. in other words, i don't live wih complex bank holding, should be able to exploit that for other services they may provided by the way i don't want to take away their capacity to provide its other services, but it should be restricted to the original purpose for which was

intended. >> suffered at the decision was not dodd-frank technically ended it, we have given them a conduit to funds that they did not have access to before, which seems to hint that maybe it doesn't have as much effect that killing too big to fail of what some of friends on the other side of the aisle say. mr. hoenig, are the consequenc consequences, first of all, regulators have discretion, is that correct? i heard that comment. >> discretion for -- >> for making decisions on what to do and under circumstances of too big to fail during the bankruptcy. you've got discretion, correct? >> under bankruptcy it would go to bankruptcy court and it would be handled their. >> but as it approaches that the regular has the ability to maneuver certain tools i think from what ms. bair said? >> of course the regulars will examine the institution or deal with the institution come into some more capital to keep it from failing and so forth spent

does dodd-frank have any consequences for regulators if they choose incorrectly, or purpose would make a mistake speak is purposefully make a mistake speak with just if they make a mistake. we will just leave it at that. >> well, look, if it's a mistake its mistake unlike anything, that's what you have capital for our mistakes, management or otherwise. >> so i find the whole discussion that we're having today, we're going to great a regulatory agency that comes in and looks and determines if firms are qualified. but were going to turn that over to regulars. now keep in mind the regulars had been it for 10 years on bernie madoff that he was doing stuff but they turned a blind eye, and the courts found that the regulars could not be held accountable for the. they were shielded by the discretion of function exception, and the court did express, regrettable disdain or

the actions, but nothing happened. now, so we are trying to decide on fairly small nuances here, but there's no nuance in taking segregated customer accounts, and yet jon corzine still hasn't had anything to do. he took $1.5 billion, the regulars were sitting in the room watching them, multiple regulars, and not one thing going. so we're having this protracted discussion here today on should the regulations be tweaked here or tweak there. if we can't know the regulators accountable, i will guarantee you it does not matter if too big to fail is in place or it's not in place. with the regulars will have in their discretion in your terms, their discretion to determine whether or not think should be duncan was that they should get bailed out, and there's nothing that we as the american people, the taxpayer can do. and i just, these are the things that are making people furious out there in the streets.

they get stuck for people who have wronged every single bit of profit they can on risky adventures, and then the taxpayer gets stung with it and i will guarantee you this whole system has got many, many problems ahead of us if we don't get this right, if we continue to great a system of too big to fail through law. >> the gentleman's time has expired. the gentleman from kentucky is recognized for five minutes. >> thank you, mr. chairman. i think of all the data available to members of congress and observers of this interesting question about too big to fail, there's one piece of data that is most telling about whether or not dodd-frank have solved the too big to fail question. it's the statistic that mr. fisher points to that .2% of institutions control nearly 70% of all industry assets. so for those folks out there who say the dodd-frank have solved too big to fail, i think that is

a statistic that we ought to always keep in mind. to that point, have we seen a greater concentration of industry assets in these megabanks since the three is dodd-frank has been the law of the land? >> congressman, we have had greater concentrations, and certainly from before the financial crisis and now, yes, because the acquisitions that were made. was in a greater concentration in fewer hands. >> you've got kind of two parts to this. you've got the implicit the government taxpayer subsidy, the $83 billion subsidy, the lower, the cost of funding advantage for the sifis. but you also have the regulatory pressures placed on the point,

the 98-point, or 99.8%, the other banks, the regional banks, the committee banks, the consolidation we've seen in the smaller banks. i would like for the panelists to comment on not only the taxpayer subsidy and the funding advantage of the sifis, but also the effect of dodd-frank and cfpb and the regulatory pressures and the consolidation and the lack of new charters in the smaller banking sector, and whether or not that has exacerbated the problem of too big to fail? >> i'm just going to quickly comment because my other colleagues no doubt want to comment in the two and a half minutes left. i travel throughout my district, which is a large district, federal reserve desert of dallas, 11th district. i need constantly with bankers, to a person, these are committee banks, regional bankers. they are deeply concerned that they're being overwhelmed by

regulation and they're having to spend their monies as i said earlier hiring people, lawyers, et cetera, with all due respect to lawyers, to help them comprehend and deal with this rather than being able to afford with their limited budgets and their interest margins being so tight, hiring bankers to make wants to go and do what bankers are paid to do. so we are being constantly criticized and voice your concerns are being raised that they are waste want in terms of -- they are wave swamped in terms of, you mentioned other authorities that have been granted under this different legislation was enacted come and they just feel deluge. that puts them at a disadvantage because if you cannot spend time worrying about how to make alone, someone else will make for your. >> it just goes to show it's not just without not just look at title ii and ola and implicit tax their subsidy here but also the consolidation that's

happening and the lack of success in competition to the sifis because of the consolidation -- >> these are all consequences of this process. >> right. one final question as my time is expiring and the question is to all of you all. it relates to the regulatory discretion that is conferred on, under ola. and whether or not we are moving away from a bankruptcy rule-based rule of law based system to a system in which there is excessive discretion and we're moving away from the rule of law. and many people believe that the general motors, the automobile day out of recent years was highly politicized because the federal government conditions is bailout on gm giving preferred treatment to the union claims. president fisher and president lacker, under dodd-frank's ola,

could the fdic uses discretion to pick winners and losers much like we saw in the auto bailout? and picking winners and losers among carter's overfilled from and they publicized manner much like we saw in the auto bailout? >> at me say, first, just to clarify, in terms of the discretion under title ii to the fdic, it is limited, and besides that the fdic's own rule requires that you treat in terms of the order of preference the same manner as bankruptcy. i would point out even in bankruptcy, bankruptcy judge can make exceptions in terms of assuring that payments are made and that things continue. so it's not a broad-based discretion that they can pick whoever they want. it's very clear to identified in terms of the order of preferences that they had to stick with an exceptions have to be explained as carefully as a bankruptcy would. >> really quick answers from the others. >> he's right. the discretion is constrained at the fdic, but broadly speaking

they have, as i read the statute, more discretion, or authority, more leeway and a judge doesn't bankruptcy to violate -- >> just to clarify -- >> mr. fisher has nodded and consent. the gentleman's time has expired. that you're not recognizes the gentleman from south carolina, mr. mulvaney, for five minutes. >> thank you, mr. chairman. thank you, gentlemen, for sticking around but i want to go all the way back to one of the opening statements that was made but ms. maloney that caught my attention, the actual language of section 214. and she read actually. the second since is no taxpayer funds shall be used to prevent the liquidation of a financial company under this title and i think for some people, both in this room and outside of this room that sort of ends the discussion. but i think it's clear that doesn't end the discussion did you hard mr. green give a certain set of circumstances under which he would certain support additional taxpayer funds being spent. i think it's a much an open

question as to whether or not taxpayer funds to be used. help me walk through the process under which that might possibly happen. i turn to section 214 be, and this is the all funds expended in the liquidation of the financial company out of this title shall be recovered from the disposition of assets of such financial company but it contemplates that might not be enough to pay because the next half of this and says our shall be the responsibility of the financial sector assessment. let's skip for a second and possibly a different with the financial sector is but that's the word that is used. these assessments, number one can easy would it be to do that, mr. lacker, talking about a situation the economic situation where a major bank is facing? how easy is going to be to assess the other banks in the financial sector? >> really hard to do anytime the way, and my sense is that was envisioned both in the fdic is plans for implementing the act and act itself is that that's recovered after the fact, after assets are sold off in an

orderly way over the course of several years. then you do the calculation that says we've got to go back, without a whole we've got to fill. we go back. the point i would make by the taxpayer part, the key of translated into the. short-circuiting incentives of creditors. from the point it doesn't matter whether, we get the money would be different taxpayers, which is you but i think many as chair be unfair or you get from the man on the moon but ultimately you are short-circuiting incentives and that's what gives rise to excessive short-term wholesale funding. >> i recognize that. go ahead. >> i was just looking, sir, at the marks -- remarks made by, acting chairman of the fdic at a federal reserve bank of chicago conference, but just to make your point. he talks about the orderly liquidation authority fund located in the treasury department. welcome those are taxpayer monies. the orderly liquidation fun must either be repaid from her covers of the assets of failed firms or from assessments against larger

more complex financial companies, taxpayers cannot get any loss from the company under dodd-frank act. well, as i pointed out in my spoken comments, i mean, first of all these are taxpayer monies. there's an opportunity of sitting beside. i know we don't often talk about that but that's something to consider. let's say it's insufficient and you need to go back to the industry as you mentioned and justice them. they are given a tax deduction as a business expense for the expenditure of those funds. that is taking money from the taxpayers as far as i'm concerned. >> by the way, if we do get the assessments set up, who ultimately pays for those? >> the customer will pay for it. and i will venture to many of them skittish let me do one thing, title i, and i think title ii, is designed for idiosyncratic event, large institution get in trouble, if

you have a systematic meltdown as we had last time, i feel pretty confident that the congress will be asked for another tarp, and that's where you have. and the market perceives if you have a systematic meltdown that that may be the case. so you have many issues speak i think that's an excellent point. this might work if you have an aberration but if you want financial institution going up but it raises issues about what could happen if independent sooner situation where were. >> i completely agree. i remember how interconnected these firms are. i doubt you would have one alone. bankruptcy will be [talking over each other] >> if you deferred the market and just giving the sense of safety where there is none, you can encourage kurdish tell you can encourage kurdish tell into this it does when it should be doing -- >> which is why we should if you will rationalize or settled by the system so that we don't end up in the same position we did in 2008. we need to pull back the safety

net to commercial banking so speedy i hate to cut you off. 22nd. allow such the taxpayers shelled their no losses under this title but i would suggest you and the chairman that is simply unenforceable. that's going to make people feel good about voting for the bill but if think you have already seen and you just mentioned, there are folks initiative who under the right set of circumstances would use taxpayer money again even with dodd-frank in place and dodd-frank in place and i think it tells us a lot about where we are. thank you, gentlemen. >> the gentleman's time has expired. no other members are in the queue. i wish to thank all of our witnesses for the testimony today. without objection all members will have five legislative days within which to submit additional written questions to the chair which will be forwarded to the witnesses. i would ask each of the witnesses to respond as probably as you are able to without objection all members will five legislative days within which to spent extraneous materials to the chair for inclusion in the record. this year in stands adjourned. -- this hearing stands adjourned.

[inaudible conversations] it is criminal to me that i had to authorize my budget people, my financial able to write a check for $454 million, a little more than a month ago to extend our contract with the russians to continue to carry our cruise to the international space station for 2016-2017 because we have not yet brought about the american capability that's coming with our commercial crew program. the president's budget called for $821 million for commercial crude. we are not halfway there. the congress has to, my job is to try to persuade congress that the plan is good and that we're going to be efficient users of the taxpayers money and i've not been successful in that yet but i'm working on. we are up to 525, but as i don't every member of congress with whom i've talked, 821 million in the 2014 budget is vital if we are to make the 2017 date so

that what newt gingrich said is true, that americans are transported to space again on an american spacecraft. >> more with nasa administered and retired marine corps general charles bolden sunday night at eight on c-span's q&a. >> you're watching c-span2 with politics and public affairs. weekdays feature live coverage of the u.s. senate. on weeknights watch key public policy events and every week in the latest nonfiction authors and books on booktv. you can see past programs and get our schedules our website, and you can join in the conversation on social media sites. now a look at women working in wall street financial firms. this part of the new guide to settle includes a former bank of america executive and the founder of it personal finance website. it's 25 minutes. >> good morning.

mine and his cynthia fornelli and executive director of the center for auto quality. in behalf of the caq, we are thrilled to be supporting underwriter, again, of new york ideas. the caq as a nonpartisan nonprofit organization that serves investors, public company auditors and the capital markets. and it is my distinct honor to introduce our next panel. the girls club, women and wall street. our panelists are uniquely qualified to talk about the two issues that are near and dear to my heart, confidence in the capital markets, and advancing opportunities for women in positions of corporate leadership. although more women are advanced degrees in the united states than men do, and roughly an equal number of women and men represent our workforce, few women have earned positions of corporate leadership in the hallowed halls of wall street.

facebook coo sheryl sandberg spoke "lean in" has returned to the issue of why this is through the front page of the business section. sandberg and others have claimed that to break down the glass ceiling women must abdicate more fiercely for their own advancement. our next analyst, sallie krawcheck and alexa von tobel, have certainly learned this lesson as evidenced by the many career successes. sallie krawcheck, the former president of global wealth and investment management for bank of america, is currently an industry comment or focusing on her passions, regulatory reform, the analysis of big banks, and women in business. sallie was the first president of global wealth and investment management at bank of america, a new division that was launched after bank of america's acquisition of merrill lynch. although working in the immediate aftermath of the

financial crisis, sallie led the unit to $3.1 billion in profits during her two years in a position. valley previously served as ceo of city global wealth investment management, ceo of citigroup, and chairman and ceo of sanford bernstein. she began her career as a research analyst covering financial services, a role in which she was consistently named first interview by institutional investor, and called the last honest analyst by "fortune" magazine. alexa von tobel is the founder and ceo of learnvest, which she lost in -- launched in 2009 to help women be more financially savvy. learnvest has since grown to offer financial planning advice to empower people everywhere, men and women, to take control of their virtual finances. alexa has been selected as young

global leader by the world economic forum, featured as one of the coolest young entrepreneurs, and named to the ernst and young entrepreneur of women's class of 2011. we are lucky to hear from two women who truly are stars in the girls club. please welcome sallie krawcheck, alexa von tobel, and moderator, steve clemons, himself a star in the boys club. thank you. [applause] >> how are you doing to enjoy the day? is only just beginning. affected, come join me -- alexa, come join the. boys club, girls club. so you may to $3.1 billion for the bank of america and they fired you speak with you got it. [laughter] spent i think david bradley, our children, they be interested in

talking to you. save journalism. >> i was more excited in myself described as a girl. it's been a while. >> i didn't pick the headlines. in any case we are here to talk about a number things. we have such an open arena that we could discuss. women in finance, we could discuss things like sheryl sandberg's book in which she sort of goes to some degree the sociology and the architecture of constrained for women today, the atlantic also ran the most red cover article our most read article ever in our history, it was by anne-marie slaughter, why women still can't have it all. and i've been in a room with her, with 700 other people where women will walk up and cry and say this is their life story, another say what a person who is disconnected from the real world, because there's another group of people. sallie, where in the why women still can't have it all line do you see yourself? >> i sort of backup, which is if

there were one answer to success for women in business, we are not so dumb. we all would've already sold it. we all understand and see the research, which is that nothing bad happens when women are in positions of power. in fact, only good things happen. it in positions of power in countries or in businesses, high returns, better stockholder returns, lower volatility, more client focus, less risk. good things happen. and so the research is there. the challenge -- >> why did that scare your ceo so much because let's keep that aside for the time being. let's talk on a macro issue but i think one of challenges is, is what for and we have this amazing robust energetic and emotional national debate, what we need to remember is there's lots of definitions of success, particularly for women. and if for a woman and

definition of success can be i want to be the ceo of a multinational, for another it will be i want to have a fulfilling career and spend sometime with the kids. and for another, i want to start up a company. there's not one path and there's not one answer to can you think we need to, the smart, smart companies will increasingly embrace the fact that there's not one answer. and really work to not only move women through the different levels of seniority, but also recognize that there are many women, and men, the lack of flexibility without shame. and carve their own path spent before i jump to alexa, whose story is also amazing, quitting harvard, starting four years ago an amazing held at launch, i want to ask one question of what the finance and where this may become an important, because you've been a very, very big critic of how, of the under regulation and the derelict regulation of the banking sector. it's interesting to see such a problem business person like

yourself in a sense looking into the derivatives market, looking into aries, looking at the disparities between regulation, international and what's happening here. and i get the sense from just reading this that you keep talking about arenas that big bankers don't want to talk about because it may be where they see profit in the regulars not looking. and so i can understand why you make people to some degree nervous. it is at these old boys networks that remain largely in place that is some degree are inhibiting a healthy banking and financial system globally? so turn it around, our defaults, are the bubbles, are the fragility in the system in part related to a kind of nepotism if you will between and? >> yeah, so the we've introduced the topic, we could talk about this for hours and hours and days and days. what i would observe is that in my entire time in financial

services i never declined call, i never sending where they would say we will rip people off. i was having be where anybody said well, the subprime thing, i've got together, we're going to ride this and then we let everybody crashed. that never happened that i saw. what i did observe, which i think is important this concept is you have a lot of people who grew up together, breathing the same air, talking the same way, thinking the same way. >> you grew up with stephen colbert spent i did, in fact. fund that, he dated my cousin for your to my daughter resilient matter and said what were you thinking to break up with stephen colbert? but that's a side point spend and you help fund raise for his sister. >> i did. the practice would financial services point, which is one of, my background is as research and is in the business leader with an industry, and one of the things as a research analyst you

learn is facts can be very stubborn things and you need to look at them, except them, and speak the truth about them, what you did when i was inside banks and outside the banks. i think the real challenge that we have in the industry today is whether its regulators or senior executives or the media, it's a sort of the same people having the same conversations. and some that we are hoping a different outcome. now, there may be under regulation is very important. the most important of which is not the little details, but do the banks have enough capital. to the banks have enough capital. do you know that today we're looking for, and guiding towards minimum of 3% equity to assets for some of the banks, but let's call it on average 8% to deny the beginning of the 20% it was 50%, right? what is the right amount of capital for these banks to have? to me that's the big picture

important issue because accidents are going to happen. when accidents happen it's a lot easier to absorb and if you're the big capital cushion that if have a very thin capital cushi cushion. >> alexa von tobel is a real disrupter, and if you're interested you quit harvard and you start a financial services firm, if i understand correctly. mostly for women in which he called a 99%. so we've got the 1% superstar. you are the 99% superstar as i understand it. >> she's dewpoint wonders in terms of her talent. >> there you go. and my personal story is you, worked at morgan stanley trading derivatives, so have lots of thoughts on that. went back to harvard business school and open launched learn fast which today is actually one of the very few places in the country can go to get subscription model, trusted financial fund. so learnvest.com kanye can come, sign up for free and use a lot of our tools, or you can action

to pay a small fee like a gym membership and get access to certified financial planner who ascribe your finances and would have give you advice. i started it because i'd gone to the great schools whenever learned a single thing about personal finance but none of us in this room to to get we made about six taken money decisions every day. suffix and passionate about empowering myself but i had a wonderful education, despite working finance knew nothing about personal finance and felt like guess what, this is a big problem but as lehman brothers is going under in 2008 i literally was the same it seems of unemployment what is that companies people having money problems. people overleveraging, credit cards by homes and as result i said this is the right time. so i dropped out in which is very scary can do. we raise the $29 from venture partners and we are headquartered in new york working to make financial planning spitters how many people in your network? >> our company is just under about 80 full-time employees.

we added three yesterday speed is how may people do so? >> we are servicing hundreds of thousands of people. our customers are growing rapidly. adding about 1000-5000 a day on the free side. so yeah, it's been a lot of work over the last four years later to make financial planning consumable for the masses because it's not rocket sides to every single person in the country should have a plan and not having a plan is a really bad financial claim spent if you google sallie krawcheck and you go into her deep past, you read that she was considered to be one of the most ruthless and honest analysts in the business, and that's essentially what propelled you not really up the ladder, you were brought in a very unusual way, sallie, and this is based on research and whatnot, and our two questions. one is how do women make it in the profession? and the other is a broad financial literacy. one of the things if it was happening in institution, i look at the regulatory dereliction

with a large banking, was this kind of structural corruption. these are the big players, and in your arena your meeting a lot of people have financial literacy challenges. so it raises fundamental question of achieving trust that doesn't have much to do with gender. if women are more trust, are you design something look back five years, 10 years, 15 years now and say while now, learnvest was amazing in terms of changing the game when it came to trust in the kind of information? i think a lot of people don't trust what they hear and read. >> i think it's as simple as this. when you go to the doctor they should never get paid to get the shots or sell the drug. you're supposed to go to the doctor and this was due to give you. the financials they should be the same with the you should show up, or selling you injuries and taking a cut on the backend but not being honest about it. so for me it's not men, it's not win, it's structurally our plans are set up, they make money just to give advice but they don't

get paid to sell products but it should be like oil and water. the financial world has change. tim aitman will give up lots and lots of money. and make money to sell products but as a result some we don't learn about money and schools across the country, people are really ill-equipped to walk into those conversations. that's why the trust very is so high. you know you don't know that much. >> did you start your company because you didn't want to go through the ladder climbing bit in a large firm? sallie, i want to ask you that because you didn't climb the ladder in these companies either. you came in as kind of, you know, a guy from atlantis, right? >> goddess. [laughter] >> oh, goddess. goddess. >> go ahead, alexa. >> i was raised i wish i could take credit for being as bright as figuring out my career at age 24. it was not that way at all. i was extraordinary passionate about this problem that seemed massive and it seems like it wasn't a rocket science id to every single person in the

country should get access to trusted device we are not selling them anything. it was as simple as that. the company has grown rapidly and with lots of people, and we want lots of awards. so i think we're on a path to do something were successful, but i wake up every morning feeling like with a lot more to do so i didn't have the outset of digging out my whole career. i was usually passionate about this problem. >> sallie, how do you feel about your advancement? not only was looking at other women and where they go in the financial sector. neither one of you are traditional in the wake of the think many guys go up the ladder inside a financial services firm. firm. >> i can say with almost absolute certainty that if i had started my first really big job was running smith barney come and i'd say with certainty if i started at the bottom of the as a trainee i never would've made to the topic and it would've made it to the top, one comment and this is sort of the old wall street, is that the into the process they use, the question

of the many of branch managers was from the marine corps. and in order, so you have to make it in. and women, financial advisers tend to be very successful but more slowly than in financial advisers. so the industry takes them out before their successful because they are forming these deep relationships. in order to be successful in the way the business works is to get your first promotion com from yo to be the number four manager in a big branch in new york or cincinnati, whatever, then you go to be the number one manage and a really small branch, and then the number one manager in a medium-size branch, and then regional director, and so you know, i'm sure there are lots of wonderful husband out there who would move six and seven and eight times like any number of wonderful wives. but my husband doesn't happen to be one of those. nor would my children, frankly ever stand for the. and so that path just let's call

a spade a spade, was not conducive to getting to the topic on the women at the top was a single woman who made those types of sacrifices. the challenge about changing that is that when you're making billions of dollars can we can all read the great books about create destruction and change in keeping form, but i'll tell you, having run larger compass when you're making a boatload of money, you know, you can put it off into next week, or the week after. and that's why i loved what alexa and i when i complete agree on financial advisers because i think there are lot of enormously terrific without ago i think the whole into should move to a fiduciary standard so that the whole industry is raised up him and i'm hopeful that we will see action out of our regulators for that. but that what announcing on these young women, and there seems to be a break somewhere in the mid '30s where there's just a sense of this entrepreneurialism and open

environment. and i've really enjoyed in the past year spending time with alexa and her cohort of young women entrepreneurs. i've learned more in the past year from these guys than i learned for the couple just that i was at bank of america. it's really phenomenal what these young people and ladies are encompassing. when using and a large bank like the victim here also arrested and is just enormous, part of the theme of this conference is innovation and destruction. do you sense, does the bank have ways of thinking about innovating or does it essentially protecting assets? you see something like alex is doing to my soon as a blogger was having, bloggers can log in first there disregarded, then ripped off and then bought by large media companies. to some degree is that essentially how, in large institutions integrate? >> it's an excellent question. i would put forth so that we can

be controversial and have the discussion that most of the innovation that occurred at the large financial institutions through the past cycle, the institutional trading, instruments, the cdo-squared, et cetera were increased risk, not innovation, that was wrapped in complexity that row the volatility. and everybody thought look, it's innovation, its growth. we talk about innovative, we talk about -- it's been a while, part of it i can tell you since i was chief financial officer, you have people come with their investment plan and part of the issue was you could make money like that on an institutional product, but if you were innovating on the consumer side, because of the constructs of

industry it was a difficult to pull consumers from another bank, so the returns on innovation on the consumer side were much, much, much much slower in coming. >> alexa, how do you see the innovation challenge for self? you are on iphones that there is an african good app store and get? >> so, plan some, learnvest has made a frito called our money where you can link your against it and you could see your entire financial life in one place. we made this a frito per hour average user on the web logs in about 25 times a month on the mobile app, about 2.4 times a day. it has almost a five star rating. so we are really proud of it. and then what innovative is for us, if you need advice, or financial expert if he said upgrade connection you to what's happening with human right then and there. you don't have to print out documents are one thing we're

focused on was one huge mission to make fine has been a lot of financially that happens off-line in my mind is very archaic. i say that respectfully but it is. you print out documents can you do see your plan, they charge you $3000 for the about on average. what i don't know but you guys but i would not be willing to pay $3000 for a financial plan that seems extremist the. it also -- we simply said let's use a free tool, let the user organization in july and one of questions with the always will, you want to talk to an expert. let's make it seamless, affordable. it's more like 250, $500 for the year as opposed to 3000 so for us we wake up every morning just trying to think about the consumer. we, i'm consumer one. i wish it existed for me. that's what my passion and my commitment lies to our pricing undertaking and innovation is.

is. if i did and you then we shouldn't build for anyone else but that's all we ended for is for the customer and on the side of the customer. >> so one thing that alexa has really focused in on which may not feel like an innovation that is important to him which is a female customer, the female investor. one of the industry publications, one of the industry rags as we call them for the wealth management industry recently did a series of a piece on niche market for financial advisors is does anyone want to guess what one of those was? women. women. niche market, right? half of the population, 60% of college attendees, starting new businesses at a great in the rate than men. it's unbelievable. and actually want to hear from women who interact and engage with the traditional wealth managers is that while they may be in a meeting, typically as men talking to men and nodding to the woman.

that's part of the challenge is that the traditional wealth management industry, has about 60, 70% of their advisors as women. and so it really is men with men. and they think they're getting a whole family, but when the husband dies and the guy dies first, right, that just happens. >> thank you for looking at me with concern. [laughter] >> the guy dies first is that the women typically does on average does not keep her money with a financial advisor on average. she leaves because she is like she was nestled engage and she would've liked. >> we have 40 seconds but let me ask you both very quickly, if the tilt was the other direction and enjoyed many more women in the boardroom, many more ceos, just much more embedded to the system, with the financial performance come with a stakeholder site is society really different? we were talking if women ran the world what would be different. such as snapshot of agassi that.

>> i would say should be the best person. men, women, as a young person i never saw my -- >> are you saying that to be politically correct? >> no. i never saw myself as a young funeral entrepreneur. i saw myself as an entrepreneur work as hard as possible. as result i want to be the smarts and best person for the job. >> i'm going to in my slightest bring with you. i think it should be the best team. think about a basketball team, right? if all five members are raymond felton, jimmy black, kendall marshall, you know, i'm naming point guards, right? they could be the best players but they won't be the best team. and research and i don't know what would've happened if there had been more women are diverse individuals. research shows that more diverse teams, not only outperform on most metrics, teams, i'm diverse teams, they outperform more

capable teams do and so what i would say is if we look at the research, i think it stands that we would've had a more prosperous economy. >> ladies and gentlemen, please thank alexa von tobel of learnvest, and sallie krawcheck, for a very informed session or i should send as my colleague can we had the atlantic lead group and in our group i think we've got 25 women and one other guy. i think if there were 25 guys, it would be a disaster. so thank you very much. ..