>> caller: hello. i think there is a pattern in this election cycle with all of these tea partiers running against the incumbent republicans and i think they appear to have not such a good margin like lindsey graham and mitch mcconnell and such as that cochran. i think they don't really do that well on the national platform if they campaign that well. >> valparaiso indiana next up on our democrat line. >> caller: my question is what do you think that cochran -- would you think that cochran will pass away. you think you will live that long? >> he has served six terms in the senate and is on his way to winning the seventh in the runoff against chris mcdonnell -- chris mcdaniel.

what did you think about the race? >> with meat make a couple of comments. when you take the mississippi race is someone who considers themselves a conservative voter who lives in louisiana and growth in mississippi when you take that race in colorado and mississippi is easy to be disheartened. ..

i am actually hardened with the republican party being able to stand up against the establishment and believe that if we committed to our cause in the long run we will rent. i appreciate you taking my call. >> host: the last word for this evening.

thank you for your calls. you can continue the conversation at facebook.com/booktv. in fact, tomorrow morning, of course, washington journal at 7:00 a.m. eastern. we will be airing results of all night long at c-span.org, all of the major primaries this evening eight primaries or ross across the country, and all of those results available to you at c-span.org. we will also show you again the comments throughout the evening including the comments by charlie rangel in new york city that you saw some of on c-span2 here. next the very brief comments by thad cochran tonight. [applause] >> thank you. thank you very much. thank you. they keep. thanks you very much. thanks you, congressman. thank you all for being here to

help celebrate a great victory. [applause] it has been a real pleasure working closely with so many of you making appearances and towns all across mississippi, being in church services with gregory carper, sending meetings that were important to talk about the future of our state and what we have tonight is as effective as a consensus from more and better jobs for the mississippi worker. [applause] a military force, and the capacity to defend the security interest of the united states of america.

those were our principles, planks in the platform for the campaign, but you were the ones who helped reach all of the voters, make sure that we knew that they were important to this election because it is a group effort. it is not a solo. and so we all have our right to be proud of our state tonight. [applause] thank you very much. [applause] the wonderful honor and challenge that lies ahead. thank you. [applause] [applause] [inaudible conversations]

[applause] [applause] [applause] >> a wonderful friend. [applause] [applause] [inaudible conversations] ♪ >> mississippi centers later than they expected speaking to supporters earlier in jackson, mississippi, the state capital. winning that run off tonight against state -- state senator

chris mcdaniel. again, the final results 51% for senators thad cochran, 49 percent for senator chris mcdaniel, who with them at a half hour or so of that conference spoke to his supporters, came out to them in hattiesburg, mississippi. here is stage center chris mcdaniel begin to that group. [applause] [inaudible conversations] >> don't give up. [applause] >> all right. thank you. let me say this.

let me just say this. we thought. we have a dream. the dream is still with us. [applause] for too long we have stood by and watched straits things happen. for too long conservatives have needed a voice, someone to stand for them, someone to fight for them. you are that voice. you or that voice. the party i was born with, the party are join pereira was 13 years old was the party of a man , a former actor from californian named ronald reagan. [applause] one afternoon my father said, listen. you've got to watch this and see what this man is saying. and there in that tv was his former actor from california,

and he looked dreaded me, he looked at my father, but he was really speaking to an entire nation. he said things to us that intuitively made sense. he talked about liberty and freedom. balance budgets. traditional values and personal responsibilities. my father looked at me and says, well, son, we must be republicans. and, indeed, we were and are. that is the party as joint. that is the party have always been a part of my party of principle at one point, party of courage at one point. it was reagan that said, we will be a party of bold colors, about pastels. and, yes, there are millions of people that feel like strangers in their own party. [applause]

[applause] to it appears that different wings have not yet come to a conclusion. there is nothing dangerous or extreme of wanted to balance the budget. [applause] there was nothing dangerous are extreme about defending the constitution and the civil liberties there and. and they're is nothing strange at all about spending, as people of faith, for a country that we built that we believe that. [applause] there is something a bit strange , there is something a

bit unusual about a republican primary that has been decided by liberal democrats. [applause] [applause] so much for bold colors. so much for principle. i guess they can take some consolation in the fact that they did something tonight. i wanted -- but once again compromising, reaching across to far reaching across the aisle, once again abandon the conservative movement. [applause] i would like to know which part of that strategy today our republican friends are for. i would like to know which part of the strategies today are

statewide officials and doors. [applause] it is not the party of reagan. >> no. [applause] >> but we are not done fighting. [applause] we have fought too long and too hard to have a voice in this party. and today the conservative movement took a back seat to liberal democrats in the city mississippi. >> if it can happen here, it can happen anywhere, and that is why we will never stop fighting. [applause]

>> the people of this state are the most incredible, loving to hospital people i have ever been around. the honor of my life. this was a fight we needed to have come of fight that had to happen for the very reasons that you saw tonight, for the very reasons you saw tonight. we will find out back born-again. we will find the pontian tough conservatives again. we will force our party defined that as well. i want to thank you for being there with me. i wanted thank you for standing with me. they have called me everything in the book. millions of dollars to character assassinate or of their own.

or so it seemed, or so it seemed and that is okay. that is. that is okay. i am still standing. i am still standing. [applause] we live in the greatest country in the history of the world. there's no question about that. it is an oasis amid of bubblers' that we conservatives have responsibility to keep that way. we are going to stand for those early principles, our founders, the lessons of reagan, even sometimes when it is difficult and it comes within our party. we were right tonight. we were right tonight. [applause]

so thank you. as you know today, folks, there were literally dozens if irregularities reported norcross the state, and you know why. you read the story. you are familiar with the problems that we have. now it is our job. now it is our job to make sure that the sanctity of the vote is up health. before this race ends we have to be absolutely certain that the republican primary was won by republican voters. [applause]

and so we will stand with courage. we will stand with judgment. real sense of integrity, and we will stand with dedication. this is not uprighted. it is necessary for years. it is necessary alone caboclo we are not prone to surrender. [applause] -- a strong and sturdy people we are, of brave people we are, a people that still can lead the conservative revival in this country and will leave their resurgence. that begins right here in mississippi. god bless you all off. this has been a great night. thank you for being here.

he will see you soon. [applause] [applause] [applause] ♪ [inaudible conversations] [inaudible conversations] >> coming up congressman henry

quasar of taxes on the circumstances driving unaccompanied immigrant children across the u.s. border. >> now you can keep in touch with current events from the nation's capital using any phone any time with c-span radio. every weekday listen to a recap of the day's events at 5:00 p.m. eastern. you can also hear audio of the five networks' sunday public affairs programs beginning

sunday at noon eastern. c-span radio. with. >> treasury secretary at a hearing of the house financial services committee to present the annual report of the financial stability oversight council. that is a board created in 2010 by the dodd-frank law that is tasked with making sure that firms do not take excessive risks that could threaten the economy. the secretary also answers questions about missing irs e-mails. [inaudible conversations]

>> the committee will come to order. without objection that chair is authorized to declare a recess at anytime. the purpose of receiving the annual report of the finest ability oversight council to be presented by the hon. secretary of treasury and chairman of the financial stability riverside council. and i recognize myself for five mess to develop a statement. again this morning we woke back the secretary to discuss fsoc, but before we do i would be remiss if we did not bring up the continuing scandal at the internal rates it -- revenue service. thirteen months ago you appeared before us and said, my eyes party is to restore confidence in the irs. i think we know that that has not yet occurred. back then president obama's said of the irs scandal the misconduct is inexcusable and

american civil right to be angry about it. the administration would cooperate to uncover the truth. as was his said. regrettably that is not as happened. we learned that the administration learned that years worth of eight e-mails -- eight years of the males of employees at the epicenter of the scandal of simply vanished. out terribly convenient for the administration and inconvenient for the american people expect equal protection under the law. the american people regrettably understand we're becoming increasingly cynical and fearful of their government. they're is a growth and resentment of once a levels for washington and another several for everyone else. no one believes is simply saying , sorry, i lost my e-mails is an excuse crs would accept from a taxpayer. i trust you agree that the

american people deserve better. it is past time for openness and transparency from this administration on what he told the story 13 months ago lazar has priority. it is also passed on for openness and transparency of fsoc while you and other administration and officials habitually said the reported dangers of prince stability posed by the shadow banking system and ignore those presented by the shutter regulatory system of which fsoc is front and center. with the exception of affirmation related set national-security fsoc may wear well be that nation's least transparent entity. when the minutes are produced on average they weigh in at the mere five pages long with half of those devoted to one memorializing names and

resolutions considered. better markets a public interest group that consistently advocate for more regulation of our financial sector have stated the proceedings make the politburo look open by comparison. no one knows who they are, and the few open meetings they have, they snap their fingers and it is over when they are all scripted. they treat the information as if it were state secrets. to begin to remedy this situation is one of the reses committee has ordered h.r. 4337, envy fsoc transparency in the capital of the act favorably reported to the house. the reason this is so important is because fsoc can designate practically any large financial firm in our nation as a systemically important financial institution and thus render effective control over. as it has the ability to render

great damage to our economy and set back the dreams of tens of millions of unemployed and underemployed americans counting on capital markets to work for them. recently the former director of the cbo estimated that designating asset managers could close investors as much as 25% of the return on their investment over the long term to allow approximately $108,000 per investor. in other words, it operates in the shadows, fsoc could take away seed capital of the circle of small-business worsen the current child to college which is both unfair and unwise. while fsoc seems dead set on trying to find systemic risk where no one else seems to another view of their latest report indicates that it is willingly, willfully blind to the largest sources of risk,

hardly any mention of fannie mae or freddie mac and without the lead of the administration to and permit a taxpayer subsidies they're certain to be at the center of the next financial crisis. no mention of the five or government itself, $17 trillion in debt and growing, more debt incurred under this the ministration incarnation -- that our nation's first 200 years with offices awash with cbo and independent reports saying the pace of spending is unsustainable but rather than rein in government spending the administration rick returns a blind eye and best friend steve allow a default on our sovereign debt. this committee has passed h.r. 481 to place a one-year moratorium on further designation. again, i would call on fsoc to cease and desist.

answers to prop -- and answers to questions. >> thank you very much, mr. mr. chairman. i am very pleased. i welcome you back. i assure you that opening up to start brought the irs has been done, we do not have documents, information relative to that issue. we gather here today to receive your report of the financial stability oversight. to be honest el surprised to see so many of my colleagues and the assault of the aisle given that

the fsoc has joined the ranks of the consumer from as a protection bureau, export import bank in becoming the latest targets in their relentless republican effort to tear down important issues. added not think that my colleagues and the other side of the al would have any interest in hearing about the progress or the financial stability of the united states. in fact, this last week this committee approved suggestions that of the guise of transparency would compromise the fsoc endeavor of the importance of those roles. these partisan bills were nothing more than an effort to derail this act. mr. chairman, the economic collapse of 2008 resulted in the

greatest loss of wealth and accumulation starting with the bankruptcy of lehman brothers our economy quickly ground to a halt leaving american taxpayers to clean up the mess. all told 25 as a crisis resulted in the destruction of more than $9 trillion of wealth and costs each american household approximately $30,000. unemployment exploded throughout the country. one problem leading up to the crisis was no one in the private sector or government saw the big picture or had the responsibility to deal with the threats. that is why it digress created the financial stability oversight council, that is fsoc, to fill that void and serve as an advanced warning system to identify and address system the chris posed by large, complex companies.

in plain english fsoc is charged with looking at every aspect, something that did not happen in the lead up to the crisis. the council's work is critical to ensuring that our financial regulators are working collaborative lee to identify and respond to emerging threats to financial stability. it remains a mystery to me why republicans are sending the few legislative days we have left in the session pushing partisan legislation that would hamstring the fsoc ability to protect homeowners, consumers to man the american economy. republicans' goals are to stop the press from the support and work, even if that means ending the protection of the american people on our economy. i look towards your insight on

areas of systemic risk. the council has identified alternatives reference rates. as we hear additional details from you about the risks identified, i will be interested to hear or their relatives believe fsoc should take action to many risks. finally, i am looking forward to hearing more from me about how we address concerns that i and other members of congress have raised regarding a transparency of the fsoc designation process. i am sympathetic to concerns and of like to hear what steps you have taken and your suggestions on how to increase transparency in a way that continues to carryout the fsoc mission. @booktv ..

was one of the keys of the dodd frank financial reform and provides a forum for all of our financial regulators to come together to discuss the risks they see in the markets they regulate it from a broader

perspective on the from the systemic perspective it also requires them to publish an annual report that describes in detail the threats they see in the financial markets and this is tremendously important. it depends what reports you look at. the ranking members of the 9 trillion some say that we suffered a 16 to $18 trillion lost to our economy. christina testified before the congress and the economic shocks we experienced in the last recession was three times greater than the great depression and we manage this better but economists have testified before this panel and others that it was the only financial crisis in our history that could have been prevented by better financial market overview and regulation. we didn't keep up with the new products and trends so fsoc was

created to help us prevent another serious damaging, painful economic loss we could have prevented with better financial management. i look forward to hearing the report. >> the chair recognizes the gentleman from new jersey the chairman of the capital market subcommittee for two minutes. >> fsoc has become a sort of super regulator who is effectively an implicit taxpayer guaranteed. they will use their capital competitors in winners and losers in the markets. we have more and more sectors of the economy and insurance companies and asset managers. they owe the american people an explanation for what they are doing. despite the 147 page fsoc report the majority of which is of

basic economic information available in any website. the decision-making process remained a black box. they are directly affected by fsoc have little idea why fsoc makes the decisions it does. as congressman i can be briefed on the most sensitive intelligence in the national security but i'm not allowed to even sit quietly and listen in on the meeting. companies that are designated have only been paid to come the -- the vague knowledge so they can do nothing to reduce their own systemic risk. when republican members ask questions they have been designed to give the responsiveness without actually ever answering any of our questions, mr. secretary. in fact the committee asked you specifically for all of the

documents and communications between you com, your departmend fsb and i have everything that you supplied us with right here in this box in response to your promise to supply us with all of those documents. we got absolutely nothing from you when you promised us he would supply us with that information. the stonewalling by you and the department must stop. we have to get answers from you and treasury and i hope today the process begins. >> the chair man recognizes the gentleman from colorado for a minute and a half. >> mr. secretary it's good to see you. i want to thank you and the administration. since the president took over since dodd frank was past the stock market is up 10,000 points. that is 13 joined dollars.

home prices are up and we put 10 million people back to work and i want to thank you for that. we had kind of an age-old debate a few weeks ago mr. scully a sender that they have too much discretion. we had members of the banking community saying there was too little discretion and arbitrary lines of demarcation within the bill. i have two areas i would like you to talk about today. one is the living wills. what you're doing on the major institutions to find if they fall apart how you're going to take them apart, and second, i want you to talk about the gse. i'm one of those that thinks with proper underwriting the gse's work very well and the the markets will come and go as they think they can make money in mortgages. there isn't a lot that has to be done with respect to the gse so

i would like to talk about the willing will -- living will. with that i will yield back. >> the gentle man jokes about his ties. the honorable secretary of the department of treasury. secretary testified before our committee on a number of occasions. so i trust he needs no further introduction. the secretary's written statement will be included in the record. mr. secretary u. are recognized for your presentation. thank you. >> thank you mr. chairman, ranking member -- >> you have to speak into the microphone a little more. >> can you hear me now >> yes, much better. >> ranking members of the committee, thank you for the opportunity to testify today on the financial stability oversight council of 2014 annual report. nearly four years ago, president obama signed into law the dodd frank reform in the consumer protection act creating the

strongest safeguards for investors is the aftermath of the great depression. as everyone here recognizes a stable trading financial sector is critical to our economic growth and prosperity and that's why in these historic safeguards were established. today our financial system is more resilient, confident in the market and is robust and the agency is charged with protecting consumers and investors and we are in strong position to emerge to threats that could harm the economy, damage to main street businesses and jobs. one of the lessons from the financial crisis was recognizing how important it is to detect and mitigate risks and financial stability. in the lead up to the crisis the regulators focused on individual institutions, functions or markets. markets. the site load approach allows risks to fall through the cracks. congress changed that by creating the financial oversight council. now regulators are obligated by statute to collectively monitor the stability of the entire u.s.

financial system to look over the horizon to identify potential risks and respond to threats that have been detected. in short the council has worked to detect risks not only mandated by the law but the sound economic policy. that's why i vote on the history that some have suggested curtailing the council's ability to analyze information regarding particular financial sectors, firms worsectorsconfirms work d. the council cannot simply part of of any sector or activity that could pose a threat. there would be the responsibilities that complete disregard for the very purpose of the council. some have gone so far as to suggest th the council should be prohibited from asking questions about certain activities or companies that could threaten stability. we have to be able to ask questions. everyone here knows during the run-up to the crisis regulators should have asked questions about institutions and activities, not fewer. to be clear asking questions does not equal regulatory action. sometimes questions resulted in ththeconclusion that council dot

need to act that needs to examine the issue. without a predetermined outcome in the theme of the council's procedures are transparent. this elicits all of the points of view. in fact the council has the commitment to transparency and collaboration. it reflects the collective analysis and conclusions of councils to the financial stability and an important example of how the council's shares information about its work to congress at th that the public. each report also provides a roadmap that areas that will focus on and what areas likely require additional attention and how the council expects to address the.

cyber security threats from risk-taking by large financial institutions. before closing let me point out that the council's last annual report we have reached a number of milestones in the financial reform implementation. that means that the home buyers, retirees have better protections. to that end, the rule has been finalized. qualified mortgage standards have gone into effect. capital standards are now in place. over-the-counter aover-the-coune now moving onto electronic trading platforms into centralized clearing. wind have been opposed on the actions related to manipulations of other financial benchmarks. the international community is making progress on increasing the stability of the global financial system. mr. trinh and i want to thank the members of the council and all the staff involved in the

2014 annual report for their tireless work and commitment. as the council fulfilled its obligations to strengthen the financial system and limit risks to the economy we will continue to work with you and the committee of congress to make progress for all americans. thank you and i look forward to answering your questions. >> the chair now recognizes himself for questions. i would like to start off with a matter that i left off with during the last appearance. i will certainly be fair and give you a brief moment to give it some context. the g. 20 which the treasury is a plenary member designated three insurers. did they support these designations coming yes or no. >> last time i testified, they operate by consensus and the u.s. participants joined into the consensus at the time.

>> said they were in the designation, correct? >> we joined in the consensus. we were part of the consensus. but i really need to make the point quite clearly that action are very different matters. it's not a national authority and it doesn't designate institutions in a way that has a legal effect, and fsoc it makest makes its determination does it on a parallel path. they may ask questions in a similar way -- >> mr. secretary, can a financial institution pose, in your mind, a systemic risk to the global economy without representing a systemic risk to our domestic economy? >> i think the question of designation is a moment of time based on the analysis at hand. in the case of a designation of a specific institution the

process of fsoc go through a very detailed -- >> it may be different processes, but i'm asking if in the treasury's opinion if one is a threat a potential systemic threats to the global economy must be necessarily also be a systemic risk to the domestic economy. >> making a determination at the level is based on the information and analysis you have at that point. what you go through in the determination process is a very detailed exchange of information with the company -- >> so you're telling me that the different processes are two different answers. >> so you're telling me that it could support a designation of the exact same firm and systemically risking to the global economy but not to the systemically risky -- >> it doesn't designate in the same way.

the only national authority to designate the company for regulation -- >> my time is limited. i think you know that bloomberg reported when the chairman fsoc that they wanted to release the office of financial racers did a good research that has been widely panned, bloomberg reported that he personally called the chair to express your displeasure. is that story accurate? >> i'm not going to get into the details of the private conversation that i may have had with other members. >> did you favor or oppose releasing the state to the public? >> the public was going to be commenting on it. it would be a formal way of asking for an agency as a

different question. >> showed it to be immune from public comment? >> of the report was meant to be public and it was at a public debate. so i very much believe that it should have been public and the only way is should it be put off by one or another agency in a formal way. >> you said it is unacceptable to be any place where too big to fail hasn't been ended. if we get to the end of this year cannot put an honest straight face say that we have ended too big to fail. we have to look at other optio options. your predecessor -- his answer is yes of course it does. using your words, can you tell the committee today with an

honest straight face that we have on debate ended too big to fail? >> i'm not sure that we will know until we have the next financial crisis. that is the challenge that we all have in asking have we gone far enough. but we have gone far enough away to look at areas we can have more protection for things like supplemental -- >> we have heard from multiple witnesses that it would reduce liquidity in the corporate bond market by the financial times has reported that they are very concerned about the potential large-scale withdrawal for investors and managers in corporate funds. they are concerned about the illiquidity of the corporate bond market so it strikes me as somewhat ironic that the board ruled that has been touted by you and others as necessary to ensure financial stability may now be a part of financial instability. the committee has requested information from the treasury

and fsoc regarding the status of the corporate bond markets. we haven't received anything as of yet so have they conducte con an analysis of the systemic risk that can result in the liquidity in the corporate bond market? >> we are in the early months after the final rule that is final. it hasn't taken effect in the marketplace yet so it is premature to judge its impact on the market. i think it is actually quite an accomplishment. they published an identical rule on the same day providing clarity in an area that needed clarity so that it wouldn't be uncertainty in the industry. i've received quite above comment. >> the time of the chairman has expired. >> thank you very much. some have criticized the fsoc designation process as being a

take. would you please describe how fsoc has addressed these recommendations and also describe how they change their transparency and is the fsoc appropriately balancing the need for transparency against the need to protect sensitive markets and supervisory information? this is an issue i would like to get behind us and deal with it in ways that would allow them to do their work. so i'm hoping that you have not only given considerable thought to this but to help us understand how we can better make sure that you can carry out our mission and not have those that you are regulating and giving oversight to be leaving you are trying to do this in secret. and i don't want to spend all of

my time on this because i do want to get to the servicing so would you respond to the first part of the question? >> ththe values of openness and transparency are input into allo all of us. we have constructed a process in fsoc and it gives an enormous opportunity in the designation process to engage without making the public that wouldn't be appropriate to be a public discussion. much of the discussion in the designation process involves reviewing the internal information that is the kind of supervisor information to regulators work with. when we get to the final stage of the designation process that is a backend for that is the luminous with the companies and with the companies sharing proprietary information that gets to the essence of their

business. so i think what we need to balance is what is a process that requires a certain amount of confidentiality with transparency. we made some changes and it is a young organization continuing to evolve where we are noticing advanced topics and putting out minutes of meetings and notes for meetings afterwards. but i don't think the answer is to say that it should be completely open public discussion or the inquiry would be untimely. >> i would like to ask you to make sure that the staff gets with the staff of this committee and i would hope that the chairman would agree so that you could walk through whatever changes you have made in order to have more transparency. we need to understand that. because, you know, as you know what hr 4387, this bill would

subject fsoc to the sunshine act and change voting for the calls for the commission and board members and members of congress to attend and participate. i think this is ridiculous and i want to get off of that so if you would help us to understand then hopefully we can engage with you about what you have done and maybe have some suggestions with you. do you have a moment to talk about what you have done on the mortgage services? >> the question of the mortgage service is an important one. as they move out of the banks into the more independent businesses that challenge is how to maintain consumer protections and oversight and mike scheuer that the very important backbone to the mortgage financial systems function well. they have taken on the role of

the consumer protection oversight in a very important way and it is an area that we have to continue to look at and understand. if we need to take more action and discuss what that is, obviously the mortgage system requires that there are services that are reliable and they are o handle the transactions between the borrower and the holder of the mortgage and it is something that we cannot have fragile. it's something we are very much watching everything the actions taken are very positive ones and we will continue to review the situations. >> one of the things that we discovered a lot of the problems are with the servicers. the lack of understanding of what their jobs were committee and ability to make determinations about whether or not people have sufficient

income to meet the proposed modification on and on and on. >> the chair recognizes the gentleman from new jersey. >> mr. secretary as you know the chairman and other members of the panel and myself have asked for specific documents and we did so over a month ago and you assured us that you would provide them. you responded last friday with a non- response. it contained none of the requested documents. this committee has to subpoena the documents. can you promise us here today any e-mails that make u up the documents or files that we have requested will not fall victim to any mysterious hard drive crash and are you doing anything now to protect those documents that we have requested and do you promise that you will supply that after a month you still

have not done so. despite i did respond to the chairman of the fcc and the federal board and in that letter we sent our staff would work together. >> will you protect those documents because you didn't provide any documents that we requested. >> our staff will work with your staff. >> are you protecting those documents? >> we routinely protect our documents. >> is it a better routine then they have? i would suggest we consider issuing them sooner rather than later given how fast e-mails are disappearing in the department. i have a question from home and this is a bit off-topic. but if they are conducting an audit of a law-abiding citizen i get this a lot over the last

several weeks. they do not come and they say they do not have them anymore because their hard drive crashed. in your response that would be that's okay because that's what the routine system -- cynic as the commissioner testified last week if that happens to a taxpayer, the practice is to work with the taxpayer based on documents available -- cynic i will take that that we are going to be working with you and we issue the subpoena now because you have not supplied that information that was promised to the committee. i don't have any confidence in hithis administration being able to conduct a thorough investigation to that matter or supply the information of the committee that has been requested repeatedly. i believe a special prosecutor should be appointed to find the truth to what happened there and for us to go forward as quickly as possible.

to turn to the matter at hand on the designation is the chairman asked you a simple question with regards to the consensus. most people watching understand what this means. it means the parties at the table consent to something. that is the word root of consensus. so in that process is question was do you consent. did you say whethe see whether t around the table did consent or say yes or no or i really don't know what to answer? >> the u.s. government represents and joined in on the consensus. >> that you said yes? >> i answered the question. >> when you made the determination to chairman asked the question is it possible for a company to be globally designated, but not to be

designated by nationally and that is also yes. >> i said they are parallel and it is a national authority that would make it a determination in based on the process conducted. >> so a company could be globally important but not here in the united states. how is that possible? >> the process of the designation is one that isn't binding on the national authority. >> it's not a matter of binding but whether the company is actually systemically important. >> that's the reason the fsoc goes through the detailed analysis. >> does that mean the process isn't a detailed analysis? >> i'm not saying it's not a detailed analysis or the outcome of the difference. i'm just saying there is a parallel national process. >> so in a legal matter when the judge has made decision in one

case but often times has to re- queuequeues itselfqueues of sels are involved with the same issues come up and lawyers have to do that what you read cues your self in the deliberation process when they come upon a different piece is? even though they are different processes? >> we have to review all of the information to make a decision based on the information presented in the process which is what i will do. >> i will do my job and reveal all of the documents in and out with us and we will make a decision based on that. >> the chair now recognizes the gentleman from massachusetts the ranking member of the house insurance as a committee. >> thank you mr. chairman. i'm tempted to talk about the batting averages but i will wait another day for that. that's my biggest concern right now to be perfectly honest with you. i do want to talk about a couple concerns. i want to thank you for the job you've done. but like everything else, there are details that have to be

worked out. i have a lot of constituents are concerned about things that haven't happened yet. i have my concerned about some of the things that have not yet a -- the second shoe hasn't dropped. and i want to talk about the national association of supervisors of which you are participating and i got a response in a letter that we have written and i want to read a section of that and put a letter on the record. talking of the capital standards being developed by the ias. and the responses being developed by internet experts will not have any legal effect in the united states unless they are implemented by u.s. regulators in accordance with the u

into talking about how important our involvement in the international body is. we could do an outstanding job in the united states putting a system in place that is safe and sound for all of our financial institutions and we are so exposed vulnerabilities around the world in a standard that isn't raised as well, so we simultaneously participate in international discussions. discussions. but in the case like this our insurance experts are very much a part of shaping the international debate. >> as i think you should. i think you should be at the

table and i think you should participate and you should have a strong voice. i just don't have paid at the moment. i may have been a future time at the international standard is going to be any better than we can do. >> the participation on the process leads to the result that reflects our judgment on what the outcome is. we maintain in the international authority -- >> fair enough. >> it is the states that have a lot of authority. >> on the crest of the number one, i want things straightforward. i even fsoc and i believe in what you're doing. i.e. the belief that it is coming but i don't want to find out the day after that somehow through the backdoor we gave our entire system of insurance regulation without knowing about it. if we do it i think we need to do that conscientiously and i don't want to find out a treaty did it and find out that somehow because somebody had a better idea and how the now they run or insurance industry. i don't expect that that's going to happen but -- >> that is not the way it works. >> you also talk about transparency.

and as far as i am concerned -- one second. i also want to find out that under dodd frank come as i understand it, the fed and others have oversight on insurance companies that are sifis or others. other insurance companies are not subject to federal regulation and i just want to make sure that it i isn't some backdoor way to expand your expectation. although i do believe that the chargers will come someday. they are not there yet but i want to make sure we are trying to do that. >> it isn't any kind of a backdoor into the federal regulation of insurance. but there is a debate to be had. that has to be done directly if it is done. >> i also want to talk a little bit about transparency. you agree that it is transparent. and until now there has been giving to take. you are transparent and then you are not transparent. one of the things that comes to

two sifis is doing the potential sifis know what the measurements are. my understanding is like a traffic cop. if a traffic cop is sitting on the highways i want the blue lights to be flushing because i'm not interested in catching someone going 3 miles of earth the speed limit. i want to catch them at the speed limit and let them know there is a cop on the highway. and the same thing here. i'm not interested in catching someone into a sifis. if they want to avoid it and they can avoid it, they told him he was the measurements that we are going to have if you choose not to participate in these measurements between now and six months from now you can take action to avoid it. why is that not possible? >> brief answer, mr. secretary. >> the standards that aren't used or actually understood. we put out details. we have rules early on in the process. when it gets to the point of

actually engaging with the company, there is an enormous amount of give and take back and forth, which gives them the ability to make a judgment how they want to organize. >> we will have to follow up with that. >> the chair recognizes the gentle lady from virginia in the financial institutions subcommittee. >> as i mentioned in my opening statement, i believe the process for designating the financial institutions that process should be based on activities in the institution as opposed to just arbitrary cutoff point or for instance the 50 billion-dollar level, then we have another level of $10 billion for the consumer supervision. and what we are finding i think -- anticipated a little bit off of the previous question. if you have these arbitrary deadlines and 50 billion, you could have a financial institution that is maybe at 35 billion that is much riskier

than anybody that is to say at 100 billion because of their business platforms, their business and the way they structure their business with less and fewer risks. i guess what i would ask i and e governor talked about this on the go just threw out $100 billion because the folks falling in those thresholds are having difficulty. how do you feel about that rather than having arbitrary limitations to look at what the risk profiles are at the basis are on that. >> the threshold doesn't lead to the designation automatically. it's only if it suggests there is a risk that determines if it is systemically indifferent. and i think that a number of designations reflect the fact that has been the non have seeng

utilities designated and we have seen to insurance companies designated. it's not been -- to think in the case of the banks they raise a threshold it is -- >> i thought you were talking about the fsoc designation. >> i'm talking about that in conjunction with the other significantly -- >> as far as the banks, the burden certainly was on us to take a look at the systemic risk in the large institutions and as we go through the process and the regulators go through the more detailed reviews of both the financial conditions of the banks and the systemic risks. for the time being, we have to look back and forward. we weren't where we needed to be in 05, 06, 07 and 08.

we need to have a visibility into any of these that can create that kind of systemic risk. and as far as the designations go with the same standard that applies. we are not looking to designate for the sake of designating. we are looking to identify where are there other areas of systemic risk that if we look back at the next financial crisis we would say why didn't you catch that. >> i think in the case of the credential they would argue -- this is a slightly different question -- they would argue if they were to fail the business model would drive down the entire system. what kind of metrics were used for that, and how does that -- what kind of metrics did you used to make the determinations when fsoc had a question about that. >> there were details and analyses done.

>> the kind of questions that you ask when you are looking to make a determination like this don't have to do with what happens if the company fails in good times. it has to do with what happens if there is a financial crisis and the company fails. if it is a situation of great stress in the system. and that isn't necessarily what the regulators previously did. but when we saw what happened in 07 and 08 and a great stress in the financial system, things happened that do not happen in other times and that is the kind of inquiry that we went through. >> on the regulator regulatory u every time we've gone through this before. mr. meeks and i have a bill that would modernize and streamline the financial regulatory framework. we are hearing consistently particularly in the community banks and others that the piling on of the regulatory burden is really becoming chilling in terms of being able to move forward with business.

you mentioned once every ten years there is a analysis of this. i think ten years is too long especially since it's gone into a lot of these have gone into effect over the last four years. so what efforts are you making in that? >> i have a certain amount of background in this because i conducted a review of all of the executive branch agencies to do a look back and we asked the regulators to a similar look back. we didn't have the authority to direct them to do that. but at the moment with the ten year review coming up but they have indicated their intention and that is a very important thing. >> the time is expired into the chair recognizes the gentleman from texas for five minutes. >> thank you mr. chairman and secretary for your testimony today. >> before the crisis that caused the great recession, the u.s. had many financial regulators, yet none took the comprehensive look at the economy as a whole.

we were caught offguard because no one was tasked with looking at the big picture. congress created a financial stabilitthe financialstability t council as a cornerstone of the dodd frank act. it serves a critical function to keep watch. so prior to the passage of dodd frank, what government agency if any was responsible for looking at the systemic risk in the u.s. financial system? >> we learned there was no single agency that had responsibility for looking across the system and identifying issues of systemic risk. one of the reasons it was created was to make sure that in the future agencies collectively anybody chaired by the treasury secretary would be charged with that responsibility. i think it is critically important. i don't think it would be responsible to go back to a

world where you don't have the kind of ability to look across the different silos and that isn't to say that the other regulators were not regulating the industry that they had responsibility for. they were not necessarily looking at the way that the entire systemic risk profile developed. that's exactly what fsoc does and why it was created and why we need to be able to ask questions and also why we need to be able to ask questions when we don't know what the answer is. it's not the certainty that there's a problem and to ask a question that we have to be able to turn over a lot of stones and have the good judgment to only designate the analysis of the facts warranted. >> last week the committee passed hr 87 the fsoc transparency and accountability act. this bill would subject the fsoc to the sunshine act and expand the membership and a change voting protocols for commission and board members and it would

allow members of congress to attend and participate in fsoc meetings. in addition, the bill would prevent the fsoc from any further actions relating to designation of a non-bank including talking about the possibility of the designation for one year. but we undermine the ability to the crisis we experienced. how do you view the bill passed last week out of the kennedy and what is your primary concern? spinnaker i think transparency is important and we are trying to develop policies that make it very clear and i also think there needs to be a space where financial regulators can have a conversation about the confidential information to protect its space and the balance is important to strike.

i think the notion of complying with as much of the sunshine act as possible is something that we have reflected. much of it is reflected in the fsoc procedures but because of the balance it isn't 100% and i think it is the right balance for now and we need to continue to work to strive for striking the proper balance. >> i would agree with you. >> i would point out that the executive branch meeting meetinn everydaevery day and all day lod it's not considered appropriate for there to be congressional participation in the executive branch meetings. i don't think it would be appropriate here either. >> looking at the annual report, the fsoc deveney its recommendations to improve the health of our financial markets. interest rates have been kept to a historic low to encourage lending and to sprick atomic growth. to offset the effect of low

interest rates. the banks and credit unions have included risk seeking behavior such as extending the duration of assets and lending standards. how much volatility concerns you? >> i look at all of the different moving pieces in the financial system to keep track of them. obviously low interest rates do produce a certain tendency. the yield curve suggests that and i don't think if you balance the kind of where we've come in our economic recovery and the policies that have led us there we are in a place fred and others have to look at. >> the chair recognizes the

gentleman from texas. >> thank you mr. chairman. >> in his defense cut the designated insurance expert designated the provincial designation used scenarios and i quote the fundamental understanding of the business of insurance, insurance regulatory environment and of the state insurance company resolution guaranteed systems. do you agree with mr. woodall statement click >> the fsoc decision is one that i participated in and i thought the designation was appropriate and the risk analysis warranted it. >> so you disagree. >> i'm going to comment on the decision that we made. >> so just for the record what is your background as far as

experience in regulating the company's? spinnaker i don't pretend. i've worked as a policymaker from time to time but i think that the responsibility each of us has is to look at a detailed analysis prepared by all of the staff. it is quite voluminous and detailed in the case of the provincial designation. i participated in the hearing and you make your judgment based on the information prepared. >> when you don't have a background of your self -- of the reasons congress decided to put these insurance people on the fsoc program is a lot of regulators like the fed and the treasury and others don't have much ground experience in regulating who they? do they have background experience in doing that?

spinnaker for the first part they have backgrounds in the field whether it is banking or securities. but if you look back at the financial crisis of the insurance industry was very integrated in the financial system it was very much part of the cause of the systemic collapse. >> the insurance industry was -- what parts? that wasn't the insurance aspect of their business. spin it gets one more you look at all of the activity and whether or not it has transmission problems that go into other parts and i continue to believe that cialis is done is high-quality anis high qualid determination. and one other method that there was not an appeal of the judgment either. >> one of the reasons for designating relates to the asset liquidation and novices.

are you for your quick >> the millions of policy holders and other contract holders for products with cash grande or value assumes the scale for which there is no pressure. in other words was there anything that you would indicate they ever experienced a catastrophic liquidation of policies or surrender of policies? spinnaker the question isn't whether something has happened that whether there is a systemic risk in the future, and i think the scenarios you look at tentatively those that have not. the goal is having a financial crisis that you could avoid. >> trying to forecast cataclysmic events i don't know if anybody has an expertise in doing that, but what if i can

come up with a lot of wanted scenarios where you wouldn't want to put your money in any financial institution that the problem is when you start going down this road you impact the business model and the customers that rely on a lot of these financial products for something that you're not sure. and i think that when you ignore the expertise of people that have been put on fsoc to give you some guidance in that area do you hear so many of us questioned the methodology that's being used in this process lacks >> i don't disagree the scenarios are not the likely scenarios but that isn't our task. it's a stability being undermined. we know what they look like.

my question is in a time of great stress it doesn't mean that you are not changing the business model all that traumatic late. >> the time is expired and recognizes the gentle and from georgia mr. scott for five minutes. >> i think you are giving a doia fantastic job. i want to first of all ask for help for my constituents in georgia. i would deeply appreciate if you could assist us. we have an issue in which the state was about a year late in getting this money out to help the hardest hit.

a number of veterans who happens to be one of the fastest growing groups. their houses are being foreclosed on and their mortgages. in the next couple of months in august we are living in an eve event. in order to get moving on this, your predecessor and the assistant treasury secretary under who started this who did excellent work but unfortunately both of them have gone. so we need a nice calm down to department of community affairs thanking them for moving but reminding them that because.

just they call down would be very helpful to department of community affairs asking if there is any assistance the treasury can give them because if it were not for ten geithner coming down to light a fire down in georgia we would not be moving as we are. i don't want a dime of that money coming back when we had soldiers coming home looking under viaducts because they can't get that kind of help. i appreciate you doing this and we will get the information to the office on who to call. i have another point.

i want to get to the emerging threats and the financial stability on the international stage. you just returned from an international visit working with some of our other counterparts also the treasury is the enforcement arm for the sanctions. six months is coming up and can you give in a nutshell where we stand relative to the impact and what are the emerging threats and international? spinnaker on the hardest hit i would welcome the information. tim is running the office and i would have him follow-up when appropriate. as far as the sanctions go and the negotiations taking place i think three things can't first

the sanctions havcongress thesae and they've had a dramatic effect on the economy. they've crushed the economy and brought them to the negotiating table. the plan of action was very limited relief. it was several million dollars, not enough to reduce the harm it does to the economy and in fact the ongoing impact of the restructurings in the sanctions does more damage than the relief granted so the impact is building up and not reducing. third, we made it clear that we are committed to these negotiations but not to a deal unless it is a good deal. no deal is better than a good da deal. we are in a month that will determine whether or not there is a seriousness to set aside its nuclear weapons.

>> we are at that month on the final question where do we go from their? do we go back to square one or will there be an extension? >> i'm not going to judge what the end of the month is. there've been no discussions. there also won't be pressured to take a data deal. we've have to see where we are at the end of the month. what we have said is if the talks break down and iran isn't willing to make concessions we will look for tougher sanctions and we've taken no option off the table to not get a nuclear weapon. >> the chair recognizes the gentleman from north carolina to tremendous the oversight investigation subcommittee. >> we had a hearing about the asset manager report and testified that the report was

not something i would hang my hat on. >> it was one step of the process. it's not a decision by fsoc. it's something that they asked for as one of the things to consider. we've done other work as well in the analysis and we had a public session today before the hearing where we have broad participation by the industry and experts including michael who testified. one of the important things to remember is that fsoc has made no decision to the managers. all they've done is ask the question. i think it's important to ask the question and answer could be that there is no need to designate for the answer could be that there is another course of action and we will continue to that and to pursue that.

>> the chair testified a few weeks ago before the committee that the fcc has all of the authority necessary and no authority would be needed. >> do you concur on this assessment? spinnaker depends on the step to take. i'm not going to judge him very that isn't completed. >> do you believe they have the authority needed to regulate the industry? spinnaker they do have the authority to regulate the asset management. whether it is the precise authority depends on what moti motive. >> thank you for clarifying. that is helpful and very forthcoming. we have a number of other questions. but for the fsb, many of us have

complaints about how long transparent fsoc is that it's even less so and so when all of those in that category of an investment to investment companies are only u.s. registered investment companies. it becomes problematic for us to see that try to judge whether or not fsoc will take that same task. ..

>> >> handed the end user but

there is no way to pass bipartisan legislation. what is your encouragement to undertake bipartisan regulatory changes? >> in principle i indoors bipartisan legislation as a general matter. >> but in a specific matter that would help us with the process. >> with the dodd/frank amendments there have been an issue over the last four years the question is do you make of a technical fix or to make broader changes? we don't think there should be a broad review of dodd/frank. also give them the chance to implement with the overlay but i am happy to continue

the conversation. >> the time has expired. >> get approximately 11:30 a.m. we need to call a five minute recess. >>. >>. >> we appreciate you sharing i've got two questions. do you believe that as a result of fsoc we do have the authority that is accountable and responsible monitoring the financial stability of the u.s. economy essentially?

do you believe without teeth to - - fsoc the dangers are increasingly more ominous? >> we have a much higher level of visibility we have relationships between regulators that are strong for and deeper than ever before. we have the capacity to collaborate together in the the effective way. to put that back to where we were in 2007 and was harder with financial stability. >> that is interesting because i wonder how comfortable the members of this committee should be

with the expectations with american institution is still too big to fail. these huge interconnected bankholding companies and the non-bank financial giants and how comfortable should we feel that too big to fail has been dramatically reduced or eliminated? >> we have made enormous progress. we have much more capital in our bank, and to be exercised institutions if there was the failure away to a wind without necessarily cause saying that systemic risk that we saw in 2007. behalf of living wills for

the largest organizations. in pledges is a reflection of the market's belief there is a willingness to step in. it is reduced from the rating agencies and the imf. but with enormous progress with those ongoing policies to make the system stronger. that i hope we don't experience this.

>> we won't know for sure i was on this committee aha when others came and said if we didn't do anything to me rather depression we have a greater degree of comfort but that should be measured because we don't really know >> but i would add many of the authorities than bass -- from the time have been changed and we don't have the tools secretary paulson had at that time. >> he made those tools up by his own admission. >> but there retain jews made with dodd/frank for what the treasury could do so we have less ability to step in. but dodd/frank as a matter of law so he would step in

to answer those authorities. >> thank you, mr. chairman. >> given questions to mortgage servicing act to implement new capital standards and my first question is where is the risk? and where is the problem? >> and what we are seeing is

large banks or small banks are selling them as a result of the capital rules that are implemented. >> we definitely see there are higher capital standards for banks in general. >> to the extent they get out of that line of business we need to keep an eye on. >>:eight back up. but to lead the of four rolls over to have assets in

foreign countries ebrd only ones that would do that. and the paul's '03 to impact our way of doing business in this country. where is the risk what is the problem why are we allowing the identities of other countries to regulate a business that is american in nature? >> the capital standards regulators put into place are tougher they and basliii so it is not that it put the capital requirements in to play but national authorities have that in place but we have driven basliii to a higher standard because we worry about the risk that we face of other countries don't have the capital requirements that we have a and their banks are not as sound has the to be.

>>. >> who did these loans? >>. >> it is pretty specific then you need more capital. >> but the financial system that doesn't greater risk. >> i am happy to follow up tomorrow on mortgage servicers. >> as we go through this process mr. mchenry was talking about the stress test that the banks are doing and the modeling is allowed to be different than smaller banks but yet if you allow them to design their own model it is a completely

different capital ratio as if you use that for a smaller bank but you use two different sets of rules and i have a problem with that. it is rampant with what does treasury does. >> the regulators have gone to great lengths with the special circumstances it is not the banks for the stress test. >> but mr. secretary you allow the banks to determine their own models? that is not right. because you have to have the same standards for everybody.

>> tell me how 20 seconds left but to it is absolutely stunning. but to give him in example. was the lack of processing a cause? >> mr. secretary you know, as well as i do agee did the financial portion was not insurance but a financial what about the connectivity of that? the yield baxter make the chair recognizes the gentlelady from wisconsin. >> thank you so much. very nice to see you i was

looking through your testimony i could not agree more that there was an important strategy for the senior regulators across the spectrum because i was here when mr. paulson came with the $700 billion. we don't want to go through that any more. my question is good process leads to a good policy. i saw a the fsoc insurance expert dismissed from the decision and yet they were designated but then we saw the sec pushed back from

fsoc and he is the expert of the industry. his think it would be held will so then to dissent from the decision so not to be on record. what are we to learn from of the experts from the fsoc having less of a voice. >> i actually think they all have of voice but ultimately not everyone will agree.

and i have spoken to some length and i believe the record was robust than warranted the decision not everyone of the council agreed. but us decision stands the its with the analytic and quality of i.m. comfortable with us said judgment made but with regard to a the sec fsoc spoke before i was chair and that was said issue at the heart of the financial crisis and it was the urgency felt by fsoc

that more action on that and other issues that relate to the area of shallow baking. so i am hopeful they bill completes a rule in the summer. >> i did think the up sec did push back. but finally it i guess you heard the complaints prior to your designation not an opportunity to bring the case to the full board of principles to address the final charges that are presented to justify the decision. this seems to be contrary to

what weighed no is the process and what is your response to that? >> with the money fund issue there was a problem with money market funds and the challenge to resolve that crisis fell to the fed so it was quite appropriate for a fsoc but it is appropriate for us to continue. >> but the people don't get a chance. >> that is not correct. there is extensive back-and-forth between a company and fsoc. extensive. there is no designation until the end of it at the end of it they have the hearing and then they have a judicial process stemming

faq so much mr. secretaries to make your time has expired we will now be in recess for five minutes. >> phil holmes the dog ate my homework defense the irs and lois lerner is using the american people are not buying it but more importantly it calls into question the process we have computer crashes in our office time to time and to call-in the technology people to make sure the hard drive is preserved and you don't lose e-mail. i hope you will investigate this as secretary of the agency.

to find out what happened. >> we do know that hard drives to crash and that is what happened in 2011 it crashed efforts were made to recover what could be recovered and after it was the eye of matter of interest extensive efforts were made to put back together that could be put back together. i believe the commissioner has testified to this. >> i think the american people still waiting on a good explanation. i have always been struck at order of the liquidation as a highly subjective process that does little with tilt big to fail to get a and enormous amount of

discretionary power to regulators. fsoc regulation give us recommendations to the fdic. the judiciary committee with official services committee is looking at several possible changes in the bankruptcy code that we believe are properly constructed that is the better way with the resolution of failing. you have established residence. do you think it is a worthwhile process for congress to consider this approach? >> the liquidation authority is the effective implementation. obviously not the same as bankruptcy but of process that has become world is now

looking at is single point of interest? >> i would be interested to follow up a and i don't think that all this stuff was contain in the action but in the wake of the crisis. >> we would like to work as partners. >> but i don't know if that is the incentive i would not take the completion away but i would be happy to learn about the proposals. >> i am not sure we do yet either. >> congress was told there will be more court nets on with the volcker role of -- but i have not heard of a lot of follow-through. would you review what it has done to comply with the of

volcker rule and give us some assurance the implementation questions will be answered? i know six months later only six of those questions have been answered. >> the fact an identical rule was issued was in important step to give guidance. my fear is there would be differences that caused confusion and it is important there is one rule. and has not gone into effect with compliance but the regulators are working amongst themselves with the implementation stage tuesday in close contact because there is the risk of common lot with the agencies in different directions. that is not a direct response ability but the

important question that i asked the regulators as well >> i appreciate your willingness to get that. >> time is expired. the chair recognizes the gentleman from delaware. >> thank you for coming today and your good work. and readings the tea to its annual report. one of the things discussed is the repo market as the area of vulnerability for the financial system and a packet in february before the committee called it the second greatest threat to the stability of the financial system. do you share the concern and what steps will be taken to prevent i think the

short-term funding issues are a significant, brief for it so much but the risk that you don't have the findings that you expected and with the financial crisis can cause an immediate collapse with an accelerant. look at the amount of funding it is considerably down. >> with those of the lowe's issues is important the regulators to take action.

the fed has responsibility and sec has a responsibility. i know that both are working on but there is a market there and tell there is not. so what happens now when is working well but the save birds the fed looks at fractions it can take because they are a hidden but there has been discussion and unfortunately like my colleague from colorado we have a different perspective. it identified as the important issue but it does not say too much about the

negative consequences of not doing reform. i have been working with congressman to lead me on the legislation that would provide a government backstop with more explicit guarantee. what is your view on the risk of not to with reform in the short term? >> i believe housing finance reform is the unfinished business that did not get addressed in the immediate wake of the financial crisis. we have seen only recently with the estimates that taxpayers have to use the gse were there another crisis we still have the system we had before. great exposure. so housing finance reform is important and there is a lot of progress made in the senate with a bipartisan solution and the key is making sure there is access

to finance and a clearly delineated responsibility in terms of losses and to the extent there is any remaining government backstop that they would be well defined to it did make great progress but i hope the bill can get to conference to see bipartisan legislation. >> en have much time but a couple of pieces of legislation have been introduced about differentiating among financial institutions banks based on different criteria that may be the us designation should be 100 million or greater.

but is your thought on that? those that wooded differentiate:quality? >> i think it is hard to have a hard view that as size makes you sick of the can to create risk. does the combination your size or structure? something that requires ongoing. >> thank you very much. >> i now recognize a gentleman from wisconsin. >> good to see you back again. just a couple of questions on emails how does that died treasury back at the mills currently? >> the main treasury has the auto backup i have to get back to specifics so.

>> sold the information which treasury and backup band irs you don't know how? >> the main treasury as much smaller than the irs with different volumes it is a different system. but it is my assumption it is backed up. >> what about the white house? >> i am not the 80 professional. >> either m i i know hall the house backs up the emails and you are the chief of staff but you cannot tell me? . .