that, but think of the advantage we have visa v the rest of the world to develop an industry at a cost advantage vis-a-vis the rest of the world at a factory of maybe two or three times that we could put into the product finished goods to supply the world with things that they want to buy that are american. >> we are almost out of time, but before asking the last question, one more to go, i would like to remind you about two upcoming speakers' events. this friday, september 19th, our guest will be larry merlot, the president and ceo of cvs corporation. and next tuesday, september 23rd, we will have former senator jim webb of virginia. and finally, i would like to present you with the traditional national press club mug. i've never been inside your

office. i think it could maybe -- you would like to have this on your desk. >> i've been waiting for it for years. >> thank you. >> and our last question, as the head of wells fargo, how often do you get to ride in a stagecoach? >> well, i'll give you a quick deal. the stagecoach, if you've ever seen one, it had capacity for 18 people, 9 inside and it's not very big inside and 9 on top. it's actually a very unique design in that they used straps, leather straps as part of the suspension. and it's really an interesting wonderful part of our culture and it's an iconic brand. thank you very much, everybody. i really appreciate it. [ applause ]. >> ladies and gentlemen, ladies and gentlemen, thank you all for coming today. we are adjourned.

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@c-span.org like us on facebook, follow us on twitter. washington journal talked today with dr. scott gottleib on ebola. millions of dollars in aid to west africa to reign in the spread of the virus. we talked to him for about 40 minutes. we are joined from new york this morning by dr. scott gottleib to talk about this headline in the front page of usa today, president obama is sending 3,000 military troops to fight ebola. dr. gottlieb, talk about the commitment that was made yesterday. what does it entail? >> it's a robust commitment. they'll send 3,000 troops under the leadership of the pentagon. they'll also set up sites here in the u.s. to train people who

are going overseas to help the affected regions. the aid relief that we're providing includes enough money for about 17 facilities that will each have about 100 beds to treat affected individuals, so it's a robust effort. you have to be concerned that we're late to get into this. it will take a good amount of time to get those resources into the region, probably most of it won't be stood up until early october, but it's a robust response on the part of the president. you have to give the administration credit for pulling this together. now, one thing to keep in mind is those resources are only going into liberia for the most part. there's other affected countries. i think the administration is hoping that britain and france step up to help those countries, those two nations have historical ties to those regions in aftrica. >> the front page of the new york times this morning says what you just said that they

want more response from other countries. and in it, they write this, so far france has sent 13 million to againny for two tons of medical equipment and 15.5 million and 24 doctors to sen gal and ivory coast, other former french colonies. british troops are headed to sierra leon to build and staff a 63 bed facility near the capital of freetown. dr. gottlieb, what is this morning going to be used for? it includes 88 million, now the president is saying we're going to set aside 500 million from an overseas contingency fund at the pentagon also for this. what cost so much money to fight this? >> well, standing up the facilities and keeping people in that region is very expensive. and we're just -- we're playing catchup really trying to get

resources into those affected countries to do the tracking and tracing of people who have been stricken with the virus. you can basically isolate them and reduce the number of infections at each affected individual will cause and also get treatment facilities stood up so you can start treating people and also isolate them away from people who are healthy so you don't continue to spread the infection. that's enormously expensive. we're not going into some of the adjacent countries that had sporadic outbreaks of ebola or at risk of contagion and putting in resources in those countries to make sure it doesn't continue to spread outside of the affected region. we need to think of western africa one big hot bed right now. the entire region is affected by this and we need to put resources into all those nations. the u.s. has done a very good job getting resources, announcing resources they'll put into liberia just this last day we have historical ties to that country so it's natural we would

go in there. the european and united states need to focus on the other nations in that region. >> what will the troop s be doing? what role will they play? >> they'll be helping to set up the facilities. the army core of engineers will help to build the institutions, they'll help to staff some of the institutions, particularly the facilities will be used to treat health care workers. they'll be used for training as well. we'll provide training to health care workers and other people who will be on site in those facilities. they won't provide any kind of security or maintaining the quarantines, doing anything that the local government will be doing, the policing activity. this is just a relief effort to stand up these kind of facilities. it's not that different than what we did in haiti when we sent some military assets into that region to help build out facilities to provide relief after the earthquake. so this is something we've done

before. >> why the military, though? >> there's no other organization that has logistical capacity to get those resources into the region in a timely fashion. that's been the problem all along. people have been looking to international relief organizations like the world health organization. what we learned in this outbreak and this is what i wrote about is that there isn't a body capable of doing this. you have groups like doctors without borders who historically haven't wanted to see military assets go in to provide public health relief calling for it precisely because they recognize nobody else has the capacity to get the significant number of resources you need into the region, not just equipment but buildings. only a military organization is capable of doing that and the u.s. military will be capable of doing it better than anyone. >> what is ebola? >> well, it's part of a family of viruses called filo viruses

that's similar to morbid virus. it's basically a single strain of rna surrounded by a capsule of proteins. it's highly infected. what's you get it, you get very sick. it ravages the body. it's not very contagious. at least in its present form as best we know. it can only be spread through direct contact with body fluids. sometimes through droplets, but it's not airborne in the sense of a cold or the common flu is airborne. it can't survive for an extended period of time in dry air. it breaks down the immune system very quickly. it does what aids does in ten years except it does it in ten days. it depletes people of their ability to amount any response to any kind of invasion. >> it's not airborne, but you have warned that possibly it mu

tates and could become airborne. why do you think that could happen? >> well, it is mu tating and i think this is the concern that's prompting such a robust response from the united states and certainly heard some very concerning remarks coming out of the cdc directive, frankly the most concerning statements i've heard from a cdc directive in recent memory. usually they try to temper their remarks. tom has been talking about the risk. the virus itself is mu tating. we know that. there was an article looking at it. what you worry about is that it will mu tate in ways that make the virus more contagious. it would be unusual for a virus to mutate that would change its mode of infections. a virus that isn't airborne suddenly beens airborne. there's a lot of things along the way that could change the

virus into different things. so, for example, when you get infected with ebola, the virus itself lot of it is sequestered in the liver, not the lungs. but if the virus changes in a way where more of the virus becomes sequestered in the lungs so when people become sick, they have a higher viral count in their lung tissue, that could dramatically increase it to spread through respiratory droplets, things like coughing and sneezing. lot of things that could happen that would increase its ability to spread. there is some indication that it is spreading more efficiently than in past outbreaks. from the data we have, it looks like for every new infection you have, you get two new infections. if past outbreaks that figure has 1.3. now, we don't know if now that's because it's spreading in cities where you have closer contact and a higher propensity to

spread or because something has happened to the virus to make it more contagious. >> yeah. i read the phrase, this is an urban ebola. >> right. >> what does that mean? >> right. we've never seen -- well, we've never had an experience with ebola in a city before. all the outbreaks of ebola including the original outbreaks in sudan were in remote villages, remote regions. and so it was easier to completely isolate those villages and contain the spread and basically snuff it out. but now that it's gotten into major cities, it's hard to isolate those people in the larger cities. the infection count is so high that at one point the government was just basically putting up a military core don around the entire region and forcing marble law not letting people leave and figuring the virus would continue to spread and burn itself out. that's not an effective strategy for dealing with this but it shows you how desperate the

situation is and how rapidly it is spreading in those regions. >> the world health organization said recently that it will take about $1 billion to contain ebola. the estimate about a month ago was 100 million. that's our topic here this morning as we discuss with dr. scott gottlieb the threat of ebola and the president's decision to send 3,000 military troops to west africa to try to combat this. carl in nashville, tennessee, you're up first, carl, go ahead, democrat caller. >> caller: hi. i was just hearing that you're sending 100 million on this ebola outbreak. i don't understand why -- >> carl, can i just stop you there because the united states is going to spend more than that. they asked for 88 -- >> more than that? >> 88 million plus another 500 million and "washington times" says health and human services is seeking an added 30 million to help battle ebola and the administration already estimates it has spent about 100 million

on the effort. >> caller: well, this makes my point clearer. i don't understand why you can't actually throw up maybe 5, $10 million towards the nih, you will have several researchers going towards finding an actual solution to the problem instead of trying to corner it into a corner. thank you. >> yeah. look, i think there's been far too little focus on therapeutics to change the contours of this outbreak. we're relying on traditional public health tools to isolate people and treat individuals and stop the spread through traditional tracking and tracing of people who might have been in contact with the virus. that's important. that's the mainstay of the public health tools used in these situations. if this continues to spread and there's a risk it will continue to spread and you'll have a wider epidemic that will be spread outside that region, the only thing that could be a game changer and change the contours

this is to introduce a therapeutic. we're not that far away from effective vaccines. successive studies in primates. and there's another a number of small molecule drugs that look like they could be effective, including approved drugs. looks like some of the cancer compoundsdl classic compounds he shown pretty good activity against ebola. so we are testing these things. i think we should focus much more effort on that because that could be a game changer and we could end up needing it. now of the 88 million, about 30 million is going to cdc and the balance is going to agency called barta to continue development of the therapeutics targeting ebola. the nih put out a press release back in 2001 announcing a successful vaccine that worked in primates to protect against ebola and yet here we are many years later, 13 years later and still don't have one. the closest we are is an

experimental vaccine. they're testing it in about 20 healthy volunteers. so far those tests look to be going well but still months away. >> mary, massachusetts, republican caller, hi, mary. >> caller: yes. i just am concerned about the fact that we bring the sick people who get the disease over there back to our country and then we send well soldiers, young people over there for what purpose? i don't understand the president but i don't understand him any way but i don't understand him in this. >> well, let's talk about those two things. bringing the sick americans back to this country to be treated and will these soldiers, how will these soldiers be protected that are going to west africa? >> yeah. well, look, i give president obama credit and i've been critical of him in this outbreak in some of the articles i've written. i give him credit for what he

did yesterday, meeting with one of the individuals, a doctor who got sick, was brought back to atlanta and treated there successfully. the president met with that individual in his office. i think it showed the world that this can be successfully treated. it showed the world that this is -- that individuals who are successfully treated are no longer infectious after all the president wouldn't be meeting with him. and it showed the world that we owe these individuals who are willing to risk their lives and go over there a debt of gratitude and someone who does that deserves an audience with the president. it was a very bold gesture on their part and very good judgment. i think there's very little risk for bringing back individuals, americans who get sick over there, particularly americans over there trying to provide relief services. we owe it to them to bring them back here and try to give them the best medical treatment possible. i think there's very little risk that the virus would ever propagate from that. those individuals when they get brought back here are under very strict controls. as long as you maintain good controls you can avoid spread.

now, as far as the individuals who do go over there, they are at risk. and, you know, i think that the individuals from the cdc and the military have more resources available to them and will be at much lower risk because they'll be able to protect themselves, they'll have good equipment, good gear, good training. the individuals who are more at risk are the health care workers who are going over with less training, people going to work for example with doctors without borders and some of the americans who are just going over to set up these clinics. as part of the announcement yesterday, the president said they'll be standing up some training facilities here in the u.s., the fema will be doing this in a site outside of alabama i believe where they'll provide a three-day course to americans who are going overseas to provide relief aid, particularly health care workers. but there is a risk and you have to admire the courage in doing it. quite frankly, the two groups who have been most aggressive here in providing health care resources on the ground has been doctors without borders and some of the religious charities here in the u.s. who have been courageous in going there when

the world health organization was pulling out their health care workers, those two groups were pulsing in more health care workers so we owe them a debt of gratitude. as far as why are we doing this, this does have broader implications for the u.s. if this is not stopped in africa, if we don't contain the spread of this virus, this virus will continue to mutate and will continue to spread and it will spread outside that region. we need to get control of this. and so the only way we'll do that is to get these resources in there. it's very clear that these african nations at this point they've been so degraded in terms of their health care facilities and their capacities, it's very clear they can't do this on their own. >> we're talking with dr. scott gottlieb and the coauthor of this opinion piece in the wall street journal this morning, ebola's warning for unprepared america. we can devil into that more here. want to show our viewers what the president had to say

yesterday when he travelled to the center for control disease and announced the 3,000 troops. >> here is the hard truth. in west africa, ebola is now an epidemic of the likes that we have not seen before. it's spiraling out of control. it is getting worse. it's spreading faster and exponential exponentially. today, thousands of people in west africa are infected. that number could rapidly grow to tens of thousands. and if the outbreak is not stopped now, we could be looking at hundreds of thousands of people infected with profound political and economic and security implications for all of us. so this is an epidemic that is not just a threat to regional security, it's a potential threat to global security if these countries break down, if their economies break down, if people panic. that has profound affects on all

of us even if we are not directly contracting the disease. >> dr. scott gottlieb, that last part where the president talks about that this has profound political and economic implications. what are they? >> well, i think the president articulated it there that these nations have effect live i stopped working. you talked to individuals, you listen to what the officials in the government of liberia saying, nothing is happening. the economy is shut down. they can't get anything in or out of that country. transport has been cut off. their health care facilities have been decimated. they've actually lost dozens and dozens of their own health care workers and this is a nation that didn't have a good infrastructure to begin with. they're not just grappling with ebola at this point, they're grappling with getting food into the country, delivering babies, doing all the normal things that a national health care system

would do an infrastructure would do. they can't do that right now. the country has effectively been decima decimated. so part of what's been done right now with the relief aid that's going in, at least what they're attempting to do is not just build out facilities to help deal with ebola but backstop the entire nation and this is happening -- this is a domino effect. this is starting to happen in the other nations as well. and what you're seeing is the countries, the adjacent countries that so far haven't been affected or haven't been affected as badly by ebola, they've just had handfuls of cases, they're now sealing their borders. they're cutting off trade. they're stopping air transit and that's going to further exacerbate the economic strain on this region. so this is very counterproductive. we're going to have many, many lost years in terms of just the ability of these countries to continue to grow and build out their economic prosperity because of this crisis. and, you know, you have the potential for failed nations as a result of this. liberia said their entire nation

is at risk. and i don't think they would be overstating that at this point. >> okay. let's go on to richard in philadelphia, independent caller. hi, richard. >> how are you doing? good morning. dr. gottlieb, two things i'm interested in. the issue around the mutation. i'm trying to understand if i read the science article or at least the abstract correctly it started with one person, only about three months ago and it's been mutating over the last three months or at least over three different countries. and the question of how is it mutating so quickly over a short period of time? it seems that it's been in angola or the congo region a long period of time and tulane has been over there ten years looking at ebola. but all of a sudden this here virus is mu tating so quickly. that's one. then the other thing is the africa command, i believe in august, i believe i seen that it was said that the president was

setting up a particular ebola watch or part of the africa command that deals with the u.s. military that is already within the region. is this money going to be funneled through the command and then dispersed to do these activities? or is it some other kind of way that what i think i heard you say these different individual units or cdc or whatever may get this money? >> well me answer the second question first. we set up as part of the what the president announced yesterday they're going to be setting up a separate command i believe in the capital of liberia where you have a lot of affected cases and that will be a command center for the relief that we're going to be supplying to that country. so they're actually putting the command center and the resources right into really the hot zone. as far as the mutation, the virus has undergone some drift over time and there are five different versions of ebola if you will that have been

identified. but the issue with this virus, it's a single strange of rna and what that means is that when it replicates, it breaks apart, very sloppy replicator if you will. as it replicates and as one virus grows into two viruses grows into three viruses, because of the structure of the virus, it's very prone to mistakes. and so you get a lot of reassortment, lot of changes along the way. the other thing is that when people get sick with ebola, they have very high numbers of these viral particles in their blood. so those two facts combined, the fact that every affected individual has literally billions of viral particles in their blood and the fact that every time this virus replicates, even inside an individual, you're going to get a lot of changes in the virus because it's such a sloppy replicator as a virus goes. that leads to excess i have mutations. we've always known that about ebola. what we have never had before is an outbreak of this magnitude.

so you're literally getting billions and billions of reassortments of this virus for every affected individual and just by chance you're going to get some that, you know, are going to be changes in the virus that could make it more contagious. now, that doesn't mean that just because one individual somewhere develops a mutation in the virus that could make it more contagious that that particular viral particle goes on to affect another individual. that's part of why you want to contain individuals, you have to quarantine people after they become ill, you don't want them to continue to spread the virus but it does create the potential that you could have a breakout of a new strain of ebola, a strain of ebola that does have qualities that make it easier to spread and make it easier to spread outside the affected region. that's part of what's driving this response. i mean, the president was very expolice it and you would expect u.s. officials to be somewhat measured in these kinds of situations to not want to stoke

unnecessary anxiety on the part of americans. i think the fact that they have been candid about this frankly is laudable that they're being honest about the risk but i also think it reflects the magnitude of what the concerns are by this -- if this was to continue to spread. >> okay. let's go to minnesota, ronald, democratic caller. >> caller: yeah. i have one question on some of these news program they've been showing like somebody coming across the border in canada or they're saying down in mexico that there's people that have ebola and then come across. how can this be -- can it be held in a vile or something like that or powder or dried? how can it be carried or held that long? doesn't it have to be from a person? >> well, i mean you could have an affected blood sample. i think what most people are

concerned about isn't someone trying to bring this in in some kind of terrorist type scenario where they would bring in a vile of tainted blood but people just traveling from the region who come in proximity to the virus and get on a plane and come back to the united states. the virus has an incubation period of up to 21 days. so you could be incubating the disease, you could be exposed to it and have the virus and feel fine for up to three weeks. so, there is at least the possibility and it's probable that we will see cases in the u.s. that people will go over, be exposed to it, catch the virus, come back here and not become sick until they are here. now, we have seen in the past terrorist groups try to look at using ebola as a weapon of bio terrorism. the group in japan that set off this saren attack in the subway system, prior to them using that gas, i think that was the gas that they used, they had been

reported to and now it's documented that they had sent some individuals to the congo to try to get a sample of ebola to try to use that as a weapon of terrorism. so, there is i guess the theoretical risk someone could go into the region and get access to the virus very easily, but more likely the scenario that's going to play out here in the u.s. is going to be just travelers who don't know that they're ill or maybe do know they're ill and want to come back here to get first world medical care who come into the united states with the virus and potentially infect other people. >> apex, north carolina, mike, democratic caller, you're on the air with dr. scott gottlieb, go ahead. >> caller: i believe that the doctor is talking about the targeted therapy. i've got stage four lung cancer around being treated at duke university and i think it's wonderful.

far too long we've cared more about money than we have our fellow creations in africa, whether color or underprivileged or whatever. i feel like it's time that we show our american spirit. >> all right, mike. we'll go on to russell in riverview, florida. russell, what are your questions this morning or comments, a republican caller. >> caller: i think travelers. if you have an outbreak in new york, how fast will it spread. if you don't check people coming in, that means quarantine them when they come in or whatever so you know they're not carrying it. >> should there be travel bans? >> well, i don't think there should be travel bans. i think that's -- again, that's counterproductive because it will prevent resources from going to the region. we should be and we are stepping up surveillance at ports of entry, so you have seen customs

of cdc, customs and border patrol deemployee resources at jfk. there's additional health screening tools there. they are doing questionnaires and some random checks. they have also put in more resources into some of the hospitals that will be the likely catch areas for this. so, where are we likely to see the first outbreak of ebola or the first cases of ebola? it's probably going to be places like down state here in new york city or queens where you get a lot of immigrants from that region, people coming back and forth from western africa, that's most likely where you're going to see it. now it could be traveler traveling any part of the country. but if you were to play the probltds, you want to make sure that those hospitals are well staffed and well briefed on what to be looking for and the cdc is doing that right now. that was part of the announcement yesterday that they have been doing those things before. >> what sort of technology do the border officials have to

screen for ebola or other diseases? >> right. well, probably the best tool that they have is questionnaires quite frankly. and they haven't instituted routine questionnaires of everyone, but they are doing selective questioning of individuals who have reported they've been in the affected region. they also have the capacity to do things like take people's temperature. that might not be as efficient because people might not be sick. i think one of the things we should consider is putting in place tracking and tracing mechanisms where when people come over from the affected region, perhaps we screen them with questionnaires and do some followup where there's a call made three or four or seven days later to make sure they didn't become sick after they got here. as long as you identify people early and you identify anyone they may have been in contact with, that's how you prevent epidemics from happening in the first place. and we have the capacity to do that. we have the resources to do it and frankly we have the time to do it because we know that this

is probably coming to the u.s. what you want to prevent is outbreaks. you want to prevent clusters of infections. you want to make sure that people do come over you can isolate ch many we have had in the last five years ten incidences of fever, some close cousins of ebola. in each case, in each of those ten case there were no other infected individuals from the people who brought the virus over here. so we do have the capacity to contain this. >> what's the difference between outbreak and epidemic and pandemic? >> well, an outbreak is usually it's all lexicon or all terminology so it's not really -- there's no clear boundaries in those definitions. outbreak usually refers to something that would be local, outbreak in a school. an epidemic might be what we're experiencing in the midwest with that eco virus seeing hundreds of thousands of cases within a certain region. a pandemic is typically thought of as multi-continent.

so in this case, people have started to refer to the ebola outbreak in africa as an epidemic because it's multi-national, affecting many nations. if it was to go to another continent, then you have to use the terminology pandemic. some people might refer that to a pandemic. it's affecting more than one area. right now most folks are saying it's an epidemic. >> in philadelphia, janet is watching us there, an independent caller, janet, good morning? janet, got to get your dog under control here. go to yolanda in mansfield, ohio, republican caller. yolan yolanda, go ahead. >> caller: hi, yes. i was just calling. i mean, my hair stood on end when i heard the president wants to send 3,000 of our troops over to fight ebola. i just think maybe we should have experts, people trained in the health field. i mean, our poor guys, they're

trained to fight but this is something they're not trained for and it just scares me to death. >> okay. is that true, doctor? >> well, the people who are going over are medical personnel by and large or people who do logistics or people who build facilities. we're not sending, you know, front line troops or special forces there to fight ebola. there is a lot of resources within the united states military that work specifically on these kinds of infectious diseases and those are the individuals that are going over, including the cdcs forward depl deploying. we do have those resources. quite frankly, if you're someone in the military the cdc who works in special pathogens, works on hot pathogens like this, you really want to be there. i mean, this is the place to be. this is where you're going to get a lot of important training, lot of important insight into this outbreak and learn a lot potentially if it does come here to the united states. so there's certain value in

having some of these individuals at the very least in that region not just providing relief aid but also continuing to learn about this epidemic. we've never seen anything like that before and this does have global potential. >> by the way, "usa today" saying that army major general darrell williams will lead the african effort. he already arrived in liberia where he will be setting up a regional command center and "the wall street journal" this morning reporting on america's history with liberia, it was founded by freed american slaves, has a profound foundness for the united states and lie beer yans welcomed the use on tuesday of the intensified american response. carroll in north carolina, republican caller. go ahead, carroll. >> caller: i just can't believe when i wake up in america from day to day that we have such incompetent people running this

government. if you wanted to keep it from coming over here, the place to keep it is over there. why do you think that we need another problem? we've got troops that are coming back from a war that aren't even being taken care of here in the united states. >> all right. we'll take your point. >> well, the way to keep it over there -- look, i think the administration was very late to this. i had written something about three weeks ago in "the wall street journal" editorial page criticizing the administration for not doing something. they deserve credit for what they said yesterday. it's still hard to motivate governments and get bureaucracies the do things. the fact that they were able to pull this together deserves a rod. they pulled together a pretty robust response yesterday although they need to escalate it even more. now the way to keep it from coming here is to treat it over there. if it isn't snuffed out over there and if we don't contain the continued spread of this,

this is a potential now of hundreds of thousands of infected individuals, if we get to that order of magnitude and that seems like the likely scenario right now, we will see spread outside that region. if this continues to spread among individuals over there, you're going to see mutations in the virus itself that could make it more contagious and make it harder to treat. so we have got to get the resources into that region that will help treat this and contain it and quell it. and the reality is, as we are seeing right now, there's no other country in the world that seems prepared or willing to step up to do this. britain and france have a historical obligation to some of these nations in that region that are badly affected by this and their response so far has been minimal. so, once again, it's going to fall to the united states to do this. >> all right. we'll go back to janet in philadelphia independent caller. hi, janet. >> caller: hi. can you hear me? >> yes, we can.

go ahead. >> i had you on speakerphone. yeah, i don't know if somebody asked this question or not, but why can't we send the vaccine over there? >> wish we had one. yeah. well, there is a couple of vaccines in development, some that look promising. there's one that's been developed jointly with the canadian development and bio technology company, another one that looks further along from glaxosmithkline that is undergoing testing right now testing it in 20 healthy volunteers put it into 10 healthy volunteers with no reported adverse effects it's been demonstrated to be effective in monkeys. you need some boosters to maintain the vaccines protective effects and protective effects don't last in perpetuity. you need to be reboosted f you will. so if that does get deployed in the near term, it's likely to be deployed first i think in health

care workers, but there are some promising therapeutics in vaccines. we need to do much more to accelerate the development of these. there seems to be a view that the way you deal with these is with sort of traditional public health tools of tracking and tracing and quarantining people. that's all well and good and need to do be doing all that, but we also need to think about something that could dra mat kwli change the contours of this because this might continue to get worse. the only thing that will continue to do that is introducing a therapeutic that could treat this disease. >> you write about that in your piece today in "the wall street journa journal", ebola's warning for an unprepared america saying that therapeutics is something that this country needs to address along with protection. brian, independent caller in texas. go ahead, brian. >> caller: yes. you haven't called sending a large contingent of doctors over there and my question is, are we going to put politics aside and coordinate with these doctors or

will we play politics again and take longer to involve problems? >> yeah. qvis sent over 165 health care personnel in a laboratory facility and they'll stand up a hospital to treat individuals. i think those resources went into another country they either went to sierra leon. they didn't go into liberia. it seems that the u.s. will take the charge in getting resources into liberia in part that's because of the historical ties we have with that nation, you know, probably u.s. troops wouldn't be as welcome in some of the other nations as they will be in liberia, so that does seem to be our obligation right now and quite frankly liberia has been the hardest hit so it will require the most resources so the fact that the u.s. is focussing there is probably a good thing. >> kim is our last call. cedar park, texas, democratic caller. >> hi, dr. gottlieb, have they checked and make sure that it's

not coming from mosquitos like it was in yellow fever. they filled up all the tents but took months and months and months of them trying to convince the doctors and again, have they located, if they're eating that bush meat because, you know, please people, quit panicking because that's what causing us to shrink from the problem so let's go at it and just knock it down like we always do. thank you. >> okay. >> right. it's not clear what the vector is, what transmits ebola to humans. it's believed it comes from bats and the bats either transmit it directly to the humans through things like their fee cease or they transmit it to monkeys and monkeys transmit it to humans but we're really not sure. that's the best theory is that it comes originally from bats and gets transmitted directly to humans or gets transmitted to monkeys that are used for things like bush meat and people will get the virus from monkeys. >> dr. scott gottlieb thank you

for your time and this conversation. appreciate it. >> thanks a lot. thank you. friday at 10:00 p.m. eastern, c-span's 2014 campaign continues with democratic wendy davis and republican attorney general greg abbott. here are a couple of campaign add ads that voters have been seeing. when you're battling cancer, you pray for a cure. but greg abbott did his best to keep my prayers from being answered. greg abbott was charged with overseeing the state cancer research fund he let his wealthiest donors take it. they showered him with giftds and free vacations and made off with money that was meant to find a cure. i pray that greg abbott never becomes our governor. >> some new allegations against texas democratic candidate wendy

davis. >> a recent investigation finds that democratic candidate wendy davis didn't always recuse herself from ft. worth city council when the consider was considering projects that affected her business interests. >> in one instance, she voted for 21.5 million in tax breaks for hotel developers who used her title insurance company in the sale of the building. >> this is the first time in 14 years that texas will elect a new governor. texas gub thatter to ya candidates, wendy davis and republican attorney general greg abbott face-off in a debate friday. watch live coverage at 10:00 p.m. eastern on c-span. this weekend on the c-span networks, our campaign 2014 debate coverage continues friday night at 8:00 p.m. eastern on c-span. life coverage of the arkansas governor's debate with former u.s. house member democrat, mike

ross, debating former administrator of former u.s. congressman, asa hutchenson. saturday night at 8:00 p.m., live coverage of the iowa governor's debate between terry bran stad and his challenge, iowa democratic state senator jack hatch. and sunday evening, jenny beth martin, president and cofounder of tea party patriots is on q and a at 8:00 p.m. on c-span2, saturday night at 10:00 p.m., on book tv's afterwards, columbia's director of ast row biology talks about life on earth and the current debates about how it began. and sunday, author martin storm and his later life as a double agent on american history tv on c-span 3 will mark the 50th anniversary of the warren commission set up to investigate the assassination of president kennedy. on saturday at 12:00 p.m. council and staff members to the warren commission describe their investigation and sunday afternoon at 4:00 p.m. on real

america, the 1964 two-hour cbs special report detailing the warren commission's findings with anchors walter cronkite and dan rather. let us know what you think about the programs you're watching. call us at 20-262-6340, e-mail us at comments. or send us a tweet @cspan. join the c-span conversation. like us on facebook. follow us on twitter. update now on imply mentation of the dodd-frank financial industry regulations that went into effect after the 2008 housing crisis. the senate banking committee heard from a federal reserve board member and heads of the protux bureau. this is about two hours.

today i welcome back the financial regulators for another one of our many wall street reform oversite hearings in this committee since the enactment of the law. you all have been busy over august as you continue to make progress in completing rule makings to implement wall street reform. i thank you and your staff for your hard work. i strongly believe today as i did in 2010 that wall street reform was the appropriate response at the time to the financial crisis. we can already see the benefits we have a system of regulation for our banks and bank financial

companies. we have transparency and oversight for directives. we have a dedicated and accountable watchdog consumers and we have strengthened coordination between regulators and we have new ways to monitor threats to financial stability. as we all know, a road to implementing wall street reform has been long and has not always been easy. this is especially true where regulators trying to work together to write effective rules for increasingly complex and global financial system. for some, this work has been done while congress has not provided adequate funding for rules have not always been met where open arms from congress, industry or consumer groups.

however, through constant oversight, members of this committee have had the opportunity to express their views and each of you and your agencies have listened. because of it, the finalized rules are stronger. going forward, as we get further away, from the crisis and calls to water down wall street reform grow louder, policy makers can not forget it listens from the crisis and how costly a regulatory system can be. our financial system is -- when we have tough but fair oversight to provide a level playing field for all financial firms to better serve their clients.

today i look forward to hearing from the witnesses, their next steps to complete their remaining wall street reform makers. because of your diligent work, our financial positions are stronger and economy is more stable and rest of the world is looking to us to -- >> see regulations this is a vast improvement from where our country was and during the financial crisis. i turn to the senator for his opening statement. >> thank you, mr. chairman. dodd frank requires about a 400 new rules to be written and approved by the federal financial regulators. and today slightly more than 50% have been finalized and 25% are still in the proposed stage. remaining 25% are yet to be written. with some 220 rule makings finalized we have no idea what the cumulative cost of dodd

frank is or will be. the voul kerr rule will add 1 billion for services of outside professionals according to regulators on paperwork reduction act estimates and that is just for two of the 220 rules finalized. we can't pretend that these additional costs are not passed on to consumers. without a cumulative analysis of the true cost and burdens of the rules we cannot understand the overall impact on the regulated entities and consumers and markets, for example, while dodd-frank was intended to exempt small institutions from some regulations, what i hear in idaho, regulatory demands are trickling down to the smaller banks and entities, community banks of disproportionately

affected because they are less able to absorb additional costs. out of concern what new regulations may be imposed next, financial institutions keep money for compliance costs set aside rather than investing it in local communities. we can and should make common sense changes to lessen the regulatory burden. in past hearings, the regulators supported several dodd frank fixes, including the end user fix and pushout rule and giving the fed flexibility to place the capital standards it places on insurance company. regarding the latter, the senate passed a fix so that insurance companies are not surprise to bank like capital requirements contrary to their business model. i look forward to hearing from the witnesses what specific fixes should be made so traditional services do not become so complicated or

expensive that banks like those in idaho and other rural communities can no longer offer such services. i appreciate that some of your agencies have commenced the statutorily mandated review of existing regulations to identify outdated, unnecessary or unduly burdensome regulations. a similar review led to the 2006 regulatory relief law and i encourage the remaining agencies to join this effort. i urge all of you to make this rel vul a priority to set up outreach meetings and with community banks and others and provide a list to congress. several of our witnesses have discussed eliminating a paper version of the annual privacy notice. a measure that has passed the house and has more than 70 co-sponsors in the senate. the law also established the financial stability oversight council. at the july hearing i reiterated my concerns to secretary lew, about the designation process. only reinforces those concerns

and threatens to disrupt a carefully forged regulatory balance. for an industry that has been traditionally under the purview of state regulators. the u.s. financial system and capital markets cannot remain the preferred destination for investors throughout the world if our regulators operate under a cloak of see kreltcy. secretary lew stated that each was given detailed explanations as to why they are designationed. this information was provided only after the designations were naed. this is not how our regulatory framework should operate. i urge you to publish indicator based criteria in the federal register for comment and urge you to impose a moratorium until there are objective measures and increased transparency. only then ke with ensure accountability. all of your agencies should recognize the benefit in having an open and transparent regulatory process.

transparency does not weaken rule makings but gives them much needed legitimacy. mr. chairman, the ish yus we're discussing are very important especially as they relate to our smaller financial institutions. i know the committee will be looking at the strong issues in the future and i thank you for that. >> thank you, senator. this morning opening statements will be limited to the chairman and ranking member to allow more time for questions from the committee members. i want to remind my colleagues that the record will be open for the next seven days. any other materials you would like to submit. now i would like to introduce our witnesses. daniel trujill lo, member of the board of governors of the federal reserve system. martin grimberg, chairman of the federal department insurance

corporation, tom curry, a controller of the currency. rich cordray is director of the consumer financial protection bureau. mary jo white is chair of the securities and exchange commission. tim is chairman of the commodity features trading commission. tim, welcome back to the committee. i thank you all for being here today. i would like to ask the witnesses to please keep your remarks to five minutes, your full written statements will be included in the hearing record. governor truilllo, you may begin your testimony. >> thank you, mr. chairman. and other members of the

committee. senator johnson, i understand that this may be the last time that this group of six appears before you and your time as chairman of the committee. i and i just want to say before i begin that i think everybody appreciates the care and even handedness with which you've approached the substance of these important issues of financial regulation and speaking as one who has testified before you over the years i want to thank you for the patience and courtesy that you've extended to all witnesses in your time as chair. i think it's something that we've all appreciated and that people have broadly admired and we obviously will miss your presence on this committee.

in appearing before this committee in february, i noted my hope and expectation that this year would be the beginning of the end of our implementation of the major provisions of the dodd-frank act. seven years later we are on track to fulfill that expectation as detailed in my written testimony. to be clear though, this is the beginning of the ends, not the end itself. the agency still has some work to do in adopting regulations specifically required by dodd-frank. moreover, the fed has additional work to do in filling out a regime of additional requirements for systemically important financial firms. let me mention here two priorities. first, we'll be proposing capital surcharges for the eight u.s. banks that have been identified as a global systemic importance. by increasing the three levels, the amount of common equity to be held by these firms, we look to improve the resiliency to look at the act the failure would have on the financial system. while we will ugs the risk based capital surcharge framework as a starting point, we will strengthen that framework in two respects. first, the surcharge levels for the u.s. institutions will extend higher than the committee range, which will mean higher applicable surcharges for most u.s. firm, most of the eight u.s. firms and noticeably so in

some cases. second, the surcharge formula will directly take into account each u.s. reliance on short term whole sale funding which we believe to be an important indicator of systemic importance because of the potential for funding runs and con teenagen under stress. while some other countries have also applied higher surcharges on theirs than required by the committee, none has explicitly taken account of vulnerabilities. second, we're developing a proposal for the same eight banks to maintain a minimal amount of long term unsecured debt. should one of these firms go into resolution or bankruptcy, this structurely sub od natured debt will be available as to

conversion into loss absorbing equity. the long-term insecured debt should reduce run risks in an orderly liquid and or bankruptcy process. it should also have the benefit of improving market discipline since the holders of that debt would know they face the prospect of loss should the firm become insolvent. you will note -- i mentioned short term whole sale funding a couple of times in connection with the most systemically important institutions we're also mindful of the risks that runable funding can pose more generally. we're working with international counterparts in aproposal for minimal margins for transactions such as repos that extend to lending of this sort to all market actors. while there's more to be done with respect to the largest

institutions and vulnerable whole sale funding markets, i would close by suggesting it may be time to consider raising some thresholds or eliminating all together the application of some dodd-frank provisions to other banks. the three banking agencies before you today have all been working on ways to reduce regulatory and super advisory burdens on smaller and mid-sized banks and also be benefit from statutory changes. one would be to raise the current $50 billion asset threshold that determines which banks are in the systemic category. a second would be to exempt community banks entirely from provisions such as the rule and incentive proposition of dodd-frank which are both directed at practices in larger institutions. thank you for your attention, be pleased to answer any questions you may have. >> chairman, please proceed. >> thank you, chairman johnson ranking member and members of

the committee for the opportunity to testify on the fdic implementation of the dodd-frank act. i would like to begin by thanking chairman johnson for his strong personal support and encourage. to me both during my service on the staff of this committee as well as since i've been at the fdic. i'm very grateful for the support of encourage. you've given me. and will greatly miss your steadily thoughtful leadership of this committee. the recent actions by the banking agencies to adopt a supplementally leverage capital ratio, a final rule on the liquidity coverage ratio, and a proposed rule on margin requirements for derivatives

address three key areas of systemic risk that taken together are an important step forward in addressing risk posed particularly by the largest most systemically important financial institutions. in april of this year. finalized and enhanced supplementary ratio of final rule for the eight largest and most systemically important bank holding companies and their insured banks. this strengthens the capital requirements well beyond the levels required in the accord. the enhanced supplementary standards will achieve one of the most important objectives of capital reforms, addressing the buildup of excessive leverage

that contributes to systemic risk. just last week, the federal banking agency issued a joint interaction final rule implementing liquidity coverage ratio. during the recent financial crisis, many banks had insufficient liquid assets and could not borrow it to meet their liquidity needs, which greatly excesser baited the depth of the crisis. the liquidity coverage ratio will be the first liquidity requirement in the united states and important step towards bolstering the liquidity

position of large internationally active banking organizations. finally, establishing margin requirements for over the counter derivatives is one of the most important reforms of the dodd-frank act. before the crisis, some institutions entered into large otc derivative positions without the prudent exchange of collateral or margin to support those positions. the margin requirements by the proposed rule should promote financial stability by reducing systemic leverage in the derivatives marketplace. >> the fdic and the federal reserve have completed their reviews for the 2013 resolution plans submitted to the agencies by the 11 largest most complex bank holding companies as required by title one of the dodd frank act. on august 5th, the agency issued letters to each of these firms, detailing the specific short comings of each firm's plan and the requirements for the 2015 submission. while the short comings of the plans varied across the firms, the agencies identified several common features of the plan's short comings including unrealistic or inadequately supported assumptions and failure to make or identify the necessary changes in firm structure and practices to enhance the prospects for orderly resolution. the agencies will work closely with the companies to implement

required improvements in the resolution plans, including simplifying their legal structures, amending derivative contracts to provide for a stay of early termination rights, and ensuring continuity of critical operations during bankruptcy and demonstrating operational capabilities to prue reliable information in a timely manner. the agencies are also committed to finding an appropriate balance between transparency and confidentiality pro pry tri and super advisory information in the resolution plans. finally, in the role of supervisor a majority of the community banks in the united states, the fdic has been engaged in a sustained effort to better understand the issues related to community banks. those institutions that provide traditional relationship based banking services in the local communities. since the beginning of this year, fdic analysts have published new papers dealing

with console dags among community banks and effects of population on community banks and efforts of minority institutions to provide essential banking services in the communities they serve. focuses specifically on community banks and providing technical assistance to them, including assisting with critical cyber risks. mr. chairman, that concludes my remarks, i would be glad to respond to your questions. >> thank you. >> controller curry, please proceed. >> chairman johnson, ranking member and members of the committee. i'm pleased to appear here to provide an update on the steps we have recently taken to further enhance the effectiveness of the bank supervision and provide status report on the completed and current projects required by the dodd-frank act. like my colleagues, i too however would like to first thank chairman johnson for his guidance and steady leadership over the years. i've been in public service for

a long time and learned early on that when congressman johnson or senator johnson had something to say on a financial matter, it was worth listening to. i thank you for your years of service and wisdom and wish you well in your retirement. in the four years since passage of the dodd-frank act, new tools have been developed and new rules have been put in place to address regulatory gaps and create a stronger financial system. for our part, we at the occ have completed all of the dodd-frank rule makings for which we have sole responsibility. for those interagency rule makers that remain to be completed, i believe we have made good progress to date and anticipate finalizing many of them in the near term. since the crisis, we have seen steady improvements in the overall financial condition of the banking system. despite the improving strength and health of banks, i'm keenly aware of the need for supervisors to remain vigilant.

last week i was pleased to sign a new rule that not only memorialized the heightened standards we've applied to large complex banks since 2010 but provides also an enforcement mechanism to compel compliance when necessary. requiring higher supervisory standards for the largest and most complex banks we oversee is consistent with the dodd frank's act's broad operative of strengthening the stability of the financial system. the heightened standards address the need for comprehensive and effective risk management and engaged board of directors that exercises independent judgment, more robust audit function andry krutment and success planning and a compensation structure that does not encourage inappropriate risk taking. consistent with the heightened standards we're requiring of the largest banks, we're holding

ourselves accountable to super rizry improvements as well. i asked a team of international regulators to provide a broad candid and independent assessment of our supervision of mid size and large banks. the review identified a number of areas where we performed really well but also highlighted areas where we need to improve. the occ has embraced the team's findings and taken steps to execute recommendations that include transformational improvements. one key improvement includes expanding our lead expert program which allows us to better compare the operations of the institutions we regulate to identify trends, best practices and weaknesses. another change will improve our ability to identify systemic risk by enhancing our risk monitoring processes and reporting. and that fits squarely with the semiannual public reports by our national risk committee. those reports highlight emerging industry trends and identify those risk areas where we will focus our resources.

while the occ has taken many steps to improve our supervision of banks, we also recognize the impact of our activities on community banks. while we are focused on strong and effective supervision, we are always mindsful of the need to avoid unnecessary burden on community banks. we have responded by tailering our super advisory programs to the risks and complexity of a bank's activities. each rule making, the occ has sought and listened to the concerns of community banks. as an example, the lending limits rule provides a simpler option for small banks to use for measuring credit exposures and final domestic capital rules address concerns of small banks with respect to the treatment of accumulated income and mortgages. my written statement prize a full report on the rule makings we've been involved in in our efforts to communicate with other regulators.

with an update of our activities to shore up the industry's defense's against cyber threats which i regard as one of the most significant emerging issues facing the industry. thank you again and i'd be happy to answer the committee's questions. >> thank you. director cordray, please proceed. >> chairman johnson, ranking member of the committee. it would surprise nobody to learn that i will join my colleagues in expressing our respect and admiration for your leadership on financial reform and in this body. your obvious commitment to fair consumer markets. set an example for this bureau

and our work that i think is improving the lives of so many people across this state and across the country, and i'll always remember your personal kindness and your family in welcoming me to south dakota and having me hear from your constituents about these issues and your personal kindness in particular in advising me if i pronounce the state capital rather than pierre, that would make me a dude. this is the first agency whose sole focus is protecting consumers in the financial marketplace, and we have made considerable progress in our rulemaking, supervisory and enforceable responsibilities. our initial focus is directed by congress to address deep problems in the mortgage market that helped precipitate the mortgage crisis. we began with a series of rules that require creditors to make good faith assessments that creditors are able to repay their loans. and regulate compensation practices for loan originators among others. we have worked closely with industry housing counselors and other stakeholders to make sure

the rules are implemented smoothly and timely. we also issued a rule to consolidate and streamline federal mortgage disclosures under various laws. the new know before you owe rules are easier to choose options and avoid costly surprises at the closing table. this summer, we also issued a rule to changes to the homeowner disclosure act. we believe this presents an opportunity to limit unwanted regulatory burdens. we're working diligently to monitor the effects of our rules and make clarifications and adjustments to our rules where wanted. right now, we're pursuing further research to determine how to define the scope of statutory provisions for small creditors who operate in small or rural areas. we're also addressing pressing issues in nonmortgage markets and a series of larger rules to supervise operations and activities in other markets, and we're currently in the process of proposing rules on prepaid cards, debt collection, and payday lending. another rule to insure

compliance with federal financial loss. we have the authority to supervise not only the larger branchs but a range of nonbank companies including mortgage lenders, payday lenders, debt collectors and credit reporting companies. we made it a priority to coordinate the timing with the federal and state regulatory partners. our supervision program is helping to drive financial change that places more emphasis on treating customers fairly. we have caused many large nonbank firms to implement such systems for the first time. consistent enforcement of the laws benefits consumers, honest businesses and the economy as a whole. to date, our enforcement actions have resulted in $4.7 billion in relief for 15 million consumers harmed by illegal practices. for example, with officials in 49 states, we took action against the nation's largest

nonbank mortgage services for misconduct at every step. with 13 state attorney generals, we obtained $92 million in debt relief for service members and others harmed by company's predatory lending scheme that inflated prices for electronics. we worked for the department of justice to require an automaker to pay borrowers because of discriminatory practices, the largest amount of the federal government has secured in a case. andee took action against two of the payday lenders for various violations of the law, including the military lending act. we stand on the side of consumers and make sure they're treated fairly in the financial marketplace. we have handled 44,000 cases and

secured monetary and nonmonetary relief on their behalf. we're working on other resources for consumers to help them better understand the choices they make in the marketplace. i'd like to say that my outstanding colleagues at the bureau as well as the leaders of our federal agencies represented on this panel are strongly dedicated to a shared vision of a healthy financial marketplace and we're working together well to achieve this goal. thank you and i look forward to your questions. >> thank you. chair white, please proceed. >> thank you. chairman johnson, ranking member crapo, and members of the committee, thank you for inviting me to testify about the s.e.r.'s ongoing implementation of the dodd-frank act and our efforts to reduce systemic risk, close regulatory gaps and better

protect investors. i'm a relative newcomer to this committee, but i certainly want to add my admiration for you, your professionalism, your leadership of this committee, and your support really for all of our efforts, so thank you very much. as you know, the dodd-frank act gave the s.e.c. significant new responsibilities and included some 90 provisions that require complex s.e.c. rule making. the s.e.c. has made quite substantial progress implementing our congressionally regulated rule making agenda as we have simultaneously continued our broader core responsibilities of securing securities violations, important discretionary rule making, reviewing public company disclosures, inspecting the regulated entities and maintaining fair and efficient markets which has included a continuing review and initiatives to enhance the quality of our equity and fixed income markets. since i became chair in april of

last year, we focused on eight key areas of s.e.c. responsibility mandated by the dodd-frank act. credit rating agencies, asset backed securities, municipal advisers, asset management including regulation of private fund advisers, over the counter derivatives, and executive compensation. specifically, in furtherance of these objectives, the commission has to date created a new regulatory framework for municipal advisers, advanced significant new standards for the clearing agencies that stand at the center of our financial

system along with our fellow regulators, implementing new restrictions on financial institutions through the vocal rule. finalized rules intended to strengthen the integrity of credit ratings, reducing conflict of interest in ratings and improving their transparency. these were adopted on august 27th and implemented 14 rule making agencies. we have adopted disclosures. and completed reforms in july to address risks of investor runs and money market funds of systemic vulnerability in the financial crisis, pushed forward new rules for previously unregulated derivative, begun implementing additional executive compensation disclosure, put in place strong new controls on brokered dealers that hold customer assets, reduce reliance on credit ratings and banned bad actors from private securities offerings. since april 2013, the s.e.c. has proposed or adopted nearly 20 dodd-frank rules and thus far has proposed or adopted rules to address 90% of the provisions of the dodd' frank act that man dade commissioned rule making. in the eight categories i have identified, the bulk of our work is completed or nearing completion. our focus now is on finishing our title vii and executive compensation rules as required by dodd-frank. we have also worked closely with our fellow financial regulators to insure that our financial regulatory system works overall to protect against risks, both

by promoting financial stability and supporting a sensible and integrated regulatory framework that works effectively for market participants. the oversight counsel, established by the dodd-frank act, on which i participate as a member, serves a critical role in that effort. while the s.e.c. has made significant progress on both our dodd-frank and jobs act rule makings, more remains to be done and we must continue our work with intensity, as we do so, we must be deliberate as we consider and prioritize our remaining mandates and deploy our broadened regulatory authority, supported by robust economic analysis. progress ultimately will be measured based on whether we have implemented rules that create a strong and effective regulatory framework and stand the test of time under intense scrutiny and rapidly changing financial markets. we must be focused on fundamental and lasting reform that will protect investors in our markets and safeguard our

financial system. thank you again for the opportunity to testify today. i would be happy to answer any questions. >> thank you. chairman arsaid, please proceed. >> thank you, chairman johnson and ranking member crapo, members of the committee. i'm pleased to testify before you today on behalf of the commission. while this is my first appearance as cftc chair, i also want to add my thanks to you, chairman johnson, particularly with respect to my prior role as treasury overseeing the t.a.r.p. program. it was very unfortunate that we had to implement t.a.r.p., but i appreciate your support for all of our efforts to stabilize the

system. before i begin, i would also like to note that my fellow commissioner chris giancarlo is here. he like me is a new member of the commission. i'm pleased he's here today. i would like to review our progress in implementing the dodd-frank act, congress's response to the worst financial crisis since the great depression. we must never forget that this crisis imposed terrible costs on all americans. millions of jobs lost, homes foreclosed. many businesses shuttered. and many retirements, college educations deferred. and that's why implementation is so important. in dodd-frank, congress enacted four basic reforms of the swap market. increased oversight of major market players. clearing of standardized transactions on central clearing houses. transparent trading of standardized transactions on regulated platforms and regular reporting for increased market transparency. the cftc has made substantial progress in implementing these reforms. first, we put in place a framework for swap participants. today, 204 swap performers are

registered and we require them to adopt strong risk management standards. second, standardized swap must be cleared with a clearing house so risk can be better monitored and mitigated. in december 2007, only 16% of outstanding transactions measured by notional value were cleared according to industry estimates. last month, 60% were cleared. in addition, last month, an estimated 85% of index credit default swaps were cleared. third, standardized swaps must also be traded on a regulated platform. there are currently 22 swap execution facilities temporarily registered and volumes are growing. and fourth, rules for data reporting are in place. all swaps, whether clears or uncleared, must be reported to swap data repositories. we have four sdrs provisionally registers and operating.

and getting us where we are today, no group deserves more credit than the hard working staff of the agency. i want to publicly thank them for their extraordinary contributions. but much work remains to be done. let me highlight a few priorities. first, as we gain experience with new regulations, we will likely make adjustments to the rules. with reforms as significant as these, this is to be expected. and in particular, we want to make sure the new rules do not place undue burdens on commercial and users that were not responsible for the crisis and depend on these markets to hedge risks. we will also be mindful of their

interests as we complete the small number of remaining rules required by dodd-frank. to that end, i have scheduled a public meeting on september 17th, where we will consider a rule governing special entities like public power companies. the commission will also consider at that time a proposed rule on margin for uncleared swaps, similar to the rules put forward last week by my banking regulator colleagues here today. second, for reforms to succeed, global regulators must work together to harmonize rules as much as possible. i have been very focused on this effort since the day i took office. third, we must make sure that market participants comply with the rules. strong enforcement and compliance efforts are vital to maintaining public confidence and participation in our markets.

and fourth, technology and data management are priorities. the cftc is leading an international effort to establish consistent efforts for reporting and we'll make sure the market participants report data accurately and promptly as this is critical to effective market oversight and transparency. all of these tasks require resources. while the agency staff is excellent and we will do all we can with what we have, i believe the cftc's current financial resources are insufficient. i hope to work with congress to address this need. the united states has the best financial markets in the world, the most dynamic, innovative and transparent and they have been an engine of our economic growth and transparency. it's vital to maintaining the strong financial markets. thank you again for inviting me today and i look forward to your questions. >> thank you, all. i will now ask the clerk to put five minutes on the clock for each member's questions. my first question is for each of the panelists. what role -- what role reform rules will be finalized before the end of the year by your agency? for example, should we expect a final risk retention rule on

rural and long term debt to facilitate a resolution? governor, let's begin with you and go down the line. >> senator, i would expect that we'll finalize the financial sector concentration rule, and with respect to risk retention, interested to hear what some of my colleagues say. i don't know if i would say by the end of the year, but i think we're definitely in the homestretch. >> mr. chairman, i think the agencies have been working hard on the risk retention rule, and i think we're in the end game. and i would hope without making predictions that we could complete that rule making by the end of the year. and you mentioned the long term debt rule as you know the fdic has been working cooperatively with the fed on that rule and i'll hopeful the fed will be able to move forward in that

area as well. >> i, too, would hope to complete the risk retention rule by the end of the year. the occ is certainly committed to voting the appropriate resources to get the job done, and i hope to be able to work cooperatively with both the federal banking agencies and the housing related agencies as well. >> mr. chairman, we're not directly involved in the risk retention rule, but we take an interest in it as it overlapped our qualified mortgage rule to some significant degree. we continue to work on the humda implementation and the mortgage implementation. we'll have larger participant rules to allow us to supervise other financial markets before the end of the year and we continue work on a number of other issues that are not mandated by dodd-frank but are important in implementing its goals. >> with respect to the dodd-frank act, as i mentioned in my oral testimony, we expect to focus on title vii and the

executive compensation rules. i don't see them finished by the end of the year, but focusing on those. i expect to work with our felloz regulators in completing the risk retention rule. outside of dodd-frank, expect to pursue by the end of the year regulation sci, which is systems compliance and integrity as well

provide the fed with more flexibility to tailor rules for insurance companies. is it important for congress to enact that into law soon to provide for more appropriate rules for insurance companies? >> senator, it would be very welcome if the house would follow your lead and enact that to give us the kind of flexibility in making an assessment on the liability, vulnerabilities of insurance companies that are unique to insurance companies. we'll continue with our two tracks of planning. we're going to conduct a quantitative impact study to develop more information on insurance industries, specific

products, but it would be very helpful. thank you. >> chairman, in august, you announced that the rules for the 11th largest banking organizations contain important shortcomings. you have given each of these banking organizations until july 1 of 2015 to submit a resolution plan that addresses the shortcomings. what will your agency be doing in the next year to monitor these banks and their efforts to address their living will shortcomings? >> well, mr. chairman, as i indicated in my opening statement, we've in effect now given each of the 11 firms a detailed road map of changes they need to make to improve the resolvability of their firms.

and we anticipate, by we, i mean the fdic and the federal reserve, which works together jointly on these letters to give the firms direction and guidance to follow through on compliance, and implementation of the directions contained in those 11 letters. >> senator crapo. >> thank you, mr. chairman. i, too, in my first question want to talk to each of the agencies. but i'm going to do it in segments. i'm focusing in this question on the economic growth and regulatory paperwork reduction act. which, as you know, has requirements in it for reviews that are statutorially mandated to evaluate existing regulations to identify outdated, unnecessary or unduly burdensome regulations. it was actually this act that we used some years back when we made some very good progress working with many of you to pass a significant regulatory relief act. and i understand that the

federal reserve, the fdic, and the occ are already well into and have been going well under way and are going down the road of doing this, so my first question is to the three of you, which is, will you commit that your agencies will provide us with a list or a table of regulations that fit this category that we could evaluate for regulatory reform purposes and specifically with focus on community banks? >> mr. chairman, i'm currently the chairman of the ffic, which is overseeing the process, and i think our objectives are totally in tune with your objectives that you stated today. the focus of our review of unnecessary or burdensome rules is really focused on community banks. >> good. >> we're also looking to make sure that we get adequate input from community bankers directly

so we will be holding a series of outreach sessions throughout the country to take in that information. and then ultimately, we do intend to do two things. one, to make make changes that we have complete control over in terms of regulations and policy statements, but also to file a report with congress in which we would make recommendations for appropriate statutory changes. >> thank you. >> i think the process actually offers the agencies a nice opportunity to take an overview of the regulatory compliance issue. and identify opportunities both for addressing unneeded regulatory requirements as well as opportunities for any statutory change. i think this has been a focus of the attention and priority certainly for our three agencies as the controller indicated, we're planning a series of public hearings around the country. i think we'll be participating directly in some of those hearings and we view it as a good opportunity to take a broad overview of this. >> thank you.

governor? >> all right, thank you very much. then to the other three, as i understand it, the cfpb is covered by this law also but the timing is not necessarily kicking in at the same timeframe for the cfpb, and they're not technically under the law, but my question is regardless of that, will you pursue the same process and help to provide us with your evaluation of the kind of unnecessary or unduly regulatory burdensome regulations that we have and in particular with regard to community banks? >> i'll simply say i'm part of the ffiec, and we're following as the comptroller indicated, as chairman of that body, his lead on reg review. we have our own statutory provision that requires a

five-year look back on all the rules they promulgate. we have been actively engaged looking at the mortgage rules looking to see if there are tweaks that we need, and we had our streamlining initiative that led to the atm stickering issue. and we provided technical assistance on that, and relief on privacy notices which is coming very soon in final form. >> thank you. >> senator crapo, correct, i don't think the statute applies to us, but i'm very much committed to reviewing our rules in that fashion. we also have obviously in constant contact with those who our rules impact. our rules don't generally have as much impact on community banks.

one of the other things i have tried to do since i became chairman is review our major rules, both jobs act and dodd-frank and others as they come out the door so we're making changes, making them more efficient, stronger as we go. >> thank you. mr. massad, could you be real fast? >> certainly. we agree with the goal, and we'll be happy to work with your office on it. >> thank you. i appreciate that. my next question is for the governor. governor, in your testimony and the speech at the annual bank structure conference, you called for raising the trigger with a bank is systemically important for $50 million. i would like if you would, please, to expand on your thinking because i agree with you strongly on that. i hope we can make progress in this area. >> senator, i think we have had the benefit now of several years of testing under both stress testing under dodd-frank and also our capital requirements assessment process. and i think we've just concluded that given the intensity and the

complexity of the work around the really good stress testing, which we believe is necessary for the largest firms, we haven't felt that the additional safety and soundness benefits of that really are substantial enough to warrant the kinds of expenditures that banks above 50 but well above the largest systemically important institutions have to expand. their balance sheets are pretty easily investigated by us. and their lending falls in a fairly discreet number of forms, so in thinking about it, we just thought that having some experience put us in a better position to make that judgment and that's why i mentioned it in the chicago speech. >> thank you. i think your observation is very well taken and is one of those examples of what i'm talking about here today as well. where we need to find places where we can resolve some of these unnecessarily burdens that are causing difficulty. thank you.

>> senator schumer. >> thank you, mr. chairman. thank the witnesses. now, as we speak, the treasury secretary and secretary of transportation are holding a summit with leaders across the country to encourage grater investment in infrastructure projects, but unfortunately, the administration's efforts to promote greater investment in infrastructure fly in the face of rule making finalized last week by the fed, the occ, and fdic, by excluding municipal bonds to be considered as high quality assets, federal regulators have run the risk of limiting the scope of financial institutions willing to take on investment grade financial securities which we know are the life blood of development in the country. my city and state, new york city and state, rely on this financing to build roads, bridges and start construction in schools, but it's not just new york. any city or state that have made tough decisions to protect their credit ratings, chicago,

philadelphia, california, are susceptible to the impact of this rule. investment grade municipal bonds not only serve as a mechanism through which we're able to create jobs and finance critical infrastructure but the assets that adequately cover liquidity outflows in periods of stress. i support regulatory efforts to make sure the banking section is able to absorb shocks in time of financial and economic stress as well as enhanced liquidity, but i have not yet heard a convincing argument why for instance corporate debt can be considered a high quality assett, but investment grade municipal securities cannot. investment grade municipal bonds have comparable if not better trade volume and price volatility and they performed well through the financial crisis. in fact, in 2008 and 2009, price declined on aaa corporate bonds were greater than the price declines on both aa municipal general bonds and revenue bonds and this doesn't even touch on the fact the new rule permits

foreign sovereign debt to be qualified while these municipal bonds are not. and the liquidity coverage for banking institutions has the potential for states and municipalities to both increase the cost of interest payments and decrease investment by the largest banking institutions in infrastructure. now, more than ever, we should be wary of blunt policies that have the potential to negativity impact the municipal bonds market and ultimately jobs. the debt issuances from certain states in local municipalities are considered high quality liquid assets by markets and should be treated as such under the rule. developing criteria to assess liquidity and performance of various municipal bond offerings is a more narrowly tailored approach that was absent from the rule finalized last wednesday. i hope all three agencies will reassess the finalized rule and issue supplemental rules that appropriately account for these

instruments. here are my questions. first, governor, i know this rule is something you have looked at closely. i was particularly struck by your comments last week in which you acknowledged that, quote, staff analysis suggests that the liquidity of some state and municipal bonds is comparable to that of the very liquidity of corporate bonds that can qualify as hqla and indicated the staff has been working on some ideas. determining criteria for such bonds which might be considered for inclusion. would you mind discussing what type of ideas you believe are appropriate? and specifically, whether these ideas would allow for greater flexibility so that certain investment grade municipal bonds could be considered high quality liquid assets. and then after you opine, i would like to ask the chairman and controller if they think a rule that provides greater flexibility in this area would be something that is important to look into.

>> thank you, senator. as you noted, we, the board, asked the staff to prepare a proposal that would allow for recognition as high quality liquid assets those state municipal bonds which are in the same league with very liquid corporates. and what we have asked the staff to do is an analysis of the liquidity characteristics of state and munis, taking into account daily trading volumes. there are some differences in those markets, but our analysis during the course of the comment period suggested that there ought to be a way of identifying the more liquid state and munis because if they are really

liquid, we really do want banks to be able to take that into account in thinking about their maturity length. >> you want some comparability here and you don't want to lump all municipal bonds in one pot? >> that's correct, senator. >> okay. chairman gruenberg? >> senator -- >> the question to you is would you consider revising this rule if the analysis shows that the liquidity levels are similar? >> short answer is yes, senator, and i indicated my remarks at our board meeting we would monitor carefully the impact on the market and if there was reason to make adjustments we would consider adjustments. >> we have loads of our mayors and financial directors as well as governors are howling about this. so they really think it will impact their markets and they're experienced to know. how about controller curry? >> senator, we're certainly looking forward to discussing with the fed any additional research or thoughts they may ñi]r if there's a possibility to ñi]r calibrate a standard that

our friend mark warner and i worked on title i and ii. and amy friend changed it a little bit, but it's still pretty good. and i want to focus on those two areas.

actually think it was some of the strongest pieces of the dodd-frank bill. and i notice that the fdic and the fed had a joint letter relative to the living wills. i will say in fairness senator warner was far more focused on the living wills and i appreciate his efforts in that regard. but i notice that you had a joint statement and then what happened after that is the fed backed away from that. and wrote something separate from the joint letter that really watered down, if you will, your concern about living wills. which created a concern for me, but i know there's a process that gets put in place if both of you agree that they're inadequate and therefore by stepping away, that has been watered down to a big degree, and i'm just curious as to why that took place and both of you might want to respond to that. >> senator, i didn't see any watering down of the impact of the letters that we agreed on and jointly sent out.

what we jointly agreed on were the measures that we actually want the banks to take in order to become more resolvable, which i think is the object of this entire exercise. and so far as i could determine, there was substantial convergence, certainly at the staff and principal levels on those areas where we expect to see progress. there was a question as to whether i think the difference was the difference was the fdic made a determination of noncredibility of the letters that had been submitted already. the feeling at the board was that there are obviously shortcomings. that's why we wanted to get the specifics out, but we also thought it was important to go through another stage of the iterative process that had been laid out in our reg. and i think it's contemplated by the statute because that, after all, is the object here, to get

us to the point where the firms are resolvable in bankruptcy as well as under a title ii, as you will note in our statement, the fed's statement and also in the letters, if the firms are not able to take the steps that we have jointly indicated they need to take, by next july, the agencies will be prepared to take action under dodd-frank in order to enforce those provisions. and so i think by doing that, by being as specific as we were, we have been -- i think we should put to rest any complaints that there wasn't enough guidance from the agencies along the way. i think the guidance is out there now, and it's quite explicit. >> but it does have the effect, does it not, of really slowing down and putting off the institutions taking the steps they need to take to simplify --

there is an iterative process, as you mentioned, and i think by doing what the fed did, you added a step to that, did you not? >> well, i think actually, i think what we did is we focused on what we actually want them to change. we made it pretty clear, we want a change in the next year. so i hope there's no slowdown here. we're certainly not expecting a slowdown. on the contrary, we're expecting acceleration in their planning and them to do it with more realistic assumptions than they did in their prior submissions. >> one of the things that i think there have been concerns about is, you know, you have been -- fsoc has been given tremendous powers to deal with these entities. if you feel like there in fact is any possibility that because of their size or complexity they could create a risk to the system, and i just want to ask the two of you, i know we have asked in letter form, several of us.

we have gotten back, as we might expect, somewhat nebulous responses, but is it a fact or is it not, will you use the powers that are given to you if these firms -- if you find themselves after this year process not in place to be resolved appropriately through bankruptcy, will you take the measures that you have, many people are trying to pass legislation, but you already have powers within the organizations to take steps and force them to be less complex. will you do nat? >> sure, senator, that's the object of the process, to get them to the point of resolvability. as we indicated, we are prepared to use the powers granted in dodd-frank if in fact they don't get there. i might also add that the things i mentioned this morning, the higher level of surcharges for the most systemically important institutions, the attention to the short-term wholesale funding capabilities and the subdebt that can be convertible are all

measures intended in the same direction, which is insure the resiliency and resolvability of these institutions. >> senator, if i could just add, i think the answer to your question is yes. i think we will be prepared to use the authorities of the statute. i think we have laid down a clear marker. the fed and the fdic, for these firms, in terms of the kinds of changes that need to be made. and if i may, i would underscore the agreement between the two agencies on the substance of the letters. which i think was really very solid and meaningful. and i think the firms are clearly on notice that there's an expectation of compliance with the directions and the letters and i think there's a joint commitment by the two agencies to follow through on that. >> thank you. and mr. chairman, i appreciate the time. i will say a big part of the

concerns that were expressed during that time and the passage of the bill was about the extraordinary actions that we and the american people had to take during that time, and unless you, especially the two of you, are willing to take the steps that are necessary to insure that these organizations are not too complex to be resolved through bankruptcy, then all is for naught. i hope you will. i thank you for your work, and i appreciate the time, mr. chairman. by the way, thank you for creating a bipartisan atmosphere on the committee, too, sinceably is apparently thinking you're going to be chairman of the universe after this. >> senator menendez. >> thank you, mr. chairman. madam chair, you and i have on previous occasions discussed the ceo pay ratio provision i oped in the wall street reform law which requires companies to disclose the ratio of compensation of the chief executive to the pay of medium workers. this measure focuses investors'

attention on the relative value a ceo creates in order to provide better checks and balances. and while ceos can undoubtedly create value for companies, so can ordinary workers across an organization. so when a ceo asks for a raise while giving other employees a pay cut, investors should have this information so they can ask whether this is a value creation or simply value capture by insiders. especially in an environment in which incomes for the top 1% have grown by more than 86% over the last 20 years while incomes for everyone else has grown by less than 7%. as you know from my letters of support, i was pleased to see the s.e.c.'s proposed rule last year to implement this provision which in my view accurately reflects the legislative intent

that i and others intended. can you please give us an update on the status of this rule making and when does the s.e.c. expect to finalize it? >> essentially, as i think i said in my oral testimony, we are focused, the balance of this year in terms of our dodd-frank mandated rule makings on title vii and executive compensation, pay ratio is one of those that has been proposed but not adopted. it is certainly a priority to complete it this year. >> so it's your expectation that you would complete it this year? >> it's my hope and expectation to complete it this year. the staff is still going through the comments, which were extensive, and finalizing a formal recommendation, but that is my expectation. >> i hope there will be more expectation and less hope. let me turn to chairman white. this summer, the s.e.c. received its record 1 millionth public comment supporting a rule to require public issuer companies to disclose their political campaign spending to investors. supporters include leading academics in the field of

corporate governance, van guard founder, investment managers and advisers and the investing public. without disclosure, corporate insiders may be spending company funds to support candidates or causes that are adverse to shareholders' interests without shareholders having any knowledge of it. the amounts being spent may be small or large, but shareholders have no way of knowing. even where the amounts of small relative to the overall size of the company, the impact on an election and therefore on shareholders can be large. if corporate spending is material to investors as the leading experts in the field in over 1 million members of the investing public believe it is, why isn't the s.e.c. requiring

public issuer companies to disclose this information? do you have any plans to engage in a rule making on this issue anytime soon? >> the -- as you know, we have two petitions actually still pending before the s.e.c. to require such disclosure. if in fact in a particular company there political spending is material under the law, that would under the law be required to be disclosed now. the petition is broader than that. again, as i believe the senator and others are aware, we're very focused on our mandating rule makings under dodd-frank and the jobs act. and we don't -- the staff is currently not working on a proposal in that area. i do note that a number of companies have voluntarily made those disclosures. and that subject can also be, and often is, a subject of a proxy proposal. >> well, i appreciate where you said your focus is, but when one million, i think it's very rare that you get one million public comments in support of a proposal.

and even if you look at justice kennedy's majority opinion in citizens united which opened the floodgates for corporate election spending and presumed that shareholders should have -- it was presumed in his opinion that shareholders would have transparency in order to enforce accountability over executives. so how is it that investors have control? have that transparency, if they can't even get basic information about what is being spent? >> i appreciate the intense interest of investors and others in this issue. i mean, clearly, the comment letters, there have been many. they have been on both sides, and it is an area that i'm quite sensitive to that it is of high interest, but as i said earlier, at this point in time, it is not part of our current regulatory agenda. we're focused on the mandating rule makings. >> i appreciate that as someone