out clear rules of the road and ensuring transparency and fair dealing, we will actively promote a more vibrant mormarke. let me the list of proposals for you. first, we propose a set of reforms to require regulators to look not only at the safety and soundness of individual institutions, but also for the first time at the stability of the financial system as a whole. one of the reasons this crisis could take place is that while many agencies and regulators responsible for overseeing individual financial firms and their subsidiaries, no one was responsible for protecting the whole system from the kinds of risks that tidies firms to one another. . .

there was no system in place that was prepared for this kind of outcome, and more importantly, no one has been charged with preventing it. we were facing one of the largest financial crises in history, and those possible for oversight were mostly caught off guard and without the authority needed to address the problem. it is time for that to change. i am proposing that the federal reserve be granted new authority and accountability for regulating bank holding companies and other large firms that pose a risk to the entire economy in the event of failure. we will also raise the standard to which these kinds of firms are held. if you can pose a great risk, that means you have a great responsibility. we will require these firms to

be stronger capital and liquidity requirements so that they are more resilience and less likely to fail. and even if we replace the authority to regulate these firms in the hands of the federal reserve, the lines of responsibility and accountability are clear. will also create an oversight council to bring together regulators from across markets to coordinate and share information to identify gaps and regulators and tackle issues that do not fit neatly into an organizational channel. we're going to bring everyone together to bring a broader view and a longer view to solve problems of oversight before they can become crisis. as part of this effort, we're proposing the creation of what is called resolution authority for a large and interconnected financial firms so that we are not only putting in place safeguards to prevent the failure of these firms, but also a set of orderly procedures that will allow us to protect the economy if such a firm does in

fact go under water. think about this. if a bank fails, we have a process to the fdic that protect depositors and maintains confidence in the banking system. this process was created during the great depression. the failure of one bank led to runs on other banks. it works. we do not have any effective system in place to contain the failure of the aig -- of a aig. when this crisis began, crucial decisions about what happened to companies took place in emergency meetings in the middle of the night. that is why we have relied on taxpayer dollars. we should not be forced to choose between allowing a company to fail or to support the company with taxpayer money.

that is an unacceptable choice. there is too much at stake, and we're going to change it. second, we're proposing new and powerful agency in charge of just one job. looking up for ordinary consumers. this is essential. this crisis was not just the result of decisions made by the mightiest of financial firms, it was also the result of americans wanting to open credit-card, take on home loans, and other financial obligations. we know there were many that took out loans they knew they could not afford. there were also millions of americans who signed contracts they did not always understand offered by lenders who did not always tell the truth. even today, folks sign up for student loans, mortgages, or credit cards and face a bewildering an array of incomprehensible options. companies compete by offering more complicated products and

more hidden terms. this new agency will change that, building on credit-card reform that i signed into law a few weeks ago with members of congress. this agency will have the power to set standards to the companies compete by offering innovative products that consumers actually want and actually understand. consumers will be provided information that a simple, transparent, and accurate to be able to compare products and see what is best for you. the most unfair practices will be banned. those ridiculous contracts with pages of fine print that no one can figure out, those things will be a thing of the past. enforcement will be the rule, not the exception. for example, this agency will be empowered to set new rules for home mortgage lending so that the bad practices that led to the home mortgage crisis will be stamped out. mortgage brokers will be held to

higher standards. exotic mortgage is the height exploding costs will no longer be the norm. all mortgage disclosures will be reasonable, fairly written, and concise. we're going to level the playing field so that non banks that offer home loans are held the same standards so that lenders are not competing to lower standards but rather are competing to meet a higher bar on behalf of consumers. the mission of this new agency must also be reflected in the work we do throughout the government. there are other agencies like the federal trade commission that is charged with protecting consumers, and we must ensure that those agencies have their resources and the state of the art tools to stop unfair and deceptive practices as well. third, we're proposing a series of changes designed to promote free and fair markets by closing gaps and overlaps in our regulatory system, including gaps that exist not just

within, but between nations. yes any structural deficiencies that have allowed some countries to shop for the regulator of their choice. others, like hedge funds, operate outside of the regulatory system altogether. yet seen the development of financial instruments like derivatives that are so complex as to defy efforts -- lenders have provided loans to borrowers that would never repaid because the lender offloaded the loans. they offered the consequences to somebody else. as part of these reforms, we will dismantle the office of thrift supervision and close loopholes that have allowed institutions to cherry pick. we will offer only one federal banking charter, regulated by a federal supervisor. we will raise capital requirements for all depository institutions.

hedge fund advisers will be required to register with the sec. we're also proposing comprehensive view -- comprehensive regulation of credit default swaps. the lender and not just the holder of a security has an interest in ensuring that the loan is actually paid back. by setting common-sense rules, these kinds of financial instruments can play a constructive rather than destructive role. over the past two decades, we have seen, time and again, booms and busts. many people have had their lives profoundly disrupted by the developments in the financial system, and most recently in our most recent crisis. this is a child puts the chance to get an education. this is a family's opportunity to pay their bills.

this is the opportunity to retire in dignity. these are american dreams. we should not accept -- -- we should not accept a system that does not allow for that. we will manage risk carefully. as president, i have a responsibility to ensure that our financial system works for the economy as a whole. there has always been a tension between those that placed their faith in the invisible hand of the marketplace, and those who place more trust in the guiding hand of the government. that tension isn't a bad thing. it gives rise to help the debates and creates a dynamism that allows us to adapt and grow. we know that markets are for it -- are a force for either good or bad. the aggregate of countless independent decisions, we see potential for creativity and the

potential for abuse. we see the capacity for innovations that make our economy stronger, and for innovations that exploit our economy's weaknesses. we're called upon to put in place those reforms that allow our best qualities to flourish. while keeping those worst traits in check. the market is the most powerful generative force for our prosperity. it is not a free license to ignore the consequences of our actions. this is a difficult time for our nation. from this period of challenge, we can lead the global economy. it is how we will help more americans. that is why these reforms are so important. i look forward to working with leaders in congress and all of you to see these proposals put to work so we can overcome this crisis and build a lasting

foundation for prosperity. thank you very much, everybody. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2009] ñxñxñx >> reaction to the president's announcement came from barney frank and banking committee chairman chris dodd. this is 15 minutes. >> we have been in pretty constant discussions with the

administration from the beginning. i am fairly optimistic that we're going to have a product that looks a lot like what the president wants by the end of the year. there is a congressional process. not everything will come out the same way, but the fundamental purpose the president is seeking to accomplish will be embodied in a bill that we can get signed by the end of the year. >> i agree with what bahrain just said. the president laid out a set of sweeping reforms for the -- i like how he framed it. closing the gaps that led to a lot of problems we're wrestling with today and also making sure that we design the system that is going to invite creativity and imagination into our financial services sector. it is not always the easiest path to walk, to make sure you have is some that inspires safety and soundness while

simultaneously encouraging the kind of ideas that led to the wealth creation that has been such a hallmark of our financial services sector. chairman frank and i agree that we are excited about working on this. i see very little ideological debate that so often dominates our discussions on other matters in congress. we have had extensive conversations with dick shelby, the republican chairman of the banking committee. he is very anxious to work together with us on this. i think barney has described it very well. there has been some debate as to how we achieve these results, but we're all seeking the same results. to that extent, i welcome the president's remarks this morning. i want to emphasize that while there are other matters dominating the attention of the senate right now, the senate banking committee is working on

drafting ideas and proposals in consultation with barney and the white house on deep -- on the part -- on the proposals the president made this morning. >> [inaudible] >> they have a great -- they have threatened us with a severe chastening. this is very pro market. you have investors who do not want to invest. that is not good for the economy or the businesses. you have a great majority of perfectly responsible people under competitive prices who want to cut corners. this is in an effort to avert the kind of problems we have had before and to fully reinvigorate this market and away that is going to be pro market and pro consumer. unless you have got investors

that are well protected, you do not have a market. >> on the markup of the health care bill, how can you do two things of this magnitude at virtually the same time? >> as i mentioned, it takes the leadership -- and nobody wanted senator kennedy back more than i did. i had a long conversation with him this morning. we're working together. it is going to be a difficult process, a long process and the coming weeks. simultaneously, the banking committee, its members, the staff, and others are working on drafting and putting the other a proposal along with barney on the financial market -- financial modernization issues. the president will not consider

it until the fall sometime. if we can do both at the same time -- half of all my members on the democratic side are members of the finance committee and the labor committee. in addition to myself, i expect members to be able to function. the point i want to make is, i have instructed my staff, i have talked to senator shelby, we're working on pulling together the product. >> i apologize. gerald ford was a bright guy. i could not resist. the house and the senate are obviously differently constructed. the house as your responsibilities in terms of across the board. we have collaborated on a mortgage foreclosure and funds in a way that, given the nature of it, a number of these things

can be done by general agreement. we get to a point where there are some specifics that have to be dealt with. if you look at the pattern, and has worked very well. the house gets an earlier start because of the nature of the institution. we then get to a point where the number of things -- consensus forms and the society. the number of issues that have to be decided narrows some. there is a joint process for the senate and house does it. you'll see the same thing. but the with a credit card bill came. but the way we did some of the mortgage " -- a mortgage foreclosure things. you'll see a similar process. >> doesn't go far enough and appease the community? >> as i understand, it goes as far as it can legislatively or legally. the president has done the maximum he has allowed to do

under the law. it is up to the congress to change the law. >> given the concerns -- >> our intention is to keep going forward. my experience is, unless you have a product and the amendment process begins -- without that, you did not get the ideas back and forth. you never get to the conclusion. you have to begin the process. we talk all the time, our staffs are working. i'm confident we can have our product. >> i have an important question on the federal reserve. it is a very important question. he started with an agreement and bills to increase it. there was an agreement on the function. the function is systemic risk. in the house, it is partisan.

my republican colleagues said a systemic risk is fine the way it is, the way we deal with it. they do not need any resolution powers. we have an agreement that we have to do something about systemic risk. the fed has to play an important role, and there has to be restructuring the way that the -- the rate that regulators are involved. herbert hoover landed out money -- landed out money -- lended out money. how you have an effective agent on systemic risk regulation -- a structure that gives you assurance that is done in a kind of collegiate way. that is an issue we will be working on. >> is there concern giving the fed so much power?

>> clearly the role for systemic risk, we need. my view is that there is a strong and healthy debate having the fed do this. this is a known quantity. they have the expertise there to do it. the primary function is to deal with monetary policy. they can assume that responsibility without bringing some bias to the discussion. i appreciate the fact that the administration has adopted the idea of the council and all this. it is a step in that direction. i am not embracing the collegial alternative, but i think it is worthy of a full debate and discussion as to whether or not as a better alternative. there is not a lot of confidence at this point. i hear that expressed by members of my committee, both democrats and republicans that are looking for an alternative. there has been no decision.

there is a general consensus that as systemic risk regulators -- >> the question is, can you finally to have an effective agent? the fed will be leading candidate for it. it is our job to try and work that out. >> [inaudible] >> no, because we have not gotten to that yet. i think there is a general agreement that, for instance, this proposal is that treasuries should have the sign off on it. -- to sign off on it. those of think that is sufficiently collateralized -- they should have the sign off on that. those will be under consideration. yes, we have a hearing coming up on the legislation.

the chairs of the committees on oversight and monetary policy -- there will be increased auditing and transparency. >> what is the schedule at this point? >> we will start marking up in july. we probably did not finish marking up, but will mark of seven bills and consolidated. it will be marked up in july. compensation is very important. consumer product safety. financial product safety. probably the regulation of derivatives, those things. >> and the whole thing comes together when, september? >> yes. >> in a few moments, republican members of the house and white house chief of staff rahm

emanuel discuss plans for the future of health care. in a little less than an hour, attorney general eric holder talked about a variety of issues including guantanamo bay detainee's. later, president obama announces new plans to regulate financial institutions. on "washington journal" tomorrow morning, will discuss the situation in iran with a scholar from johns hopkins university. we will hear from two members of the house financial-services committee, republican jed h ensarling and republican luis good year as. "washington journal -- gutierrez.

"washington journal" is live every morning at 7:00 eastern. live coverage of health care legislation markup is on thursday. >> every weekend, "book tv" has the latest nonfiction books and authors. writers and artists, gods and visionaries, from the garden of eden to today. eduardo galeano with a collection of short stories. he talks with john dingus. also sunday, books on the economy. former investment maker john talbott exposes the myths about the recession and what it will take to recover. then, j. richards on why he thinks capitalism is the best way to ease poverty and protect the environment. also this weekend, the end of overeating.

david kessler explains why americans can control their eating habits. there are lots more books and authors this weekend on "tv." our web site has the entire schedule and a great new features and dark eyes that are easy to search. booktv.org. >> now, house republicans outlined their health care plan calling for universal access to insurance while rejecting the concept of a government health insurance option. health care legislation is being debated in house and senate committees. this is half an hour. >> a good morning, everyone. president -- republicans want to worke to make sure that all

americans have access to health insurance. i want to congratulate roy blunt and all of the members of the healthcare solutions working group that are here with us today. they have worked for months on making sure that we have a plan that will accomplish the goals the president and the democrats all agree on. if you look at the plan that will be unveiled this morning, we take the current health-care system and improve it to make it work better for all americans. it will provide easier access to those who can't afford its and make sure all those -- if you look at this plan, it really will ensure that most americans -- it really will improve the quality of our health-care system. it will maintain the innovation we have in our current system. will understand we have the best health-care system in the world.

90% of the world's innovation and health care comes from the united states. as we proceed, we have to be very careful that we do not do anything that will impede the kinds of quality and innovation that we have in our current system. we believe that our plan is a big improvement on the current system that will cost far less than what the administration is proposing. if you look at their plan, it really is a big government run plan that will help take control of the delivery of health care in america. i do not think that is what most americans want. families and small businesses are looking for access. let's work on the problem and improve the current system so it works better. this is a serious proposal. we're hopeful that president obama and our democratic colleagues will take our ideas seriously and use them as they begin to develop their programming. everything we have seen thus far, whether it is the stimulus

bill, the omnibus appropriations bill, they think they have better solutions. we will continue to offer better solutions. we found ourselves in a position of having to say no, having to be in opposition to what the president or our democrat colleagues wanted to propose. it was our obligation to come up with what we thought was a better solution. this is clearly a better solution for american families and small businesses who want better access to health care. >> good morning. i want to recognize roy blunt and his leadership on the health care solutions working group, working with our other ranking members to come up with a better plan. health care in america is about choice. at its core, it is about american families having the ability to choose the health care that best meets their needs. as we saw this week, the

congressional budget office said that the democrats' plan will cost an mmm -- will cost at a minimum, one trillion dollars -- $1 trillion. maybe a third of the current insured will go on covered. as broken down, that is well over $6,500 per person to ensure that we know -- we know right now that the average cost is less than $5,000. clearly, the government plan is not the answer. our republican plan is sorely needed. we have got to come to a consensus on how we implement health care reform in a reasonable fashion that is responsible in terms of taxpayer expenditures and delivers on what the american people want, which is twice in their health care. we do that,