institutions -- speed bumps. if we have to pass that, how week on 11 of these institutions? ending taxpayer bailout. no. 2, we want to make sure this very complicated area, we want to bring a lot more transparency to this marketplace. so that there is an ability for people who invest in the stock market to be on that relative level playing field with some of the big wall street firms. . .

and back in the 1930's, the last time we overhauled the financial rules, those rules stayed in place for the next 60, 70 years. maybe too much say we are going to create rules, but we hope to create rules for decades to come. >> a couple of weeks ago, the parties were accusing each other of allowing too big to fail to continue or not having an approach. how can americans be ensured this is going to be air tate and that taxpayer money won't be put at risk. >> we are going to do everything

we can that will be overwhelmingly supported by senator boxer from california that says no taxpayer monies can be ever really put at risk. i think the bill does that. but if there are ways to strengthen it, i'm for it. one of the things i have been frustrated in the debate is we focused on what happens if we -- if we have to we have to put one of these firms out of business. hopefully the process of bankruptcy will work and we won't have to use resolution authority because we are going to require these large firms -- and it's not just size, but risk taking, but we are going to require the larger firms to have added capital requirements and look at their leverage rates so every dollar of equity. we are going to look at the risk management plans much closer.

going to create two new categories of hurdles that these large firms will have to deal with. one will be a whole new area in their capital structure of contingent debt that will funds they raise will convert to equity and dilute shareholders so it will be a check on management on taking too risky behavior and require these firms to work with their regulator to show how they would put themselves out of risk through bankruptcy in an orderly way and if they can't prove that, this early warning system will be able to actually break up some of these firms. so i wish my colleagues would spend more time on focusing on resolution. and there are different ways to go about it. i know chairman dodd and senator shelby are looking at trying to tighten it up in a little bit. and there may be ways where some

of the initial ideas will change, but the industry, financial industry will pay for any resolution, because you need to make one -- i use these terms -- you got to have some money available so you can keep the firm alive long enough to put it out of business in an orderly way. you can't have what we had in 2008 where there was a panic in the market because everybody tried to grab their assets because they didn't know how the firm would unwind. you have to an orderly way to put the firm out of business. and at the end of the day where they are present-funded after the fact, they have to pay for that. >> the animosity towards wall street. do you think that is unhealthy and do you think wall street has shown hue mill ti as this bill has been debated? >> yes and no. i think there is some of the rhetoric has been a little

overheated. we want to remain the center for capital markets for the world. we want to make sure that whether you are a start-up entrepreneur the way i was 30 years ago when i was starting, a small business that needs the flow of capital to keep the economy moving and we can sometimes demonize wall street which is the center of our capital mashts. but at the same time, part of that has come about, because i have to tell you as somebody who is familiar and actually believes the financial services sector provides a critical part of our economy, i have been so frustrated there has not been a level of recognition that almost all of these firms were in jeopardy of going out of business back in the fall of 2008. and if the american taxpayer hadn't put up $700 billion in funds, to help get them through this crisis, the crisis that the taxpayers didn't create, and now we have the firms saying we

didn't need the money and it wasn't that important, baloney. and i have been as a pro-finance sector guy, biff been saying thank you and a little bit of sensitivity that as the capital markets have returned and the dow has gotten back to 11,000 and there has been a real lack of sensitivity in the sense of well, if -- the markets are back, well, back to the glory days of large bonuses and this refreezing rain, well, if you do -- refrain, well if you do something, they will move back to shang high, it has been an enormous pip hair aappreciation for the kind of disspruppings that this financial crisis continues to cause for american families. >> when you are talking about

anger towards wall street and the financial industry, weeks ahead, people are expecting a locality of debate. a lot of amendments to breaks up big banks and big banks spin off their derivative units, efforts to audit the fed, talk about those and how you manage to have a full date in the senate on such a big bill and also stay clear of things that -- that's one of the reasons i want us to have a bipartisan effort. you can have pop you lism from the left and the right. and i know and i can sympathesize with some of the anger and this attitude of retribution in some case. but if we are going to get to the goals, let's put rules on the road that can stand the test of time.

what we don't want to do 18 months after the crisis end up creating a set of rules that doesn't allow america to be that capital market center of the country, that in effect slows the flow of capital out to main street, that allows the next generation of entrepreneurs -- i was in the telecom business, access to capital markets, that helps create jobs. and we want that to continue. i think, for example, that the attack on size alone -- i understand it, but i'm not sure that's the right focus. the right focus should be risk-taking. canada has a much more concentrated financial industry than the united states does. and yet, they didn't experience near any of the crisis because they had a better regulatory system or a more focused system that looked at leverage and risk

management. out of the top 10 banks in the country, -- in the world, we only have one. we don't have a single american bank. and out of the top 50 banks, we only have four american banks in terms of size in the world. so size alone hasn't meant the concentration of -- hasn't precluded america from being the capital market center. i'm not sure size is the right criteria and we will try to make that case and both sinds will counter. those are healthy debates. >> you used the phrase crisis that the taxpayers didn't create. some levels of taxpayers were a party to it, some people who bought houses that they couldn't afford or used their houses as piggy banks when they went back. what is your philosophical role

about how much risk people can take on themselves? >> that is a great question and i think while a lot of the anger is directed at wall street, all of us, all of us need to look in the mirror a little bit as well. we got overleveraged. families who took out mortgages they knew they couldn't afford. i remember trying to talk to one of my siblings, don't take out that adjustable rate mortgage and it's going to pop up a few years later. but there was this immediate, hey, the note is going to smaller in the first year or two, not everyone had the wealthy barber to bail them out. so i do think consumers and businesses got overlerged as well. traditional rules the economy got thrown out in the last eight

or nine years with the exotic products with better pricing risks that we ended up finding at the end of the way -- created greater risk than actually lowering risks. so the responsibility, though there has to be some level of broader buyer beware. wife to have more transparency. if we have practices about products c.e.o.'s of the institution didn't understand, there has to be a consumer watchdog. there has to be a sense of personal responsibility because the government can't bail out every wrong business decision. the economy has been that businesses fail. they should be allowed to fail. what we are trying to do with these larger institutions is give them a path to failure in a way that doesn't bring the financial system to its knees.

getting that balance right between personal responsibility and making sure that the consumer has enough knowledge to sort through this is something that we are going to have to struggle through. >> consumer protection is where democrats and republicans have been at odds and there have been a lot of efforts to find middle ground but there isn't a lot of support from the republicans. how difficult is it to convince americans that this plan will protect them from exotic harmful products but allow capital to flow through the system. >> you are right. and that's why again we hear some of the rhetoric on both sides. i have yet to see how this bill is going to affect the dentist, which is some of the concerns i have heard. yet, on the other hand, i think there is a very real possibility that this consumer bureau that is going to put out some of these rules, they will need to

be a review and appeals process. i hear a lot from my smaller banks in my state and around the country, a lot of these community-based banks that in most cases didn't create exotic products and operate on relatively thin margins and they have a fairly good amount of regulation, so the notion you will a regulator come in on monday and wednesday could provide a conflict that i don't think is healthy. trying to get right the enforcement process that doesn't overburdensome of these smaller institutions, trying to make sure if there is a way that that dentist who is putting a payment plan in place for a patient's kid's plan, it doesn't fall through. i actually still think there's a way to find common ground here. i have yet to hear my

republicans who say we don't think we need enhanced financial productions. i have not heard anyone fl the banking industry who says we need stronger financial rules particularly for 2/3 of the financial sector that is currently not regulated, pay-day lenders, on a level playing field across the field. what i hope we end up doing is looking at financial products and putting rules of the road in place around consumers rules and look at the financial product and not the charter of the organization that is shoing the product. >> i want to go back to the partisan thing because we have seen it play out in the house and in the senate and everyone has expressed the same goals generally. and also has expressed the sentiment there is no reason this shouldn't be a partisan piece of legislation. why in so many steps along the way has it broken down along

those lines? >> i'm a new guy. i still don't get it. i have been working for a year with a great partner, republican senator bob corker. we were both business guys. we both realize that even though we have been around markets for years, we had a lot more to learn. and candidly, a lot of the assumptions i came in with a year and a half later, i have had to change. and as i got a deeper level of knowledge, this should not be partisan. there is no democratic or republican answer on financial fixes. and you know, senator corker and i continue to say we didn't get the memo that we weren't supposed to get stuff done and check our republican and democrat hats at the door and we have taken grief from our respective parties and if we can't get a bipartisan bill in this area, then it really is

going to disappoint me because i campaigned for this job as a bipartisan radical centrist which i don't think is an oxymoron, but it's going to test my optimism if we can't finet find a way. 18 months later, we have to put financial rules in place. >> how can you put this in context with the health care debate. and here, we have a lot of the same people? is this something you hear around the state? >> the level of anxiety isn't near as high as it was around health care. >> in the health care bill, i think there were philosophical differences about the role of government and the moral or economic imperative to make sure that everybody had some level of coverage. i mean the rhetoric got inflamed and i think the health care bill is not as good or as bad as some

of the biggest advocates and the real question is how do we implement it and how do we come back and address cost containment. on this bill, there doesn't seem to be -- everybody understands there needs to be a role for government and the market and rules of the road in place. and i think the part of the reason why people haven't perhaps got -- our phones aren't ringing as hard is that this stuff, trying to explain derivatives and section 106 exemptions, we have had these conversations -- i mean i couldn't explain it a year and a half ago and i spent 20 years around the financial markets. this is why we got hired, folks hired us, go up there and check our partisan hats and try to learn this and put rules of the road in place and recognize that even whatever knowledge we have -- we can only set the

parameters. ultimately the regulators are going to have to do their job. and the two things -- a lot of americans might say, regulators have more power. how can we trust them? >> that is a valid point. we are going to give the regulators additional power. we are going to try to make them focus on specific events, things like capital markets, leverage in a greater way, requiring them in effect bless a funeral plan of a large institution of how to put itself out of business during bankruptcy. the regulator will be on the hot seat if they don't get that right. so it's not a perfect solution the thing you can't do is have congress write with speaks physicianity all of the rules today because what you will end up having is there will be a way for wall street will find a way around the rules in a legal

sense. you want to align the incentives and keep some of the more draconian consequences held out there if wall street violates the rules that we all agree to. for example, one of the areas around derivatives. people have talked about the need for trial companies and i agree with this, to hedge their risks. if you are a company that uses aluminum or steel, you want to lock your price of steel eight, nine, 12 months in advance. if that exemption for the amount of capital required to have that contract gets abused, thens perhaps you would have the draconian consequences coming on the bank. how to get the incentives aligned is something i have been trying to focus on. >> you have been a big advocate in this effort to overhaul the financial regulations and have written works on key parts of

the bill. what do you think -- what amendments have you considered proposing? where does it maybe not go far enough or go too far and needs to be scaled back? >> i'm looking forward to see what senator snod and senator shelby comes up. i'm working on some amendments with senator corker. i would like to see this play out and see what the chairman comes up. one of the areas we have talked about and i think they are going to correct already is trying to make sure that angel investors, people who invest in start-up companies and venture capitalists, i think the ability for young folks with ideas, entrepreneurs, to get access to capital and get a chance to get started. that we ought not to put barriers in place to those activities. there were certain parts of the bill that restricted the ability of angel investors or put a deal put it up too long for a review.

chairman dodd is going to change those things so we allow entrepreneurs to live out their own version of the american dream. i'm hoping some of these other things -- i don't care who offers them. >> you talked often about unintended consequences. are you comfortable with where the legislation is? >> i'm never going to be comfortable. particularly folks in the financial sector who comes in and say, if you do this, here are the unintended consequences. they say we want financial reform but not for our particular sector and then scare you so you will default back to the status quo. the stat cuss "is not working. >> what are you concerned about how this process plays out. what are you worried about is going to happen if either side addition in? >> if they draw bright lines in the sand on issues where i don't think there is that great a policy difference.

where the form becomes more important than the substance. i think the republican leaders' attack on the notion of whether you pre-fund or post-fund a fee that will be paid for by the industry to unwind some of these funds. there is legitimate arts on both sides. but to take something and take it out of context and i think it will be taken out and be funded by the industry after a fact, after the crisis. but take out these items if you haven't study yesterday them and make them for colleagues who haven't spent much time on the legislation into these kind of bright lines. that would be very disappointing for an area that is complicated that we need to get it right. >> we heard from senator feinstein it is not possible? >> we can't unscramble those eggs.

senators wished they had the votes back in 1999 when they did away with the walls that the bill had in place but it has changed dramatically. we have four of the 50 largest banks in the world. the 46 banks have this financial supermarket in place and i don't want to put america at a competitive disadvantage. >> there will be a vote. there will be an amendment that will try to establish the law and pop lism, depending on where it is, the amendment may have a chance? >> i think the structure we have put in place that says to regulators, to look at the institutions, not just the security or investment banking business, we force the regulators to talk to each other and if they see that a large firm, goldman sachs, can't be unwound in an orderly process,

then the regulators can break up these institutions. let them make that judgment in an orderly fashion rather than potentially putting american firms at a large disadvantage. >> closing question here, what's more important given the election timetable, speed or doing it right? >> i think the senate seems to have a relatively short attention span. so i think we will get it done before memorial day. and this has been vetted for last couple of years, dozens of hearings and hundreds and hundreds of meetings. if we get it done before memorial day it will strike the right balance between speed and getting it done right. >> "newsmakers" is back. gentlemen, we just talked senator mark warner, as the senate begins the amendment process on the financial regulation bill how challenging

is this for the leaders, the committee leaders and party leaders in the senate to put together a framework for this debate? >> i think it's a real challenge because unlike a lot of bills that goes through the legislature, this encompasses so many elements across the financial spectrum that will affect not just wall street, but small businesses, community banks and so i think while there is wide agreement on the goals, you know, senator warner spoke, there is a lot of disagreement as to how to get there and strike the right balance. >> how many amendments can be offered. is that going to be critical to the process? >> absolutely. we don't know the answer to that question. the more amendments that are offered and less structure for the debate, the more difficult it could be to see how this is going to come together. one of the things that has been confusing, we have been up here covering the back and forth. one day they are at each other's

throats, you are going to ruin the economy and next day, we can live with this or that. hard to understand where they're going. next week, it will take shape as far as how the debate is going to play out. a lot of amendments from both sides and will dramatically change banking or wall street or finance and depending on which side you take for better or worse. there is going to be hard votes for lawmakers to take. senator warner is in an interesting position because he thinks if everyone would calm down we would get a bipartisan deal, but folks are dug in. this is a chance to once in a generation chance to really change banking and we'll have to see how it works out. >> everyone is talking about consumer protection and the watchdog groups are telling us that the lobbying groups are jetting up their operations. how concerned should the average

citizen be that their interests will be protected against corporate interests as this progresses? >> as concerned as ever. >> no more than usual? >> there is a concern in that you don't know how the legislation plays out once you put it in place. we don't know what the legislation will be in place right now. so i think what perhaps is a confusing message to most americans is that both sides claim to be looking out for the interests of a average american consumers with one side saying if you institute proposals to create a whole new agency to protect consumers, you will cost people more and harming businesses, other side, if we create this agency, the whole interest is to protect consumers. sometimes the message gets loft lost. >> we kept hearing hearing that

doing it in pieces might have been the better way to go, not knowing how it will play out and ultimately because of the political to and fro, has there been any discussion taking this in chunks and seeing how it works or why the approach in the big sense? >> this is a good question. back at the beginning of the obama administration they tried to tackle this resolution authority, how to wind down family banks but that was impossible the way congress works, sort of nibble at the apple. so they ended up doing it in this big bill. there will be a debate, however this plays out, whether this was a good idea or not. any part of this bill could take five years to move through congress. the administration, the democrats, want to seize on the pain that the americans still feel from the fivenshal crisis to push this -- financial crisis

to push this thing through. >> how does the election year timetable affect its progress? >> well, i think, you know everyone has an interest in getting it done. i won't say everyone, democrats and chris dodd want it done quickly. and other lawmakers as well and who may want to use this bill to show how tough they are on wall street or how much they do care about consumers as a way of relaying that message back home because there are a lot of people who face tough races this fall. and as it g gets closer to the election season, those votes on a bill like this become harder and harder to take. >> looks like they will be dealing with this and immigration at the same time and possibly energy, all hugely controversial issues. >> it's true. and it's funny, democrats were thrilled to pivot to this from