trading errors occurred. and none of the firm's indicated in each trading errors -- areas. .

>> we have made inquiries of those firms that were accurate. power lines of inquiry included analysis of short-selling including the specific strategies and triggers employed by each of the trading firms. there is still much to be done before we can say we definitively pinpointed the cause is, i think we can say that certain basic truths have emerged in should not wait. we know that the process for restoring order following an event like last thursday should be more transparent and predictable. because trading has to be ensured through coordinated activity is what we have to do. that is why the coordinated filings are so important. i will not spend more time discussing more details.

as we look past these short-term steps to address what we saw in the market, long-term concerns must be addressed if we are able to reassure market participants that markets are stable and fair. firms need to ensure that they do not repeat orders into the market once they have broken in respect to precipitous declines. second, firms must properly supervise customers to whom they have given direct access to their markets. third, there should be continued analysis of various market rules regarding circuit breakers and erroneous trades with an eye for consistency and transparency across markets. we should also examine various order types and their impact on the events of may 6. we should also analyze and

potentially eliminate the practice of stop loss. -- the speed of the market's has made it imperative that regulators act now3. this is important in equity trading. there has been rapidly pollution of how and where trading occurs and how transparently it is executed. today, orders are routed to 50 competing platforms partisan parlor increased opportunities for traders seeking unfair advantage to manipulate markets by exploiting inconsistency or gaps. regulatory authorities are hampered by the lack of a comprehensive and sufficiently granular consort -- consolidated

system. our audit does not identify each of the entities that significantly impacted pricing. it focuses on the broker-dealer and those who clear the trace. the most effective way to oversee this is to consolidate data in a single place so the trading practices can be more readily identified. this would not eliminate all the challenges from the six books -- 66 million trade day, it would make the process more effective and efficient. it would enhance oversight of the equity markets in ensuring market integrity and protection of investors. we look forward to working with the sec and this committee on this important initiatives that lie at the heart of enhancing

regulators' ability to oversee the markets today. i look forward to entering questions. >> thank you very much. >> thank you for the opportunity to be here today. we commend the subcommittee for your proactive response of the events of may 6. the events of that they are a clarion call for the need to enhance safeguards. it also confirmed the wisdom of the sec's ongoing efforts to improve the market including their review and leadership in bringing the market together. i would like to discuss three things -- the high level causes of the may 6 event, second, clarification of the market model, third, recommendations going for it. it is understandable that ever was looking for what is behind this event. it is more complicated than that. from our standpoint, we see no evidence that there was

manipulation due to automated trading. there was elevated market activity coming from adverse european news including a wave of orders around 2:40 p.m. there was a significant thinning in the marketplace accelerating into the downturn. there were various a microstructure issues which exacerbated the affect. we know that news enter get transmitted to the market faster than ever before that technology and media. we need to ensure the integrity of the market during these times. our actions may reduce volatility. we need to embrace electronic trading. we believe our market models combine cutting edge technology with healthy markets.

at the nyse, we emphasize price superspeed. we emphasize price over speed. on a typical day, lrp's are traded -- are triggered a 200 times. there's a brief pause to allow liquidity to come in. the lrp mechanism does not halt trading. new orders are continually accepted. electronic markets may choose to ignore our quotes although many participants choose to continue setting -- sending orders to the nyse. on may 6, during the 2:40-3:00

period, the market was five points higher than usual and our market makers and supplemental liquidity providers were equally strong. they did not walk away from the market as we actively traded. to demonstrate that lrp's protected stocks in our market, the overall marketplace and needed to cancel 15,000 execution after the decline. even though we have the largest share of orders in the marketplace, we had to cancel zero trades. 85% of the trades that were canceled or securities that were not listed on the new york stock exchange. ;lrp's worked reasonably well and investor response has been

positive. however, i want to mention an area that has been a topic of a connector information. the nasdaq help. we are unable to determine what all our systems and communications were not functioning properly. at 2:47 they were sending orders outside the system. we welcome the sec's review of these events. we need to examine the ripple of fact that stock volatility in the etf market and make sure these are considered in circuit breaker considerations. we are pleased with the recently announced the adoption of market wide stock level lrp's.

we will review the need for functioning lrp's once the circuit breakers are implemented. circuit breakers install rod blagojevich is based on a 20%- 30% -- circuit prison -- circuit breakers installed long ago are based on a 20%-30% move in the market. i would submit that the need to cancel trade is a son of a market structure that does not function properly. since 2008, hundreds of thousands of trades have been cancelled from electronic exchanges with stocks trading down to a penny in the fourth quarter of 2008. it is time to put a stop to that. we should review the order routing practices.

there are things we can do to protect investors by being harmed by a volatile market. we want to facilitate an audit trail allow regulators to review marketwide trade data. these actions may be best achieved by consolidating market surveillance with one regulator which would require an act of congress. in closing, we applaud the sec and the csfc. we've enjoy working with these agencies and we want all agencies to play an active role in helping our markets function in a way that gives our investors' confidence. i will be happy to answer any questions. >> thank you very much. >> good morning.

we worked closely to identify situations in market instability. we support the sec and the cftc in four areas. what is circuit breakers, establishing new stocks reporters that include an element of loss of the price changes, 3, improving the handling of the trade breaks to maximize consistency, and finally changing the use of "tens of a order types that impacted trading on may 6. consistency is the key. each exchange says they function normally, the changes will improve the collective ability to handle unusual trading events in the future and help to restore investor confidence.

markets like consistency and predictability. our markets are strong despite the 17 minutes of trading that have garnered public attention. on may 6, the global markets were nervous, becoming increasingly volatile and operating during a long upward price trend. this volatility was tied to the crisis increase in europe. rating agencies lowered the ratings of sovereign debt of greece, spain, and portugal. the european union was working to fashion bail outs and violence escalated in athens. the euro was down 15% in the past six months. against this backdrop, we arrived at the afternoon of may 6. the dow jones industrial average was down over to a request for the day, down 500 the previous three days. second, there was an unusually large institutional order tied to the s&p 500 index.

futures are report indicator for prices. when the s&p futures sank rapidly add to the clock 42, this was followed by rapid declines in equity. at 2:45, equity features became so negative that they cme triggered at of that which was a five-second pause in trading was. in trading resumed, futures level off and began to climb sharply after, equity prices rose as well. the cme assured there was no inappropriate action by them or their members. the electronic market began experiencing a communication issues with the nasdaq that link into other markets for the other exchanges were forced to route around as per there is no evidence of inappropriate activity or other problems of the liquidity became less available to the entire market.

simultaneously, the hybrid market began reporting multiple liquidity replenishment points and gap "that impacted the trading. under sec regulations, nyse was permitted to issue lrp's. this allowed other markets to start routing orders to be nicely. -- to the nyse. the nasdaq under analysis indicates that macy's was triggered by a confluence of unusual events, including events outside the equity markets. we have not located any single smoking gun that caused her fully explains these events. i would note that so-called high frequency traders have played no distinguishing role in this event.

they behave with other liquidity providers that day. the sec is engaged in a court review of market structure and the policy around high-frequency trading. we think congress should let that run its course. the nasdaq market operate continuously throughout the day and the critical 17 minutes. everyone of our systems functioned as designed and intended. our market data feeds and several systems were fine. the exchange is reporting that its systems function properly, the collective performance of the market was upsetting. there should be rules to implement stock market trading in general to update marketwide circuit breakers. nasdaq supports practices that cause individual markets to go slow of any other practice starts have liquidity when needed.

thank you again for the opportunity to share our views. i am happy to respond to any questions you may have. >> thank you. >> thank you for inviting me to testify todaycme group is involved in trading activity on thursday, may 6, 2010 for our review indicates that our market function properly. we have identified the trading activity that appeared to be herodias or continue to the break in the cash equity market during this period. our markets have led the recovery. no market participant in our market reported that traits or executed in error nor did the cme group break in a transaction as a result of the activity. futures contracts by design provided indication of the market's view of the value of the underlying stock index. that is why cme group is a leading indicator, not a cause

of decline in the underlying primary market. to illustrate this point, but me draw your attention to these two charts. chart one shows that the emini s.e. be moved in tandem with the s&p 500 index. at 1346, the market attracted liquidity and de-balance. chart to chose price movement in the emini s and p movement in addition to other stocks. 3m stock moved quite rapidly. you see the market and the emi ni and s&p reverse. we have developed systems that maintain integrity in our markets including a number of

controls to protect market users such as logic function mali, price bending, -- price banding and circuit breakers. on may 6, the stock price logic triggered the system allowing the market to locate the quiddity and stabilize. we have seen no evidence that high-frequency or other spas of a trading practices magnified the decline on may 6. our market indicates that the high frequency traders in our market provided liquidity on both sides of the market. we commend the commissions on their swept response and looking for it -- and look forward to working with them to find

constructive solutions. we are pleased and concur with those recommendations seeking harmonization across the national market system. circuit breakers, including ones for individual stocks such as those implemented by the nyse, must be harmonized across markets. stop logic function now should be adopted across markets to prevent cascading, downward market movements as the report confirms it did on may 6. lastly, the current circuit breaker levels and the duration should be re-evaluated and updated to current market conditions. i thank the committee for this opportunity and i look forward to answering any questions. >> thank you very much, gentlemen. fat finger is not to blame. that sounds like a character in

maya. mikemyers movie. it struck me that one thing is clear, we have highly interrelated markets. we have different rules in those markets. some of these roles i presume are crafted with awareness of other roles that perhaps are not consciously and deliberately complementing others and part of the effort is to harmonize rules. we need to ask tough questions about whether the harmonization means to make them all the same which could exacerbate prices or at least make them responsive to end reflective of the other roles. with that long, long introduction, the basic question is, your comment about what we know and what we don't know

about may 6 and also the need for more coordinated structure rules. >> your points are well made. i would agree with a great deal of what chairman gensler said earlier. we know a great deal about what happened that day. we are cautious without fully understanding all of the underlying activity as, a few things seem clear. this was not the result of one single program. it was a large number of programs that operated together. it was a result of real things happening in the marketplace but the response of a concentrated selling activity and a speed which liquidity can disappear from the market is close to absolute. that is combined with an environmentugv4÷ where there art

consistent market maker obligations across markets at this point. without that, where there is no ability for participants to be able to pause and read insert buying activity. that is unacceptable. th epauses are important this will allow for the ability for algorithms and people to understand and re-entered buying activity. it will not miraculously appear but computers are designed when they don't understand something to withdraw. you need enough time to determine that the world has not ended and there are reasons to continue to buy stocks. that need to be combined with a consistency across each market in stocks and futures. that is not always identical. with respect to areas like's and circuit breakers, they should be

consistent. >> it is very comforting, it would be more comforting to know how this work. it is relative. we all take our shoes off at airport security because someone took out their shoes. -- because someone had a bomb in their shoes. one of the factors in our market shows that the retail orders, what do we do about liquidity obligations. the markets react fast to news and can acquitted to get there in time. hm9twe have to look at the facts that make up our market structure which functions very well on a normal day but during times of stress, actually sometimes doesn't. i think we have a loosely coupled fragmented market that was deep at the top of the book but when the market moves through that book very quickly,

it is not nearly as efficient as it was. >> thank you. >> i don't think we are ever going to identify the precise, an exact cause of may 6. however, we believe that if we can solve what we think are some of the negative outcomes of may 6 that we will avoid the issues of what the precise cause was and be able to move forward with a robust market. those are coordinated responses for circuit bridges across all markets. we don't think market should compete on circuit breakers. we don't think they. should compete on they those things need to be consistent. we should have been able to identify that before this occurred. the market had never experienced this kind of liquidity dearth in this event recognize that as a

flawed we are working quickly to work with one another to fill that hole. i think there are positive innovations in our market models for the nasdaq as part of its market model. denies he is very proud of its board a small and there will be room for us to be competitive and compete on innovation and drive down costs. in areas like this, i think it is incumbent on us to cooperate with one another and we are doing so. >> thank you. >> i think the harmonization of rules is absolutely essential. when you talk about 50 or 60 flows obliquity with some of some protocols and others with none, it will be difficult for a marketplace. in order to funnel it into one marketplace, these things are trading in microseconds and secure liquidity and they are going into so many polls to find liquidity and then you confined out why the crisis happened.

i don't think is a big secret. i think the 10%, 20%, and 30% circuit breakers need to be examined. i think the stop logic functionality that they cme group was put into place which is patented, that clearly works. that stock market plunge and alec kicked in. -- that stock market functionality kicked in. we have offered to sell it to the marketplace even though it is under patents. we think there are a lot of good things that could be part of a solution. >> i think it is important to try to continue to find what the cosmos. it will make the response much more fun.

we already know there are problems there and wesr: cannot think this is a one of experience and will not happen again. in fact, as i suggested in my questions earlier, this was an accidental confluence of bad news from europe, trading irregularities, etc, but we have to plan for a deliberate attempt for technological attacks. in this context, do you think you are prepared for it? if you are not, are you planning in pleasantly in a serious enough situation that there will be support from the government to get you through a difficult moment? >> there is no question we're prepared for it. we have prepared for a pre- september 11. we have been building remote

facilities going back to 1999. we have redundant -- redundancy in many locations. we don't run all our facilities out of the cme group in chicago. we are without question prepared for whatever needs to go forward. as far as the legislation, we believe that there are certain situations where everybody should have access to the dixon -- discount window. i think the cme group or any other clearing entity may not have an opportunity to get to our bank lines and a reasonable time resettle our markets twice daily. that is why we have not had flaws in 150 years. which is still have the ability at the discount window. >> there was a presumption a

decade ago that securitization mortgages were not particularly dangerous because after all, who defaults on your mortgage? it is 20% downed and day fico score. after that there was nothing down and yet we are still treating those of securitized a ghost. this is not the exact analogy but essentially we will ask on the new legislation declaring a platform to take a much 1different types of prn they are clearing today which are probably more risky and that goes to the point that you're making. in rare circumstances, we hope there will be a need for support. >> there is no question, sir. the legislature calls for the clearing house to refuse an

over-the-counter transactions. if you cannot manage it, you will transfer the risk and that will blow me up. we need to have the risk- management tools in place which we do. we think we need access to the fed window if we needed them i. >> we are well prepared for any break in technology or any attack. we have multiple facilities that back one another up. they are connected to one another and the rest of the marketplace. they are multi-state. they're not in the same general area. they are spread out quebec. for my physical security standpoint, we feel quite, but we're prepared for any sort of event like that. in terms of clearing and access to the fed window, while the nasdaq does not operate a u.s. based equity clearing house, we

are is to begin investor in a clearing house called international derivatives clearing group which is designed to clear interest rate swaps. like much of the other participants at this table, we would think that at the end of the day, clearing is a better solution than not clearing these products, but in the eventual the ultimate risk, we think that we may need to access with the federal government support if there was a major crisis. >> we have hot backup and are examined by regulators to make sure that we are living up to certain standards of disaster recovery and business continuity. we have people who have security clearance for such things as homeland security and other agencies and we work closely with that in terms of things that could come over the internet.

i agree that the clearing house will be an issue in terms of known risk exposure across instruments. the world has got more complex. i secured debt on with your analysis. during the financial meltdown, we got a bunch of quantitative models that said nothing could be that bad. each individual player thought they were protected. they had not taken into account what of it all goes bad ones and what we all have to go through the same exit door at once. we need to approach how we structure the market and our backup and their clearing facility with these things in mind. >> final word. >> regulation is a different business, we also feel very well

about our ability to fiscal responsibility and disaster backup. we focus intensely on potential intrusions, on denial of service efforts and we feel good about our protections on that side. i will not repeat what mr. liebowitz said but i think he said it well. every conception should be challenged regularly with market's changing as fast as they are. that demands some flexibility from the standpoint of the clearing changes. there are capabilities to ensure batboy there remains liquidity. from the standpoint of being able to respond to attack, we think this is a corporate issue for congress to focus on. >> take as much time as you want. >> thank you. mr. knowlem, i will ask you this

question. i would like the others to respond as well. as i said in my statement, i am concerned about the way some traders were canceled. given that everyone seems to agree the system work the way it was set up to do, how do you justify cancelling trade and protecting investors from the bad decisions? >> a share much of your concern. it was a difficult day to make that decision. it was done in coordination with the other markets on an ongoing discussion. that lasted many hours trying to decide what the proper decision would base. we were trying to balance the need and requirements of what we would call moral hazard issues which is making people aware and bear the consequences of their activities in the marketplace with what was clearly a dysfunctional marketplace that

was not functioning as it should function. in the absence of any clearly erroneous trade, we looked at the decay of price discovery and the provision of liquidity and we tried to draw that line more arbitrarily than i think we are comfortable with inappropriate area where we did not reward anyone for bad behavior but we did solve the problem of what we consider to be a dearth of liquidity. we are confident that the stock by stock circuit breakers being put into place will prevent a reoccurrence. >> looking back, we all have 20/20. >> i think that's true. >we believe we would like to put the circuit breakers in place and we think that will help going forward. we endorse chairman shapiro's desire that we have transparent and understandable and agreed upon a cross all market

erroneous rules that remove the discretion from one market actor or anyone groups that everyone knows visibly and clearly what those events are and how they will be triggered. >> and one else like to comment? >> i had a portion of sitting on the nasdaq committee. it troubled me then and it troubles me now. markets that have to resort to breaking traits as a response to these kind of conditions are not really markets, in my mind. that is not the way we should do business. in this case, the big challenge was not that we had investors making a mistake. they should pay the price. they would into a black hole. they had stop-loss orders. >> i am sorry, sir. even if they are not

sophisticated, anybody that puts a market order in knows exactly what will happen to the market. >> the broker probably does and maybe the answer is the broker should have set up for that trade. a lot of the public does not. >> a lot of the public does not know that if you put a market order -- a market order in it is not executed? is it a limit order? >> they don't realize when we trade in center, it will be down 99%. >> i agree with that. if you put a market order in, that is your execution. >> you are right in that regard. we also need to talk about whether market orders should be allowed at all and how we educate people so these things don't happen there should not be the moral hazard of breaking traits. that is not the right way to make a market of improperly. >> anyone else? >> i believe you need to have

clarity on rules. anybody that will participate in our market knows the rules. as far as busting trade, every order has to have a limit on it for you cannot just send in a market order. what made -- what mr. liebowitz is referring to is that you have to have a limit on every order. >> i understand that. >> we don't accept those and that is why our system works. that is an important point. >> you did not have a new losses under market? >> there were losses because there was a lot of fun down but the orders were not heat seeking missiles that could go to infinitely. y. if someone buys a trading gets busted out of that trade, he might have elected to liquidate that trade prior to the bust rule coming in place.

he goes on and goes to sleep and shorts the market and has no idea. >> absolutely, that is what i'm getting at. what should be done so that it will be predictable when trade will be broken in the future other than what has been suggested? >> what we are planning to do, we just had a meeting called for all the exchanges on tuesday, we will come up with a standard about how we will move forward in addition to the circuit breakers were put in place. how we will move to have a clearly defined standard of when trades will stand and when they wound so we do not face this issue again. >> if i am in new york in dealing with a broker dealer in schenectady, and the broker --

and a broker -- any broker, how would i compete with the electronic traders that have a nanosecond of access. >> most participants coming in from the public are not trying to compete in a nanosecond market. they are buying and selling stocks -- they're more of a holder participation. the microsecond traders are liquidity traders and have tightened up the market spens. >> mr. leibowitz, since exchange

traded funds are listed on one of your exchanges, i will start this question with you and anyone else who wants to add something can. why do you think we saw more said near -- severe moves in exchange traded funds than the underlying stocks. investors be worried that these products are not as reliable as everyone thinks they are? >> the important thing to say is the fact that etf's got hit as hard as they did was sa an e not at a fact. -- not an effect.

etf's don't have deep liquidity. there are normal -- they're not a lot of retail orders. the wholesale was committing capital to keep the market tight. there is an article today that suggested two of the major wholesalers had system problems during the melt down. that sucked out capital out of the market to commit to the product that allows it to tighten up. couple that would stop losses which triggered the market and no pause in that market -- what happened between the nyse and our case is that both markets have a market maker obligations. in the etf market, they have lmm's. trading did not pause long enough for the books to

ewfill. we look at this with the issuer is and how do we fix the market's structure sort works better during this time. it is imperative that etf's be included in the circuit breaker pilot. >> that is true for two reasons. etf's, like futures, are aggravated products -- aggregated products. they will almost always be hit very quickly with respect to any market reaction from the standpoint of selectivity or buying activity. secondly, unlike futures they often are not that liquid given the wide range of those products that have been developed over time. this is an area where we absolutely have to move quickly

to include the s&p 500. as someone who was born and raised in schenectady, want to thank you and senator warner singling out your concerns in schenectady. >> that is an old town i played ball in. >> i actually watched you. >> we are not that old. [laughter] in your state and, you said that changes in the marketplace have a limited meaningful market makers'' obligations. what changes should be considered to market makers' rules to reflect the current marketplace and new rules of liquidity providers? >> that is a very good question. it does not have a simple answer. i believe in competition and the

reason for changes in market maker obligations have been by the sec's effort to encourage competition across markets. the reality is that today and a number of marketplaces, there are not obligations reasonably obligated to the market. two things need to happen quickly prefers the is whether it is an obligation. should not be two-sided "obligations. quote obligations. secondly, their knees to be an evaluation -- there needs to be an evaluation where there should be a requirement if you were to get benefits from the standpoint of market-making status. you raise the question earlier price personally, i believe that should be reviewed and reconsidered.

>> anybody else? >> i think this is a serious question which is where is all the liquidity in the market and who has an obligation? dark pool liquidity may have been sitting outside the market and when the market went down, it was not used. many markets have evolved to speed over obligations. lmm's exist on a couple of markets for etf's. that is a sign of a problem, not a problem itself. the nasdaq market makers used to have a requirement recording close to the market and how deep they make the market. as the market evolves to a faster and more electronic marketplace, those market-makers were not able to keep up. as a result, the requirements got thin out to the point where

the only requirements they had was equity in the market and it did not matter where. that gives them of their right to market place like internalizing orders. what do you owed to the market in exchange for that right that you've got. that is what we all need to look at. >> thank you. >> thank you, senator bombing. your experience is obvious -- senator bunning. you gentleman and the regulators have a lot of work to do and we have a lot of work to do. this is an evolving issue. fortunately, we've missed the worst outcome in this situation, but i cannot think that we can assure ourselves we will not have other challenges ahead. i think we all understand that we have to do more to understand this problem and to take

effective action. i thank you. this is been helpful from the beginning. we will hold more hearings about the status of the market. we will talk about market makers responsibilities and the interconnection of all these aspects. my colleagues have a written statements or additional questions, i have asked them to submit them no later than next thursday. i have as the witnesses to submit responses within two weeks. all of the grid testimony submitted will be made part of the testimony. without additional information, this hearing is a journal. thank you. good job. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010]

[no audio] >> a house panel looks of financial market accounting and auditing standards this morning. we'll hear from officials at the securities and exchange commission and the financial accounting standards board. live coverage begins at 10:00 from the house financial services subcommittee on capital markets. the senate passed and financial regulation bill 59-39 thursday night. president obama spoke about the legislation at the white house

before the vote. >> i want to say a few words about the potent financial reform in the senate today. i have said many times that the recession we are emerging from was primarily caused by a lack of responsibility and accountability from wall street to washington for the reason our economy nearly collapsed was what led to countless home foreclosures, the putter of community banks, small businesses, and a cascade of job losses that put millions of americans out of work. that is why i made passage of welfare reform one of my top breeze as presidents of a crisis like this will not happen again. over the last year, financial industry has repeatedly tried to end of this reform with cords of lobbyists and millions of dollars in ads. when they could not kill it, they tried to water it down with special-interest loopholes aimed at undermining real change. today, i think it is fair to say

that these efforts have failed. democrats have a handful of republicans have a budget to break the filibuster and vote on financial reform. this is reform that will protect consumers, our economy, told wall street accountable. i want to thank senator christopher dodd and majority leader harry reid for their leadership on this legislation and the senators who put partisan posturing aside and allow the boat on this important reform. i want to thank every american to keep the pressure on washington to work better for banks -- who seemed to work better for banks and wall street and the did for american families produce still have more work to do perry will have a final vote in the senate and house and the sun will iron out the devon's as between the two bills. there is no doubt that during that time the financial industry and the lobbyists will keep on fighting. i will insure that we arrive at a final product that is both

effective and responsive, one that holds wall street to high standards of accountability and secure its financial stability while preserving the strength and crucial functions of a financial industry that is central to our prosperityqrouñ d their ilk -- and our ability to innovate and compete in the global economy. the goal is not to punish the bags. -- the banks. today's action was a major step forward. because of wall street reform will soon have in place the strongest consumer protection in history, if you've ever applied for a credit card, student loan, or a mortgage, you know the feeling of signing your name to pages you barely understand. is a big step for most families, one that is often filled with unnecessary confusion and apprehension many americans are simply duped with hidden fees, as a result.

these companies know exactly what they are doing. those days will soon end. from now on, every consumer will be empowered with a clear and concise set of information that you need to make financial decisions best for you. this bill a crackdown on predatory practices, oscar dilatory -- unscrupulous mortgage lenders, and insure that folks are not unwittingly caught by overdraft fees on credit cards. students to take out college loans will get information to make sure that lenders don't cheat the system and it will insure that every american receives a free press corps if they are denied a loan or insurance because of that score. the american people will never again be asked to foot the bill for wall street's mistakes. there will be no more taxpayer- funded bailout, period. if a large financial institution should never fail, we'll have the tools to wind down without

affecting the broader economy. there will be new rules to prevent financial institutions from becoming too big to fail in the first place. because of reform, the kind of complex backroom deals that helped trigger the financial crisis will be brought to the light of day. shareholders will have greater say on the pay of ceo's and other executives of it and reward success instead of failure. in short, wall street reform will bring greater security to folks on main street, to families looking to buy their first car or home, to taxpayers who should not have to pay for someone else's responsibility, to small businesses, community banks who play by the rules and the shareholders and investors who want to see their companies grow and thrive. let me stress that this is not a zero sum game where wall street loses and main street wins.

we have learned in today's economy that we are all connected. when the economy prospers, we all win. when the financial sector operates under fair rules, we all win. every american has an interest in a healthy financial sector. for that reason, it is imperative that those on wall street board rooms and trading floors be held accountable for decisions they make. behind every dollar traded or levers on wall street, there is a family looking to buy a house, pay for education, open a business, or save for retirement. we want to make sure this does not stifle the power of the free market. it will bring sensible rules into the marketplace. unless your business model is based on building your customers and scribble law, you should have nothing to fear from this legislation. as we continue to be a march from this recession, this reform is one important step that will

strengthen our economy. despite the ups and downs associate with a recovery, bad economy is getting stronger by the day. it is an economy that is growing again. last month, we added jobs for the fourth straight month we're working closely with our g-20 is around the world to make sure growth is balanced and sustained. i said we cannot simply rebelled this economy on the same pile of cent of maxed out credit cards and housing baubles and reckless risks taking on wall street. we have to build on a firmer and stronger foundation for economic growth. that is why we invested in renewable energies. they currently have the potential for creating new jobs across america. that is why we are reforming our education system so that our workers can compete on the global stage. that is why we passed health care reform that will lower costs for families and businesses. that is what we're about to pass

financial regulatory reform to protect consumers and insure we do not have another crisis caused by the irresponsibility of a few. this is how we will ultimately build the economy that is stronger and more prosperous than it was before. thanks very much, everybody. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> cspan, our public affairs content is a bill on television, radio, and online and you can connect with us on twitter, facebook, and youtube and sign up for our schedule alerts e-

mails @ c-span.org. >> "washington journal"is a next. later this morning, a conference on u.s. security interests in the world's oceans. we will hear from two navy officials. this is posted by the university of virginia. our live coverage begins at 10:00 eastern. last night, the u.s. senate passed a financial regulation bill, 59-39. coming up this hour, we'll get an update on what is ahead for the legislation. after that, the former house speaker newt gingrich will talk about his new book. later, a reporter from newsweek talks about his book "obama administration. from the nation's capital, this is "washington journal." . . .