he went on and on. he said this came out in 1929-1930 after we created the fdic which performed i think so brilliantly in helping us to confront this financial crisis, so i would like to see what the fsoc report says about what americans can hope for and plan for, for a more stable future financially, and thank you for your service. >> i don't think i can improve on how you said it. what the financial reform law does is establish the basic protections we did not have to prevent americans from being victimized from not just fraud and abuse from per dation, but from the type of risk taking we saw that almost brought down the american financial system i am very confident with these reforms we little l build something that's going to benefit more than the average working person but businesses

to raise capital and we've all seen what happens when you get that basic balance wrong. it hurts everybody, not just the impruden't but the innocent victims in this sense. what i would say generally is you should be demanding better results from washington in things that can help the economy now, because even with the strength of those reforms in the financial system and the progress we've head, the economy is not growing fast enough. millions of americans are out of work and we see these shots from europe and we have got to do things to protect ourselves and make our economy heal under -- heal more fasty. and what you're hearing is the argument of excess in foundation is -- >> bruce bartlett held senior policies in the administrations

and staffs jack kemp and ron paul and this is his words. in my opinion, that is pretty thoughtful article. in my opinion, regulatory uncertainty is a canard invented by republicans that allows them to use current economic problems to pursue an agenda supported by the business community year nb and year out. in other words it's a simple case of political opportunism and not -- i'll say what he sites is the level of unemployment and the rate of growth and profitability in the sectors of the economy where we're trying to put in better protections, health care, energy and financial services and he cites an academic that says there's no evidence you can find support the proposition that our efforts to design better protections in those areas are damaging growth. what's damaging growth and

confidence is the growth is slower than we'd like because we're still healing from a terrible financial crisis and we fates the cumulative shocks of europe and japan and that's why we have more work to do. >> thank you, the gentleman lady's time has expired. >> thank you and welcome mr. secretary. my first question is fsoc -- i'm over here. >> sorry. >> it's all right. the one of the principle creations of the fsoc so look at the systemically -- of our institution. because obviously that was a big problem with what happened in 2008. would you say today our institutions are more or less systemically connected than they were pre2008? >> they are obviously very closely tied but the most important thing we've seen is they hold much more capital against risk and are funded

much more conservatively. and noigs that there's been much more progress to make sure there's much more conservativism in the money market ps and for those reasons, it's much less likely that a particular shock would damage the strong, not just the weak, and much less likely that pressures on a weaker institution would spread to the stronger. >> would you say those effects we're seeing are from the european situation which is billowing over and affecting our markets and our financial institutions? doesn't that kind of play into that systemically connected issue? and in my speaking with some of these institutions, they are sort of saying well, if some of the problems -- if one of the sprobs being systemically connected, why aren't they

saying untwined connectiveness? >> well, i think we're moving in the same direction, but just to be realistic, banks and markets are always going to be terribly closely together. -- connected. there's no way to separate or disentangle them. what you need to do is make sure the firms have much bigger cushions against risk and much less vulnerable to funding pressure and the markets, where they come together like money market funds and derivatives have a much stronger cution. if you do that, there's much less risk of contagion, which is the risk you're refering to. but in a competitive market, you can't disentangle the things or otherwise we wouldn't have a financial system that worked. >> how close are you and the fsoc dez i go -- to designating

the cities? >> the they need approve new guidance we give to the market on the criteria we're going to use the determine. >> when will that happen? 2 1/2 years? >> i don't think so. but we're doing what people ask really which is what people ask for is a little more clarity. and we're trying to do something sensible which is give people to look at the criteria and give us feedback so we come out with judgments that people can plan on and respect and. >> and once those are designated whenever that is, 2 1/2 years from now, when are they due into the fsoc? >> i can't speak to that. i'd be happy to get back to you in writing. but i don't really agree on the 2 1/2 year-year thing.

>> well things move slowly. >> where we are slower is because we are trying to get them sensible and right and trying to get everybody to move together and not separately with different standards, and it is a complicated thing to do and we recognize that in so ways slow is bad, but slow is better in the service of better outcome with smarter rules. >> thank you. and then one thing about the regulatory, obviously this is a big issue the dodd-frank and your previous answer. i wrote you a letter and you responded to it, and i appreciate that about what type of regular lacelations after the president's executive order one and two asking you to weed out all regulations and streamline, and your disappoint will seek ideas on council members on concrete ways in which they can use the council to improve coordination.

i write these kind of letters,, too, but you're really saying you haven't done very much. >> i don't think you're completely right but you're right, we have not done a lot. but well-motivated stuff, protection things, what we generally don't do is go back and look at those when we do the new things to clean up the things don't meet their objectist in the past and it's very important that we do that because we're trying to get a smarter system, and not just pile up on the muck. >> i think my time is up, soimplet >> mortgage disclosure, credit card disclosure. >> in your letter. >> i'd be happy to write you about in the bank secrecy act where we've started to simplify things in a way that help but we're just in this process.

we have a lot more to do. >> thank you. >> welcome secretary geithner. i want to go back to tarp. and see if we agree on some $700 billion for banks and $30 billion for homeowners under the -- program. is that correct, mr. secretary? >> no. when i took office and the president took office. >> i didn't ask you when you took office but according to tarp. how much money was there in tarp? >> there was 700 authorized for the system as a whole. >> and how much was authorized under ham? >> i'm going to -- >> it's already half a minute. >> $700 billion authorized and how much was authorized for ham? >> 50 for ham. 30 on -- >> i'm not -- that's not the question! see we ask the questions. i know it's uncomfortable.

but every now and then we ask questions. you're answering questions i haven't even asked, so you might be getting ahead of yourself a little bit, mr. secretary. so there was $50 billion for ham, is that what you stated? >> authorized for ham. >> how much of that $50 billion was snent >> a very small amount. >> $2 billion. >> how much has been spent? >> very little. >> you won't agree to $2 billion and -- >> well let's have a look at the -- >> it could be $3 billion. it could even be $4 billion. it's not very much. it's terrible. so we authorized $700 billion and bank has $300 and we authorize $50 billion so people can stay in their homes and the money we put forward for

homeowners to stay in their homes rem wasn't utilized that much. isn't that a fair -- >> if you want me to respond, i'm happy to do it. but first of all, it's true that we have spent a very small fraction of the money authorized under the housing programs because number of people eligible for those programs are a fraction of those we thought would be eligible. >> in other words, mr. secretary, you're going to blame, as the republican do, fred fred and fannie mae? >> no. >> we hear how terrible they are all the time and there's nothing you can do with the money. >> that's not what i'm saying. >> let me ask you a question. so you said to us, you said mortgage servicing business, you said that that was really big, is that right and you said to us earlier you said a huge

increase in poverty and inequality, and that we should speak more clearly and more boldly. so i guess my disappoint when the regulations were established as to how you could use the program, were there regulations established so that you could reduce the principle amount of the loan, which you and your assistant secretary agreed would be very helpful in keeping people in their homes? >> yes. as i said in response to your colleague's question, we did establish it in the beginning and had authority to do it and are providing assistance for it with the taxpayers' money and programs to target principle reduction. yes. >> so why hasn't more money been used? >> for the reasons i said. because our programs directly only reach -- >> ok. mr. secretary, forgive me if i

fail to grasp this. i'm not the secretary of treasury. i didn't work at the reserve in new york and maybe i don't understand. but it seems to me as i see people throughout in wall street and see this conversation we're having here, look, i think it's pretty natural to say, hey, there was hundreds of billions of dollars in tarp money and there was a sense of urgency both by your predecessor mr. paulson and you and others to come here and say let's stabilize our financial system. it's in gridlock. it's going to fail. we need to give them the money and indeed they got hundreds of billions of dollars to stabilize the system but basically the homeowners didn't get very much from the program , and i want to state for the record, i voted for it prirlely because i thought well, at least there will be some money so people can stay in their homes. that's why people have

resentment, so when you come and say to us, wow, there's a lot of people in poverty and i don't want to talk about the $5 pee. about the $5 fee. people pick up the newspapers and read about morgan stanley and all this but you can't comment when they pat $5 charge on the bank of america. they want you speak. because they pick up the phone to those same banks and they won't return their phone calls so they can get their mortgage mediated. >> i try to say this in the beginning burks you didn't let me. this plngs and my recommendations with my support put hundreds billions in the market not directly through him but through the mortgages that had dramatic effect in lowering mortgage rates for everybody and helping people refinance

and made a huge difference in easing the pain, but our programs have dramatically underperformed from what we thought. why was that? because there were far more people not eligible. but we're disappointed and frustrated by it. but we did not -- that authorization does not capture the full scale we put into the housing market. we did than we did for the banking system as a whole. >> i want to say next time they have a crisis, tell them don't call me. >> thank you. and thank you, mr. secretary for that response. at this time i'm going to recognize mr. gator then i'll go to ms. have a lass questions and then mr. newton bauer will have voted and we'll go to

home. if members wish to go vote and come back, we can keep the questioning going on. the secretary has agreed to be here until 3:45. originally $5:00, but we agreed on -- but we agreed on three hours. >> no. >> two hours. so as long as the questioning goes on, we will have a stop but if it's interrupted, we will extend to the point it's interrupted. but hopefully not. >> i have to say i'm takin' aback by some of the comments by our witness today the uncertainty being a canard with regard to the pressures -- >> not my words. >> i know you were quoting from them favorably, but if there's anything more pressure on the markets it's the certainty this administration would take this view and take the view that the over 2300 pages of regulation

and 400 regulations that are coming from it is not a burden and that uncertain they creates is not a burden on this marketplace. i would very much appreciate if you could provide me with even a half a list of the community bankers that said they are privileged that they don't come under dodd-frank. >> they supported the law because it's a successful law. >> but if you're saying they appreciate not being under it, i would like the individual names of those bankers and for the ranking member to say he has not seen anything specifically that would articulate that would trays intermediation cost or cost on businesses, obviously the ranking member hasn't been listening to any of the testimony before and after frank dodd has gone into effect and listened to what -- >> would you yield? >> no. i would not yield. >> the other is in a couple of other areas.

g.s.e.'s. >> you remember we had a meeting back in april and we said we want to work with you. and you said let you have a little bit of time and give you a few weeks and then you'll get back to us. well, that was back in april. this is may, june, july, august, september, october, and i understand now you may have just told the senate side or someone else that you're now working on a -- coming up with it, still. in a nutshell, when can we have a response to our april request as to what the administration's exact details are and not another white shape? >> i meant what i said. but we've been a little busy. we've had a little crisis in europe. >> well, it was back in april. isn't g.s.e. reform very important? >> it is. and i'm glad to hear that the

debate seems to be moving in a constructive direction. >> it's constructive here but not in the white house and from yourself. >> well, we're not stopping you. if you guys want to come up with ideas, that's fine. >> but the president saying we're not working with them. we're all about working with him, as long as we have something specific from you or the administration. >> i took you at your word when you -- and also said to the public i think the burried season on us to propose a detailed plan. >> and we sent you a letter in reference to fsoc. our letters basically ask with regard to all the regulations out there, can't we have a road map basically in place, directed by fsoc to say as far as a timetable for regulations to come out and put it in the register by fsoc? >> i read your letter and i have to confess to you i had

the same basic instinct because it is a very complicated and confusing path of uncertainty and timing, so we're going to try to get as much regularity and remember they are independent of us. >> but if fsoc put it in a time frame has something you wanted to go by. >> as i said, it would be great to have more clarity but actual consequencing. >> now switching to another uncertainty in europe. i understand you have urged europeans to leverage their facility to issue euro bonds. >> no. that's not quite right, but go ahead. >> no? >> no. but i'll let you finish your question. >> so if they two or do that, they would be issued by the e.u. and backed by member states who can't print their own money because member states can't do their own money anymore so some would de note that to be a c.d.o. sort of

thing to try infuse capital into those marketplaces. my question is if they were to do that, could you assure us that the fed wouldn't be willing to buy any of those stpwhonds >> i don't think we have any authority to do that. >> so nothing through the fed? >> ok. i don't think so. i can't envision a circumstance like that. they are members of the i.m.f. so they have the right as members to borrow. >> that's my next quick question is where we as the fed have swap lines and those banks get in return they are backed by the security of what? the security of the other banks of those countries. effectively we're put on by the swap lines, we are effectively connected, if you will, through the fed and swaps to the potential of the teenagen of the failure of the e.u. is that good for us to be in position of?

>> absolutely. these are swap lines extended to the e.c.b., and they are swaps of euros for dollars. there's no risk in them. we have used them once at enormous scale. and there's no risk and very much in our interest to do, because we run a dollar-based financial system and those institution when they need dollars have nowhere to go except for us, and we're trying to meet that need. >> yes? >> thank you, mr. chairman. i yield to mr. frank. >> first, mr. gator as he often does want to debate with a strongman. the fact is i never said there was nothing in the bill that would restrain businesses. i'm very proud that we restrain the kind of credit default swaps a.i.g. neaged in without ability to repay and restrained people from getting into loans

-- what i said we did not do in that bill was anything that would increase the lending standards for banks on conventional loans. nothing in that bill. but secondly as the gentleman least, he's blaming the administration because we haven't done anything about g.s.e.'s. have we foren he's the chairman over that so when he blames the administration he makes punk chouse pilot look like a standup guy. the fact is there's been the greatest inability to focus and the notion that they cannot do it without the administration has got to be the least credible excuse i've ever heard. it's not the dog ate my homework it's that the ewan corn ate my homework because we have people who have been critical of the administration who have never asked the administration's permission to do anything. there's a great gap between

their ideology and reality that all of a sudden they can't do anything without -- >> mr. secretary, last month the treasury made its final round of investments in the small lending fund and bringing the found just $4 billion, 14% of the money set up. and only only 332 banks across the country were able to access the funds. mr. secretary, i truly, personally believe that the small business lending fund error was that it wasted today's resources on yesterday's problems. it was in 2008-2009 when small businesses were not able to

secure access to capital. but we didn't do anything. then it wasn't until 2010 that -- a year after we passed the legislation, that the program was up and running. so at the height of the financial crisis, small businesses struggled to find credit. but today they struggle more with -- so you put a solution to a problem that didn't exist, because basically you bring a solution to the banks. you know? with interest rates effectively at zero and deposits at all-time high, brangse at ample capacity to lend. so still now small businesses are struggling. and when people try to explain why is it that in the 1990's we created 3.6 million jobs. small businesses did it.

why is it that we are not doing that today? >> i agree with much of what you said, but i want to change one thing. this president and that congress did dramatic -- with the help of your leadership -- dramatic things to the s.b.a. and in addition did substantial tax cuts for small businesses in that early stage of the crisis. >> i'm talking about this bill. >> bill, although it took a long time design it. it was always also very well-targeted to make sure there was no credit constraints across the country but you are right to say the biggest problem facing small businesses is weak growth. and weak growth sales. the best thing we can do about that in addition to making sure they can get creth credit so make sure we make the economy stronger so that's why these tax cuts and things are so important. if congress were to enact these

but you need credit, too, because this is your life's work. they need oxygen in this context. the reason why you saw limited participation was in part because as you said, some banks have plenty of capital and we only got applications for about 1/3 of the authorized assistance but only half of those banks met the standards in the law. and it's less than we thought. we're a little surprised by the take-up. but you're right to point out the most important thing so have demand greater and of the products and services small business create. >> thank you mr. secretary for taking the time to be with us. one of the advantages of waiting while there's votes question get to ask the questions. so i wanted to talk to you about the china currency bill that just got passed by the united states senate and by somebody who represents a large

portion of those affected i'm concerned about the ramifications this has. currently we've had little about the plans of the administration. we heard the president is going to put his veto threat throufment if this were to pass through would you recommendation be to the white house to veto or pass it? >> if this bill were to advance, then congress would or should towards concerns raised about the consistency of the provision with our international commitments. >> specifically the world trade obligation. >> yes. >> now we have a problem which is i think we all need china to let their currency rise more rapidly and need to find a better way to address the whole range of practices chinese continue to do to subsidize and disadvantage u.s. companies and we are very concerned thabt and

working hard to address them, and we have not made enough progress. we want to build on that progress. >> if the bill were to go and sometimes tough opportunity to say address those things and sometimes it does and sometimes it doesn't. but if it were to go now what would your recommendation be? >> we would want congress to towards concerns that exist the concerns that would violate our international existence and i won't go dwhrooned for reasons you can appreciate. >> if i can jump to something else. overseas regulators have made it clear that they will not follow the lead from the united states an number of things including the volcker rule and swaps 716. should this make you skeptical that they will not harmonize the rules with the united states on other important

provisions as well? >> i'm a little worried about this but we would never expect the tworled match us on ore things so i think we have a good chance on the fundamental things with finance and other things around the world that we have a -- we're going to work hard to come to a common position >> i had some other questions with regard to the fsoc and derivatives. specific designation. which you are in the process of trying to take a look at those. about how many of those do you think would fall under that? >> i don't know yet. but i'll tell you what we're trying to do. we're trying to define the mix of size and risk that requires

us to take a closer look -- that's the motivation for this. it's an important thing to do. because we have a huge risk doing basically what banks are doing and that was devastating and so we're trying to make sure the scope of that authority will stoned institutions that fell outside of those safe guards but need to be under them. >> if i could just go out, and we don't like to deal in hypotheticals. but there are companies that have actually filed chapter 11 and gone through -- what we

learned was banks and institutions that are like banks they borrow short and long -- vulnerable to runs. those institutions require a modified -- you need somebody to be able to lend in the financing world, and you need to adapt that model as we did, after the s & l crisis to make sure you can -- >> i will and i appreciate my time is now, but i want to talk about -- did not suck that oxygen out of the air, yet they are considered under that

designation right now. we're going to try to get that balance right. and if the council adopts this guidance we had an opportunity to visit and have a chat. let me just say at the outset i'd like for you to pass on a couple of words of commendation to members of your staff.

mr. tim, who is your assistant secretary of treasury for stability. and miss alvina -- who we decided to approach this whole s whole war -- home foreclosures situation as a ground war. we put together home foreclosure prevention workshops. i just want to commend your staff. please pass word along. carol m. burke and andrea rosett a rosetta. we could not have done it without them. we are planning for the next one. the goal is 10,000 homes that we could save.

by what it about this. getting there, working on this, i learned a lot. we are losing homes that we should not. one of the areas that we found, one of the reasons we were successful, bank of america, for example, brought underwriters with them. meaning that they could go ahead when we were there and write down the loan, and able to modify it. if we could incorporate that with all of the other banks, you do do this. this is something you are to be commended for. this is the way that we are really going to win this war. helping people stay in their homes. getting on the ground with them. getting them face to face with our encouragement.

let me ask you to respond, could we work to make a program successful? the reason it is not working as it should, basically it is it voluntary. could you comment on that? >> button start by thanking you for commending the people that worked so -- let me start by thanking you for command of -- for commending the people that worked so hard. regarding living with limitations, there are really three types of limitations we discovered. the number of people that we've got would be eligible are a fraction of what we thought. meaning that there are far more

people than we thought with a jumbo mortgage where people can meet their payment or have too much debt. they're willing to on some things, but not the rest. that is one limitation. the fact this is voluntary is a constraint, but not a fundamental constraint. we are still looking for ways to expand the reach of these programs. we have proposed as part of the jobs act, asking congress to appropriate substantial amounts to the department of housing or terribly concentrated foreclosures. we think that that would be helpful.

to make it much easier for americans to refinance. we are trying to get a huge amount of vacant property. using all of the authority that we have. we are happy to get suggestions from you on how to do that at the ground. >> what would you say that you need in terms of that authority? >> to help with neighborhoods that is why the jobs act can give substantially more resources. you would have to give us authority over fannie and freddie. >> one of the things that we

found out in these workshops, in having fha there, fannie and freddie there, we are able to get the banks that would be able to work closer with the program to interact with the fha is. that might be an area where we can improve upon. >> that makes sense. although we have had only a little over 800,000 people, it is 400,000 people in the marketplace. a big reduction in the month the marketplace. we have a lot more risk that we need to work to avoid. we will do everything we can. >> thank you so much. i appreciate your appreciating

the job they are doing. >> secretary, nice to see you. back in april, another secretary testified before the committee. he said he would make it a top priority to make sure that the regulation process was well coordinated. in fact, i think that you said this morning that a failure to coordinate will making will be enormously expensive to the economy. as the overseer of that process, what you're doing to go above and beyond and get this coordination? >> under the laws passed by congress, i was given the responsibility to try to coordinate, but not the authority to force it.

i am doing which you would expect me to do. encourage them to get more closely aligned and make sure they are looking at the complete scope. of course, as imposed, it does have costs. but, you did not give me the authority to compel them to work closely together. they exist within an independent statute of mandates. where they have the flexibility to be more aligned, they are. >> as an example of that, particularly on derivatives and business conduct standards, they have got coordination and mutual agreement on those.

obviously, those are important issues to the economy. i think it should make a good point. that you were not given the authority to compel. so, is this a flawed process? as you say, this is maybe the most important thing that can happen for the economy. if the process is not going to work and we do not have harmonies between rulemaking, what direction should we be going in? >> it is a dramatic improvement in the system that we had before the law was passed. they recognize, if you had them here with me, they had committed the same basic objective. a very elaborate and closely coordinated process.

you will want to see it but we do, how they are committed to it. it is a bit messy to look at, i agree. we have got to keep them emphasizing the importance of it. >> if it is not working, what is the alternative? should we elevate this to another level? a working group? >> you do not need another committee, that is for sure. you have enough. there is no committee to tell them what to do, and i would not seek that authority. i think it is working, it is just that we cannot be certain that it is going to work well enough. but i do take an optimistic view. >> you said you were worried

about the cumulative burden of regulations. just the first 100 to regulations that came out, for example, according to the regulators, will take 10.8 million hours of compliance. we did a press conference, not long ago, and you may not know this, but you did a stint in new york. they built the empire state building in 7 million man hours. how are we not just suffocating financial markets when we have just begun? >> i think you are too worried about the cumulative impact of these financial reforms. we are not going to get it perfect, but we saw what happened when we got it wrong.

we have a chance to fix that. i have said this over and over in public. tougher standards overtime will make sure that we do not hurt the recovery. and i do not believe that there is credible evidence to support the conclusion that the rules, as they are being designed, are doing material damage to the basic objectives that we seek. there are consequences. they will raise costs. that is their objective, in some ways. >> i think that that is the reason the coordination is extremely important. many of those regulations are coming out from multiple agencies. when we talk to people in the

regulation community, they will tell you that more coordination is needed. even though you might not be able to compel, you spend a tremendous amount of energy to make sure that that process is moving along. >> i do share your view about the importance and i am spending more time than you imagined. thank you. >> i did not know anyone else was ahead of me? >> sorry. >> mr. secretary, i assume that a day like this becomes a long day for you. >> that is a bad, good debate to have. fun to be with you again. >> hopefully you are well cap unaided. as a side issue, i am trying to learn more about cause of free -- basel 3.

i have seen some discussions. ally under the impression that bonds from fannie and freddie tier 2? here t2 -- >> i can give it to you in writing. basically we said you would have to meet with, and writing. that is the first capital requirement. we do allow you to use other forms of capital. >> within tier 1? >> within that one, we are using others. >> i am trying to educate myself. like understanding is that, like in fsoc, some of the additional

premiums out there are a couple of hundred billion dollars beyond what would have been a requirement. >> i have read those reports. i do not believe those estimates are accurate, but i would have to talk to the fed about it. you are correct in saying that we have proposed assets to do this. the largest institutions in the world holden additional buffer of capital. >> i am still trying to hunt for the math that tells me what creates a level of safety but polls so much capital out of the markets that we inhibit economic expansion. my fear -- are we headed towards a layering that is well intended with too much capital moving away?

>> i do not think so. first of all, your right to say there is no science to that basic choice. but there is always someone willing to make a florida. rigid formula. -- formula. we are trying to get it more conservative so that there's less chance for the fall in the future. an additional burden on the economy, also a shift in the risk that does not make us better off. we are trying to get the balance right for those reasons. a basic sense is that u.s. firms on average are very far along to meeting those requirements already. and it seems, on the basis of independent evidence, that the remaining fireman's that we face over longtime, their ability to build their way in, because of

that we think we can have a limited effect on this fragile recovery. >> two other quick things. running back and forth, listening to your discussions about mortgages and foreclosures, i have to be one of those people that believe that we do not try to help back to our residential real-estate market until we get the glut of vacant homes. what is the estimate, up 13% being functionally vacant? a lot of well-meaning mortgage foreclosure moratorium in many ways have made the problem worse, lasting longer.

ultimately, bringing back home values. someone has to be here to grind through this. what was the performance? >> much of what you said is right. we will not do the system any good if we leave those broader systems as broken in frozen as they are. in many ways, the best things you can do for those communities is but those properties are in better hands. there is still a very strong argument, economic arguments that you want to make. you want to make sure that people that have an income can afford to stay in their homes. we are trying to help that. i do not think we are giving away of this happening. >> you did say something that concerns me. this is one that i give fannie

and freddie some credit for. some of their best practices they put out over the last couple of months seem to do that mechanically. if you cannot get there, we cannot let this slow decay of foreclosure menger. you happen to hit a decision point. >> what we try to do is to say that some people need to be given some help to transition in some ways. faugh we have mixed approaches across the system. on the security basis it makes it much harder than it needs to be. >> i will load if you have a staffer -- i am a fan -- we are -- we were trying to write for a couple of months a down payment ira. believe it or not, we keep

running into regulatory hurdles because we have to do three or four very different things. >> happy to do that. >> fenty, mr. chairman. >> fenty. >> mr. secretary, we appreciate your testimony. i want to end by a positive note. in june of this year, you said there was a strong case for requiring large firms to hold more capital relative to risk than smaller institutions. i agree. he said that by making this judgment, central banks and supervisors need a balance to provide strong cushions against loss, but not so high to drive the reemergence of a risky shadow banking system my

question is, with basel ii, along with all the rules imposed by dog frank -- dodd-frank, the good and bad, will there be a shift towards what they call a shadow banking system? >> we do always worry about that risk, but i do not believe it is likely. we will be attentive to that for the reasons that you said. >> great. i appreciate that. a significant move away from highly regulated financial activity in the regulated sectors, how would that affect financial stability? >> we saw what some people call

the shadow financial system. affectively doing what banks do. they appear to be larger than the traditional banking system. when the storm came and funding ran from those institutions, they collapsed and put a huge pressure on the economy. >> mr. secretary, there have been 3700 regulations over the last year that have been enacted. they are actually about regulations and the regulators and their response. there are holes 4300

regulations still in the pipeline. 219, our best estimate, and economic impact of $100 million or more. i just closed at this hearing back. the more important policy that you can adopt is to promote, not restrain policies that create capital investment, jobs, " we sometimes referred to as growth. the american people, whether our country is whether populations are no richer.

we sent you a letter. the president did say that he would look at the different regulations and rules to see if they were restraining economic growth. making that a priority. that creates jobs. thank you for your attendance. thank you for working with us to start this year early. i think that we worked with you said you would be able to go to the white house at 4:00. i will note that some members may have additional questions for you. they will submit those in writing. the hearing will remain open for 30 days so that written questions can be submitted to you.

also, your written statement, you are welcome to do that. this hearing is adjourned. thank you for your attendance. >> thank you. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> conservative leaders and republican candidates will attend the family research council bogor summit this morning. live coverage starts at 8:40 a.m. eastern. on c-span 2, the department of state will hold a public meeting on the proposed pipeline project. the project would run from alberta to the gulf coast. live coverage at 10:00 a.m. eastern. >> before the presidential

election of 1916, charles evans hughes was a-2 term governor in new york. although he lost his bid for the presidency, is impact remained. serving alternately as chief justice of the u.s.. one of 14 men featured in an " the contenders." tonight, 8:00 p.m. eastern. in a preview, watch more about him on our special web site for the program. "washington journal" is next. this afternoon, our coverage of the family research council. we will hear from rick perry, herman cain, and newt gingrich at 2:00 p.m. eastern time. at 2:00 p.m. eastern time.