maintains that there is only one china in the world and that taiwan is part of china. not long after that, and admiral said that he shared the view of a "peaceful reunification of china." the me ask you mr. moy, the people's republic of china is a dictatorship. it is a gulags state and would we have wrist -- wished that reunification of west germany when there wasny a cruel dictatorship in east germany? i think not. i think those types of statements are not helpful. oro believe as to whether not the time has come that the cold war relic -- i know all about the shanghai communiqué. he said that the shanghai communiqué said nothing about

human rights at all and that is true but use that as a dodge and a way of precluding discussion on human rights. but should we have a one taiwan policy? and secondly, the taiwan act section two points out the enactment of this is necessary to maintain peace,'s ability -- stability, and -- in their. what would happen if taiwan became under prc control and doing a will if a shift would have effects on security partners and allies in east asia, including japan and south asia? >> thank you. i think i might have been in that meeting that you speak of. it was a few years ago. thank you for your comments. to mostlike to point recently, you may have seen in the press that there has been

more dialogue between two sides. the head of the mainland affairs council's from taiwan met with the head of their taiwan affairs office. we have gone on record as saying as we support that kind of warming of ties. one of the reasons why there has been such a discussion is because we have been so supportive of taiwan, giving them the confidence so they can have these kinds of dialogs. we do have a very strong record of that area -- that. we do support the increased dialogue between the two sides. consequences, i would not want to get into any kind of hypothetical kinds of scenarios here. that this is

something as we've u.s. verio -- we view as very likely right now. >> can we anticipate what happens? we have scenarios that we consider at the pentagon. >> i don't -- it is not something that is a normal feature of our discussions, these types of hypotheticals. -- i know, it heard your remarks about the one china policy but this is a policy that has endured through many administrations. again, i think that what we have done -- and much of this has to do with the taiwan relations act -- it has given taiwan a great deal of confidence over the last two years to increase the kind

of intensity of discussions with the prc, knowing that the united istes is always in support greatly comforting to the taiwan side. >> frankly, some of our diplomats, including our former ambassador, have suggested that the ambiguity and the statements that have been made could send the wrong signal to the prc, particularly as they old up militarily in or around or in proximity to why on. -- two taiwan. and the saber rattling we see in the south china sea, the ugliness towards japan coming --t of the jane -- aging beijing, it seems like it could lead to a miscalculation about

what happens if they take taiwan. think that beijing questions u.s. result on the taiwan issue. we continue to be extremely and can did you expand our unofficial relations and that i think does a great and to help strengthen allow for a more peaceful and stable environment across the area. thank you. >> mr. lowenthal of california. >> thank you. i have one statement i would like to, before i ask any questions, echo the chair's comment. andcently visited taiwan met with government officials and found it very educational. i believe very strongly that the

state department and the government should understand the importance of taiwan being part of the tpp. i think that should be a message back. before i ask a question that many of us really, strongly believe, we should do whatever we can to encourage that development. when i was there, i was very impressed with the cross-state straight dialogue between taiwan and the people's republic of china. is the like to know what state department's involvement in that dialogue between taiwan? how can we be helpful in promoting engagement between taiwan and china? it seemed to me that the president was very proud of agreements that had been made, especially the trade agreements, the increased tourism that was

going on, the increased flights that were going between mainland china -- i would like to know what our involvement in that has been. the second question is, what is currentspective on the and forthcoming political situation in taiwan, including the 2016 presidential election in which the president will be termed out? thewill that affect cross-strait relationships? let be a defining issue in that election -- will that be a defining issue in that election? >> we don't play a direct role. the dialogue i was referring to was really the first time in 60 years of such a discussion.

is givene have done taiwan a great deal of confidence through our policies, our direct assistance, and that has enabled them to have more engagement across the strait and we believe that more engagement, , or at ay if it is pace that is consistent with the aspirations of the people on weh sides of the strait, would support that because we think it creates a more stable and peaceful environment. but, it does have to come at the pace that the people feel comfortable with. in terms of the upcoming election, we don't really speculate on how that is going to affect cross-strait

relations. it is a good time to highlight how supportive we are of the thriving democracy that exists in taiwan. .t is remarkable just personally, the first time i went to tie one was in 1978 -- taiwan was in 1978. you cannot imagine the change that has taken place there. esther chairman, when you go it just highlights the values that they share with us. they know very well that it is an energetic democracy that exist there. i want to speculate on getting involved in their the rest of politics and how it will play out in terms of their foreign cross-straite policy, but it is a good time to celebrate a remarkable story that exists in asia, the democracy in taiwan. thank you and i yield back my

time. i would like to personally thank mr. sherman for raising the issue of resident chen -- president chen, which he did strongly recently. prior to that trip, i had been there about a year ago with another of my democratic colleagues, the ranking member of the asia and pacific many -- committee. go, we wenticular down to the prison were president chen is being held and he has been they're going on five years now. career correct in their -- conviction for corruption charges. there are a whole lot of aspects which we could discuss in great detail. for example, there was an argument that there was a judge who is more favorable to him who was replaced by a judge less

favorable. they're all kinds of stories and i don't want to go into all the details. the fact is, he has been in prison for going on five years now. i have read the medical reports. i have talked to the doctors that have examined him. i have seen him with my own eyes. i have met with him many times when he was president of taiwan. he is the second democratically-elected resident and served for eight years. i think mr. sherman is absolutely right when he says there is something wrong when one administration comes in and the previous administration is in prison. something is not right. -- i have seen with my own eyes -- the man has parkinson's. he shakes almost constantly. cardiovascular problems, deep depression, a whole range of things. we have talked to the president

about it and i believe that medical parole, as mr. sherman mentioned, is a logical conclusion here as to what ought to be done. does the administration have a position on granting president chen medical parole? we're not saying he would be free, but he can at least go home to his family with whatever your cs -- whatever years he has left. >>.gov for raising that issue. you for raising that issue. as i mentioned earlier, we have -- access to health care will be transparent, fair, and impartial. if there are occasions, and i

think this is a general statement from the u.s. government, when there are cases when there are such health certainlywe would in thise of that to, case, the taiwan authorities, but other governments as well when there may be some humanitarian considerations that could be made. certainly we believe that the was tried -- >> i'm not talking about the original case. i'm talking about now. i was an excellent answer, but my question is, does the administration have a position on medical parole? >> you said that they ought to be treated humanely in prison. we think he should not be in prison at this point in time. he is there now. we're saying that medical parole, at this point, should be

granted. >> i think what we have done -- >> i'm just asking, do you have a position on that? if you don't have one, that is ok. i would like to know. >> i don't think that we take a position -- >> thank you. alas you for another position if you have one. the president, the vice president, the defense ,ecretary, the foreign minister the defense minister and foreign minister, cannot come to washington dc. it we want to meet with them, we have to go to severance is goa baltimore. they are not allowed to come to the capital of the united states which i think is a travesty. we have introduced legislation in numeral times two dump that policy. which i think is an -- unfair to taiwan. does it ministration have an opinion on that? to have ourue

one-china policy that is set forth in the communiqué -- >> i am aware of that. do you have a position on whether they should be up to come here -- the travel of taiwan authorities, that is consistent with those policies. >> so you believe we should continue with the president, vice president, the foreign minister, and defense minister should not be allowed to come to washington dc? >> i think our policy has been consistent over a number -- >> i am asking for a yes or no. >> i believe it will continue. >> you are saying that they should not be allowed to come here. we are saying we should change that policy. you are saying stick with it. >> i'm saying that our policy has been consistent and i believe will be consistent in the future. will go to a couple more

speakers, but then we are going minutess for about 25 for two votes and come right back so the junior members will be able to ask their questions. with that said, let's go to mr. gerry connolly of virginia. >> thank you mr. chairman. i look forward to the questions of the junior members. mr. want to complement elliott for being such orally -- for being correct today. -- s a splendid what in your opinion does the taiwan relations act commit the united states do in terms of the military relationship? >> we are obligated to make

available to taiwan defense articles and defense services that are necessary to enable taiwan to maintain a sufficient self-defense capability. it is an obligation that we don't shirk. these obligations -- not the obligations are under constant review, but the needs of taiwan are under constant review. >> good. i would agree with you. would you also agree that something beijing does that they stick of teddy roosevelt's we can talk softly, but we also have to carry a big stick, that we will keep our commitments and whatever happens in the taiwan strait will happen peacefully. it will not happen by military force in the united states is prepared to make sure of that.

do you think about chinese behavior among various islands that that messages may be more important than ever from the united states in respect to taiwan? prc don't think that the resolve,result -- our our continued presence in the east asia region -- >> really? with respect to taiwan? >> absolutely. in 2001,ited states, tentatively agreed to sell diesel submarines to taiwan. 13 years later, where are we on the submarine sale? toas you know, we continue review the defense needs and we make decisions that are appropriate. >> mr. moy, have we sold a

single one of those diesel submarines to taiwan 13 years later? >> i am not aware of that. >> is there any chance that beijing objects to the sale? >> we don't discuss arms sales were defense -- >> did they express themselves publicly or privately through any channels that you are aware of? >> i am not aware of -- >> what would be the hangup? why not sell them? notgain, we make decisions with the people's republic of china in mind. we make those decisions based on what we feel our needs -- >> so the decision tentatively to sell submarines to taiwan in 2001 is still under consideration as to whether it meets your definition of appropriate defense for taiwan? ,> there are a range of systems a range of different packages that we constantly -- >> what about f-16's?

congress has bitterly said that the sale of 56 f-16's make sense to us. is that under review? >> we made a determination that the f-16 retrofit was the most propria type -- appropriate type of weapon system to sell to taiwan and we continue to believe that that is the case. >> what about military exercises? any consideration to maybe including taiwan in impact? consider -- this is our policy worldwide. we are always considering different participants. i am not aware of such consideration but i think my colleagues in the defense department can better address

that. >> we don't ever want to be productive -- provocative. we need to stand by our alliances. we want a good and productive relationship with the people's republic of china but i also know from history that beijing respects strength. peace through strength. our commitment to taiwan is an extraordinary test case and it seems to me that we have commitments with taiwan. beijing does not have to like it but they will have to respect it. with that, i yield back. >> we will go to mr. randy weber of texas. >> thank you. mr. moy, i'm going to follow-up on mr. connolly's comments about actually selling, or being concerned about taiwan's defense capability.

that you don'tr -- when you make decisions, you don't consider beijing in your decisions and you just reaffirmed that with my colleague, mr. connolly. think chris raise the issue of a one-china policy. does it not bother you that that exists, that there are statements that people have made, high-level officials that said they agreed to a one-china policy? does the administration not view that as a problem? are one-china policy is one that existed for several decades. >> altaic that as a no. let me follow up -- i will take that as a no. let me follow up.

you have a submarine sale. you don't take beijing into account. words and actions have consequences. would you agree that you would be ok with a one-russia policy when it comes to crimea and the ukraine? is that it can do the same kind of ideology? issuesn't speak to those , but again, we are obligated to provide those defense materials and services to taiwan. we have been through several administrations very vigilant in terms of providing that. >> in view of recent events, wouldn't you agree that the administration ought to be thinking about remapping its policy, that perhaps we want to get in gear and get the exact date of diesel submarines? i think mr. connolly said 2001. that is 13 years. at the world changed in 13 years

-- has the world changed in 13 years? >> in what sense? >> in your view, the imminent tryingof mainland china to, what ever you want to call it, take back over taiwan. we have said that they are close friend and ally. the fact that their officials cannot come to washington dc is a problem. events around the world should indicate that now more than ever we need a stronger relationship with taiwan. does the administration understand the seriousness? in light of recent events, russia, ukraine, crimea, things are not getting any better. is it possible to step up the program to sell those weapons to taiwan? maybe before the next 13 or 14 years? >> is a noted, those are under constant review. as to ther point

world changing and adjusting to those changes. remarkably, there is more between taipei and beijing than there ever has been before. >> i am running out of time. they're going to be exercises over in hawaii. beijing was invited, taiwan was not. why? policy, inthat our ofms of strengthening military to military relations with beijing, are fairly apparent. can defer to my colleagues in the defense department to ,omment on the status of that or those relations. our rebalance, our consideration of making or

strengthening the stability and peace in east asia, i think this is a good idea. >> obviously, but they were not invited. thatit strike you at odd beijing is not near as concerned about what we're doing as it seems, and words and actions have consequences. witness russia's recent invasion in crimea. does it not strike you as odd that we have seen -- we seemed a lot more worried about them than they do about us? you take that into account? >> i don't think we balance our concerns -- >> that is obvious. is that ican tell you think it is a very smart thing to expand our relations with all countries in east asia and i don't think that any of this comes at the expense of taiwan and i think our relations with taiwan have been extremely toong and continue

strengthen those relations. >> thank you. [captions copyright national cable satellite corp. 2014] [captioning performed by national captioning institute] >> both chambers of congress are in recess this week. they are back on monday, march 24. the first measure of debate in the senate is in aid bill for your crane. also on the senate's agenda, extending jobless benefits, doctors,payments for and you can see live coverage on the senate floor on c-span2. house returns, live coverage here on c-span. today announced sanctions on russian officials for their support of the crimean vote in ukraine. his announcement was just under five minutes.

>> good morning, everybody. in recent months, the citizens of ukraine have made of which is here -- heard. the future of ukraine must be decided by the people of ukraine. that means ukraine's sovereignty and territorial integrity must be respected. international law must be upheld. russia's decision to send troops into crimea has drawn the global condemnation. from the start, the united states has mobilize the international immunity -- community in support of ukraine. and to reassure our allies and partners. we saw this international unity again over the weekend when russia stood alone defending its actions in crimea. as i told president putin yesterday, the referendum was a clear violation of ukrainian

constitutions and international law. it will not be recognized by the international community. today i'm announcing a series of measures that will continue to increase the cost on russia and those responsible for what is happening in ukraine. first as authorized by the executive order i signed two weeks ago we are imposing sanctions on individuals responsible for undermining the sovereignty, territorial integrity, and government of ukraine. we're making it clear that there are consequences for their actions. second, i have signed a new executive order that expands the scope of our sanctions. as an initial step, i'm authorizing sanctions on russian officials. am operating in the arm sector in russia and individuals who provide material support to senior officials of the russian government. if russia continues to interfere

in ukraine we stand ready to impose further sanctions. third, we are continuing our close consultations with our european partners who moved ahead with their own sanctions against russia. tonight vice president biden departs for europe where he will meet with leaders for his allies in lithuania. i will be traveling to europe next week. our message will be clear. we have a solemn commitment to our defense. we will uphold this commitment. fourth, we will continue to make further russia that actions will continue to isolate russia and diminish their place in the world. this will continue to stand together. we will continue russian military intervention in ukraine and will only deepen the economic isolation and exact a

greater toll on the russian economy. going forward we can calibrate our response based on whether they choose to escalate or de-escalated the situation. i still believe there is a path to resolve this diplomatically in a way that addresses both russia and ukraine. that includes russia pulling its forces back to their bases, supporting the deployment of additional monitors in ukraine and engaging in dialogue with the ukrainian government which has indicating the openness to pursuing constitutional reform as they move forward toward elections this spring. throughout this process we are going to stand firm with our support for ukraine. as a told the prime minister last week, the united states stands with ukraine to determine their own destiny. we will continue working with our partners to offer ukraine's economic support.

as we go forward we will continue to look at a range of ways we can help our ukrainian friends achieve their universal rights and the security, prosperity, and dignity they deserve. thank you very much. we'll be available for questioning. thank you. >> we're focused on making sure that we can eliminate barriers to getting those networks in place. building up these networks is our priority, so sometimes there are no -- our local siting issues, there are federal rules that might affect how we deploy things what the lighting might be where the impact time, or the environment. we want to make sure that we are sensitive to those issues. at the same time, we want to make sure that we move forward on deployment because our customers, those who use these devices every day in their lives

, depend on having a good, strong connection of getting the data they want, when they wanted and wherever they wanted. that means having a robust wireless network. infrastructure, tonight on "the communicators" at 8:00 p.m. eastern on c-span two. boat -- "the open communicators," book tv with a look at russia relations. on "the limits of partnership." tonight on c-span three, at 8:00 eastern, a visit to the wright brothers aviation center in dayton, ohio.

eight trip to the maritime museum in washington state. we stopped in chattanooga, tennessee. finally, the musical history of macon, georgia. concluded -- yes, i would be glad to yield. i looked at both sides and the only gentleman on that side that even made a move was mr. walker. the gentleman did not stand, the gentleman did not rise. i resent the statement -- >> well, i am sorry -- if anyone would have dance, i would've recognized him. so don't get the quack i did not mean to suggest that you are not acting with fairness at all. what i did mean is that we have a consensus deal that your work

with united states -- >> that is not what you said. -- weid it was not a fair went through all the procedures of votes. i would never do a thing like that. there was not a man on either side of the aisle that could do it. >> i respectfully suggest that i did not mean to offend you and -- >> you have offended me. i will accept your apology. >> i'm solidly -- i am sorry for that. from ourore coverage 35 years of coverage on our facebook page. today isrought to you a public service by your local satellite or cable provider. president obama has nominated stanley fischer, a former owner of the big of israel, and a former vice chairman of citigroup, to serve as the first chairman of the federal reserve. the senate banking committee

held a confirmation hearing last week. we pick it up with mr. fisher's opening statement. introduce your family and friends in attendance. dr. fischer, please begin. >> thank you very much, mr. chairman. i'm very happy to have my wife rhoda of 48 years sitting here behind me and friend from high school in zimbabwe, now an american citizen, attorney abrams also sitting behind me. shall i make my statement now, senator? >> yes. >> chairman johnson, ranking member crapo and members of the committee, thank you for this opportunity to appear before you. i'm greatly honored to be

nominated by president obama to serve as a member and vice chair of the board of governors of the federal reserve system. i look forward, if confirmed, to working with this committee in the coming months and years. in recent years the federal reserve has made significant progress toward achieving its congressionally mandated goals of maximum employment and price stability. nonetheless, normalcy has not been restored. at 6.7%, the unemployment rate remains too high, and the rate of inflation has been and is expected to remain somewhat below the federal reserve's target of 2%. at present achievement of both maximum employment and price stability requires the continuation of an expansion remonetary policy even though the degree of expansion is being gradually and cautiously cut back as the fed reduces its monthly purchases of longer term

treasury securities and agency mortgage backed securities. i'd like to add that in their efforts to achieve aggregate goals, policymakers should never forget the human beings who are unemployed, nor the damage that high inflation reeks on the economy and thus on the lives of so many people. the financial collapse that intensified in the last months of 2008 and early 2009 threatened in the view of some central bankers, including this one, to result in a recession even deeper than the great recession we experienced. the federal reserve's policies in dealing with the financial collapse were courageous and effective. nevertheless, we must do everything we can to prevent the need for such extreme measures ever again. among the lessons of the financial crisis are the necessity of dealing with a too big to fail problem and the necessity of greatly strengthening the resilience of

the entire financial system. the dodd-frank act put in place a framework that should make it possible to advance these goals. the united states has moved rapidly to put a series of important measures into effect. among them are the significant increase in capital requirements and the introduction of countercyclical capital buffers for banks, the introduction of a liquidity ratio, the sophisticated use of stress tests, the importance of which becomes ever clearer, enhanced resolution authority in the single part of entry in dealing with sifis, living also and the dealing with the oversight council, the fsoc. at the international level, the stability of the financial board whose membership includes the countries of the g-20 and a few other financial centers, provides an important mechanism for strengthening international coordination of financial regulation.

while we've undoubtedly made important progress in strengthening the financial system, we must also recognize that maintenance of the robustness and stability of the financial system cannot be attained without strong regulation and supervision. financial systems evolve and while financial crises have many i'm larts, they are not identical. the fed must remain ever vigilant in supervising and regulating the financial institutions and markets for which it has been assigned responsibility, and it should be no less vigilant in its surveillance of the stability and resilience of the financial system as a whole. the great recession has driven home the lesson that the fed has not only to fulfill its dual mandate, but also to contribute its part to the maintenance of the stability of the financial system. almost always these goals are complementary. but each of them must be an

explicit focus of fed policy. in all the situations of which the fed will have to contend in pursuing its goals, it will be called upon to make wise decisions which draw on the experience and the analytic skills of the staff and of the members of the federal reserve board and the federal open market committee. i hope that, if confirmed, i will be able to assist chair yellen and my future colleagues in making those critical decisions and so to the contribute to the well-being of the citizens of the united states. senators, i thank you for this opportunity to appear before you today and for considering my nomination. i would be pleased to respond to any questions. >> thank you. mr. powell, please proceed. >> -- my brother matt in from california. chairman johnson, senator crapo and members of the committee, i

am honored and grateful to president obama for the privilege of appearing before this committee today as a nominee to the federal reserve board. i have served as a member of the board since may 2012. if i am confirmed to the new term for which i am now nominated, i'll continue to work to the best of my abilities to carry out the responsibilities of this office. over the past two years i have been deeply involved in the work of the board and the federal open market committee. important challenges lie ahead and i am eager to play my part in meeting them. before joining the board, i spent close to 30 years working in the financial markets as an attorney and investment banker and an investor. i believe my practical experience of the private sector and the financial markets provides a valuable perspective in the work of the board and the fomc. i also served as assistant secretary and undersecretary of the treasury of finance from 1990 to 1993. throughout that period i worked closely with this committee and appeared in this room many times as a witness in hearings and

markups. more recently i testified before this committee on anti-money laundering and the bank secrecy act in march of 2013. the early 1990, the time of my earlier service were turbulent years for the economy and the markets. we faced the savings and loan crisis and the resulting bailout, a severe credit crunch with some businesses and households unable to get credit on reasonable terms, the insolvency of the fdic's bank insurance fund and the failure or near failure of several large financial institutions which squarely presented the problem of too big to fail. i was deeply involved in addressing these crises and in the major legislation that followed including particularly the federal deposit insurance improvement act. i also led the administration's efforts to address a very troubling episode involving market manipulation and submission of false bids in treasury auctions by employees of the investment firm solomon brothers. that scandal resulted in the government securities reform act

of 1992 as well as extensive revisions to the treasury's auctions rules. today our economy continues to recover from the effects of the global financial crisis, unevenly and at a frustratingly slow pace. the task for monetary policy will be to provide continued support as long as necessary and return policy to a normal stance over time without sparking inflation or financial instability. this will require a careful balancing as there are risks from removing monetary policy accommodation too soon as well as too late. the regulation and supervision of financial institutions and markets are as important as anything the federal reserve does. this is at a time we continue to investigate the weakness exposed during the crisis and set the stage for another long period of prosperity. working with fellow regulators around the united states and the world, the federal reserve is engaged in a once in a generation renovation of the financial architecture.

there's much work to be done both in the implementation of congress's decisions and in finalizing and implementing international accords like bozal 3. at the heart of these broad reforms is the project of ending the practice of protecting creditors and sometimes equity holders of large global financial institutions or too big to fail. there's been significant progress but more work is left to do. realizing this objective will take time and persistence. i am eager to play a part in that. thank you again for holding this hearing today, and i'll be pleased to answer your questions. >> thank you. dr. brainard, please proceed. >> chairman johnson, ranking member crapo, distinguished members of the committee, i appreciate the opportunity to be here with you today. it's an honor to be nominated by president obama to serve on the federal reserve board, particularly under chairman yellen's leadership. i'm very grateful to my husband

and my three delightful daughters for supporting my return to public service after a wonderful but too brief time at home, and i am happy to be joined here this morning by my husband kurt and my daughter kira who is representing her two sisters very ably. i cannot think of a more important moment for the work of the federal reserve. if confirmed, you can be sure i will be intensely focused on safeguarding the fed's hard won credibility in preserving price stability while supporting its indispensable role in helping americans get back to work and strengthening its work in ensuring a safe and sound financial system. the federal reserve has a critically important and appropriately delimited role in addressing the challenges we face as a nation in the wake of a deeply damaging financial crisis. it will need to carefully calibrate the tools of monetary policy to ensure an appropriate pace of normalization while

supporting the fragile recovery in our job market and ensuring inflation expectations remain well anchored. the federal reserve will need to continue robust implementation of financial reform and enhanced supervision to ensure that no financial institution is too big to fail and to discourage the massive leverage and opaque risk-taking that contributed to the financial crisis. at the same time it is critical that the fed protect the savings of retirees and sound access to credit for consumers, small businesses, students and families seeking to own their own homes. for me service on the federal reserve would be a very natural progression, building on work that i've done previously at the treasury department, the white house, in academia and in the private sector. it would enable me to continue my life's work of promoting an economy that delivers opportunity for hard working americans while safeguarding financial stability. it's an honor to be considered for this position. if confirmed, i would look forward to working with members

of this committee to advance our shared goal of making sure our financial system works for all americans. thank you. >> thank you. mr. velasquez, please proceed. >> thank you. good morning, chairman johnson, ranking member crapo and members of the committee. i would like to start by introducing my wife emily and two boys sebastian who is 7 and javier who is 4. they were promised two candies if they behave well. i am grateful for their love and support which means everything to me. i'm honored to appear before you today as you consider my nomination as assistant secretary for the u.s. department of housing and urban development office of fair housing and equal opportunity. i came to this country in my mid

20s, have proudly become a citizen and have devoted the last 15 years of my life to public service. my career has been marked by the pursuit of justice and the defense of civil and human rights for people from all walks of life. i'm committed to providing equal opportunity in combating discrimination and becoming assistant secretary for fair housing would be a tremendous opportunity to continue to fulfill that commitment. my commitments are based on my record as a leader, bringing people together. my experience in and knowledge of the field of non-discrimination laws, regulations and enforcement including fair housing and my management abilities, particularly with respect to streamlining the investigation of discrimination claims for careful analysis and expeditious resolution. most of all, i want to highlight my experience in finding every possible way to inform the public about the rights under the law.

in my previous positions, i have demonstrated expertise in working with federal civil rights laws, regulations and programs including title viii of the civil rights act of 1968 and many other federal and anti-discrimination laws in employment, education, public accommodations and publicly funded services and programs. i served from 2007 through october 2013 as director of the district of columbia office of human rights. in this capacity i have been ultimately responsible for the investigation and disposition of thousands of discrimination cases filed by individuals and organizations. i have also been responsible for helping establish or modify rules and guidelines to investigate and adjudicate employment and housing discrimination complaints under one of the most comprehensive non-discrimination statutes in the country, the d.c. human rights act of 1977. in doing so, i have studied and applied federal laws and

regulations from hud and other agencies for consistency and the enforcement of civil rights in the district because this is non-drim law it's substantially equivalent to the fair housing act, for many years the office of human rights has been investigating with hud. this has allowed me to apply the rules and guidelines emanating from hud's office of fair housing and equal opportunity for the proper investigation and disposition of title viii complaints. with respect to management, in addition as management for not for profit, i have provided management for the d.c. office of latino off fairs and d.c. office of human rights. in d.c. i was responsible for designing and implementing policies and programs for the economic and social advancement of the latino community. at the office of human rights, i led a successful agency of talent professionals working on

combating discrimination in the nation's capital. i'm confident of the duties that we after heaved under my leadership, whether in enforcement or racing awareness of the wide range of protections that people living and working in d.c. enjoy. mr. chairman, ranking member crapo and members of the committee, i'm honored by the president's nomination and the opportunity to appear before you today. if confirmed, i look forward to working tirelessly on promoting fair housing and in cooperation with members of this committee. thank you for your consideration of my nomination. like forward to your nomination. >> thank you. mr. mcwatters, please proceed. >> chairman johnson, ranking member crapo and members of the committee, thank you for the opportunity to appear before you today as an ncua board nominee. my wife denise and our two teenage sons clark and parker

were unable to join me today, but they are watching over the net. my sons were intrigued by the prospect of a televised job interview and reassured that such approach is rarely adopted by other employers. in particular i wish to thank denise for her tireless and enthusiastic support in this endeavor and many other endeavors over the past 30 years. truer words i have never spoken. i'm especially grateful for minority leader mcconnell's recommendation of me to the president for this position. it's an honor and a privilege to be nominated to the ncua board, and if confirmed, i will do everything within my power to fulfill the trust placed in me by the u.s. senate. ncua plays a critical role as a regulator and insurer to protect

the hard-earned savings of more than 96 million americans. if confirmed, i will work diligently to ensure the continued integrity and safety and soundness of our nation's $1 trillion credit union industry in an ever-evolving marketplace. on my qualifications i currently serve as the assistant dean for graduate programs and as a professor of practice at the southern methodist university skol of law. as a teacher i found my students often benefit from the rigorous, vigorous discussion of judicial holdings and problem sets. although we may initially approach an issue from divergent perspectives, the process of debating al challenging manner in a transparent and analytical, yet collegial, yet collegial manner often produces common ground and a workable consensus.

previously i practiced law for more than 20 years, most of that as a partner focusing on tax, corporate finance and mergers and acquisitions. my government experience includes clerking for the u.s. ninth circuit court of appeals in los angeles and serve fog congressman jeb hansarling. while working alongside senator elizabeth warren on the tarp panel i sought to to balance and respect different perspectives and reach consensus based on overarching principles just like i now practice in the classroom. ultimately my colleagues and i work to produce an accurate, non-partisan analysis of the tarp and the financial crisis. i'm pleased that of the 15 reports the panel issued during my tenure, 14 were unanimous. if confirmed i'll bring the same approach to my work at ncua.

in legal practice i've often found that the fundamental issues create the most opportunity for concern. for example, does a proposed tax structure have economic substance and business purpose? likewise, in assessing the risk inherent within financial institutions, i've learned that the root causes of seemingly intractable problems are often embedded not in the esoteric but in the commonplace. for example, do financial institutions have the capital, liquidity and risk mitigation programs necessary to operate in an adverse economic environment? in answering questions like this one, regulators need to apply the law with impartiality and look at the larger picture. they need to think both tactically and strategically considering not just the desired outcome but potential unintended consequences. as such my focus as a regulator

will remain straightforward, don't neglect the fundamentals of capital liquidity and transparency. always remember the greatest threat to the financial system may reside where you least expect it, hidden within plain view. in life i've often found that -- i've also learned about the need to earn trust and to never forget that real people are affected by decisions. if confirmed, i'll bring an open mind in a risk-based, market-oriented, targeted ans transparent regulatory perspective to address the increasingly complex issues facing credit unions. i'll also aim to balance competing viewpoints, to maintain the safety and soundness of the credit union system, safeguard the share insurance fund and protect taxpayers and credit union members from losses. thank you again for the opportunity to appear. i'm pleased to answer any questions you may have.

>> thank you for your testimony. we will now begin asking questions of our nominees. will the clerk please put five minutes on the clock for each member? dr. fischer, some suggest that community banks be subject to a different degree of regulation than larger banks. do you support a tiered approach to regulation? >> -- i know how important it is that those banks survive, particularly in a farming communi community. i don't think there should be uniformity of regulation. i believe the small banks do not have to fulfill all the requirements that are imposed on the large banks, but regulators

have to do that in a sensible manner. thank you. >> governor powell, resolving global firms across borders can be a challenge but is a key part in ending too big to fail. what are the next steps to improving cross border resolution? >> i'll start by saying that i'm absolutely committed to ending too big to fail. i think it's fundamental under our system that private sector businesses can prosper or fail as the case may be and it's not something the government as a general rule needs to be involved in in either process. that said, the business of resolving global financial institutions is a challenging project and there's work going on here in the united states and all around the world on that. i think here in the united states we've done as much or more as any nation, and would point to stronger capital and

liquidity requirements, these big institutions have to pass severely adverse stress tests which shows that they can continue to perform their function even in the event of a significant thing like the financial crisis. then the third thing i'd point out is the fdic has developed a single point of entry approach to resolution, very promising. it's getting a lot of support from our major trading partners around the world. that's all positive. there's a great deal left to do here that we're working on. i would point to just a couple things. first, the senior debt requirement that we're imposing on the largest banks to assure there is loss absorbing capital in case they do fail. secondly we're looking at a proposal of some kind to deter the excessive use of short-term wholesale financing. that was a real vulnerability in the crisis. and finally we're about to propose a surcharge -- capital surcharge on the largest firms. the global challenges are, as your question states, very, very

difficult, and the work there is also going on. i guess i would go back to 2011 when the nations of the world came together at the financial stability board to agree on the key attributes of resolution mechanisms, and it's a big document-long list. i won't go through all of it. a couple elements i will point to. first, and this is common with our own system, large institutions are to be required to have living wills so that we're looking carefully at how to resolve them now in good times, in reasonable times so that we're not trying to figure this out at the last minute as we were during the financial crisis. we're actually ready for this. another critical aspect would be, our own law provides for a temporary stay so derivative counterparties can't foreclose or accelerate against collateral in terminal contracts in the event an institution enters resolution. that's critical to create the

resolution of a run that can spread to the whole system. other nations don't mainly have that, but it's part of the roadmap they will. there are many other elements i won't even think about going into. let me summarize by saying there's a great deal of work going on around the world, a lot left to do. i'm eager to play a part. >> dr. brainard, an important component of bank regulation and financial stability is the ability to coordinate with our foreign counterparts on rules. if confirmed as a governor, what experience will you bring to the fed in this area, and how would you work to strengthen global coordination for financial rules? >> thank you, chairman johnson. i think that in this world of very global financial markets it is critical to have very high degree of coordination among the

largest financial centers in order to ensure the safety and soundness of our own system. and when i was at treasury, one of my responsibilities was to work with the g-20 and with the financial stability board, with counterparts, regulators, central bankers, financial officials around the world to try to get other countries to follow our lead. i will say that the work that was done by this committee in dodd-frank put us out in a leadership position and gave us a strong place to start, and we have had some successes bringing the rest of the world, europe and asia along with us. if you look at capital, for instance, we moved very quickly to pushing for high capital standards for simple leverage to augment them for a capital surcharge as well as a liquidity framework. we've had substantial, although not complete progress in persuading our counterparts around the world to put those

things in place. but i think as governor powell was saying earlier, the one area where we really are going to have to push very hard, and if i were confirmed, this would be a high priority, is to make sure that other major financial jurisdictions have the capacity and the will to resolve their largest institutions, and they have legal systems in place to do so. that piece is still a work in progress, and that is one of the reasons i think that our proposed foreign banking organization rules are so important, to make sure our regulators have the capacity here to resolve those institutions even as resolution frameworks are moving in the right direction overseas. thank you. >> senator crapo. >> thank you, mr. chairman. i have a number of questions and i know i'm not going to get to go through them all during the hearing. although i'm going to ask each of the individual nominees for the federal reserve a question, i'm also going to ask the other nominees who don't get asked that question to respond to it

later. i'd just alert you to that. the first one, i will start with you, mr. fischer. a recent paper presented at the u.s. monetary policy forum suggests the possibility that the current monetary stimulus may involve a, quote, tradeoff between more stimulus today at the expense of a more challenging and disruptive policy exit in the future. do you agree with that? and if you see that there will be challenges or dangers in the exit from our current monetary policy, could you tell us what you believe those are and whether you believe we can make an exit in a manner that is not disruptive to our economy? >> thank you, senator. i think the exit is beginning, has begun. the extent of the purchases of the fed, the monthly amount that is being purchased is being

reduced, and conditions for the continuation of that have been described. could that theoretically be disruptive? well, you don't have to look at theory. there was the may response which i must confess i didn't think i fully understood why the markets reacted as if it were a surprise, being talked about for a long time. but when the actual tapering began, it had a much more stable impact and that seems to be continuing. what i take comfort from in sort of thinking about all the possibilities is that the fed in 2008-2009 undertook many complicated programs. as far as i know, there were no

technical failures in any of those programs, and that's a good precedent, although here we're relying more, if i'm elected, we will be relying more -- in any case the fed is relying more on the reactions of the market, and those you have to adjust to if they're not what you expected, senator. >> thank you very much. dr. brainard, i'm going to go to you next. you mentioned the dodd-frank legislation in your testimony. i worry that the aggregate impact of the rules of implementing dodd-frank will be immense and that we actually could push some financial companies into basically a regulatory death by a thousand cuts if we are not careful about the evaluation of cost benefit in terms of the regulations that are imposed as we move forward. if you're confirmed to the board of governors -- first of all, would you agree there is this risk? secondly, how would you tend to

monitor the cumulative regulatory burden that we are putting on america's financial sector? >> well, senator, i think the process of reforming -- fundamentally reforming our financial system is a work in progress. the reforms that were put in place under dodd-frank were extraordinarily important, very important to make sure that our largest institutions ran with less leverage, managed their liquidity much more carefully, held a lot more capital to absorb losses, changed their business models and are fully resolvable without any taxpayert any taxpayer involvement. so i think the pieces of the regulatory reform that are being put in place are each extremely important, but as you say, it's very important for us to be mindful over time of the aggregate impact and how business models change and make

sure that credit is flowing to small businesses, to homeowners, to students. so if confirmed i would want to be vigilant, understanding the cumulative impact of the rules. making sure we are eating the safety and soundness goals set out for us in that legislation. but i presume there will be adjustments. the need for adjustments as we go. and obviously we would expect to work closely with this committee as we monitor and tweak the framework. >> thank you very much. dr. powell, i'm going to ask you the same question that the chairman asked mr. fisher. the regulatory work that emerged out of dodd frank made it increasingly difficult for dodd frank and one-quarter of the small banks are contemplating mergers because they can't survive the regulatory environment. would you agree we need to address this by by flexible in the standards we apply to the

larger banks as opposed to the smaller banks? >> i would agree. let me say i believe the community banks and the personal experience with community banks providing a special service in communities that the large national banks are not set up to provide. it's not a better world, as community banks are going out of business. it's a better world with community banks in business. so in terms of regulation, what seems to happen is that most of what we tried to do since dodd-frank passed is aimed at the larger banks, but there's tendency for regulation to run to the smaller banks as well. so, you know, we try very hard to manage that. we have a special counsel at the fed that former governor duke was instrumental in setting up, called the community depository institutions or advisory

counsels. we also have a special sub committee of the board that looks at every regulation and its effect on community and regional banks. so we're focused on this. and it is -- it is separately the case that the community banking model is under pressure from national products, you know, product by product, mortgages and all those sorts of things that car loans become nationalized. we don't want to add any pressure to that at all. we want to not be part of what's putting pressure on community banks, if possible. >> thank you. >> thank you, mr. chairman. i want to discuss an issue of high importance to the people in my state. particularly as a result of the challenges they have faced by hurricane sandy. in a challenging set of circumstances, some of the people in our states have been

faced with greater challenges because of the way in which information has been distributed and decisions have been made on -- which have resulted in the minority community from a series of independent reviews, not receiving fair access to recovery programs. for example, the state's spanish language website contained incorrect application constructions and missing deadlines, and it was not corrected until after the deadline to apply and/or appeal. i've also seen reports showing disproportionately higher rejection rates for african-americans than latinos. and even if i work under the assumption there was no intentional discrimination, the impact would be a cause for a concern. my understanding is the that you are responsible for investigating these claims and ensuring fair and equitable

treatment for all the individuals. yesterday at a hearing i conducted on the subcommittee, secretary donovan mentioned hud is investigating a complaint that has been filed relating to these matters. i know you can't speak to that. but i want to know if you're confirmed will you make this a priority and keep our office updated about the results? >> senator, you have my word if confirmed as secretary for equal housing and opportunity, i will review these manners. i will work with you and members of your staff to follow up accordingly and provide you prompt information. >> okay. because it's simply people who lost their homes and are challenged to pay their taxes like everybody else, but maybe linguistically challenged could have the same opportunity as everybody else. and it is unfair when information that was provided on the main website as it relates

to the sandy recovery was missing on a spanish language website and was corrected after it was brought to the attention until much later and rates of rejection were higher. and when we had 80% of those individuals who appealed their decisions ended up being right. they won the appeals. latinos didn't know about the right to appeal. that's something that is fundamentally wrong. and so i hope you'll follow that. and i would like to ask this question to dr. fisher, secretary brainard and governor powell. a great deal has been written and said about so-called expansion nar austerity being tried by the countries in the europe. the idea was the countries experiencing a serious economic downturn after the financial crisis and who saw their budgets fall into deficit and their

borrowing costs rise as a result of the downturn could best move forward by implementing deep fiscal cuts and monetary tightening with the hope that this would somehow stimulate economic growth by encouraging investor confidence. from my perspective, the way it played out has been quite the opposite. fiscal cuts during an economic downturn caused by weak demand further weakened the country's economy and posed great human cost in the form of high unemployment and canceling out the budgetary savings because of the weaker economy. so i would like to ask you all, what lessons do you think you would know as the country's experiences and have recent experiences such as these or are conversely the enhanced stimulus efforts upside way in japan.

>> thank you for the question, senator. the lesson is a very clear lesson. the one that draws for a previous experience in europe and elsewhere. there was in the 1980s a theory that a contraction at refiscal policy could be expansionary. there were two countries where it seemed to happen. and what produced that in large part was a big devaluation in response to the fiscal action. that was present in the monetary union. so it wasn't real vent, but that was the theory and experience on which it was being built. i think the recent experience and also experience in the 1990s

suggests that immediate impact of fiscal austerity is to produce output. you may not be able to avoid that if your budget is a total mess and you can't raise money. and you may have to do that, but if you don't have to do it, then it's negative effect. >> could i hear from the other two? >> sure. >> sure. so sometimes nations need to engage in fiscal austerity. that's a judgment not for fed nominees but for the legislature. no one should expect it will result in short-term growth. it will not be expansion nary, dr. fischer pointed out. and also the importance of monetary policy to respond wrchlt the central bank is already at zero and there's no real responsibility to respond. there's no reason to think that fiscal austerity would bring growth in the sort of short and

medium term. zble senator rkts i think what we can see clearly from the case is it is a contradiction and does not work. i think we've been fortunate here in the u.s. to have appropriate support for command coming off of a very damaging financial crisis, during a period where the private sector was deleveraging. in my previous work at treasury, i worked very hard to work with my colleagues to persuade them that it was very important to avoid the terrible human costs of very high unemployment, to provide more support for demand, and of course, it was very important for us here to have a strong partner in europe. so going forward, i think going to hope that he provides support for recovery so we have a strong

both economic and strategic partner in europe. >> thank you. >> senator brown? >> thank you, mr. chairman. congratulationses to all of you on your nominations. i'm going to direct my investigations. i will have some questions. thank you for joining us, too. a recent study in the federal market transcripts from 2000 to 2007 found committee members collective background in macro economics seemed to cause them to miss connections between subprime lending and the exotic financial instruments with which the american public became all too familiar during 2007, '08 and '09. the transcripts of the recently released meetings show that the september meeting, which was detailed and outlined in great detail in the newspapers on the eve of the lehman bankruptcy, the fomc members mentioned

inflation 129 times and recession five times. i'm concerned that a lack of diverse use on the omc could affect the ability to observe all the americans. you are the two nominees, i presume, that will join the fed. what perspective do you bring that will actually matter and benefit the real economy and matter to the families in cleveland and mansfield, ohio? dr. fischer? >> i do have an economic background, so i have to accept that. i think it's useful. but in terms of background for the jobs, i've been in central banks for years. i worked for the governor of the bank of israel. i was governor during the global crisis. you could not be in that crisis without being aware of the impact of financial problems on

growth. and of the absolute need to maintain employment. israel was lucky or whatever, they didn't have a financial crisis, and so when we reduce interest rates, the banks could lend more. they did. and israel escaped the bulk of the main burden of the crisis. that's the background. but senator, in addition, i think anybody who has studied and particularly who study this crisis knows the cost of unemployment. understands that slow growth is not an abstraction. slow growth is people not finding jobs. slow growth is problems for families in meeting their -- even their food bill. and if one doesn't understand

that, one can't seriously be a policymaker. i think i understand that, senator. >> thank you. miss brainard? >> senator, i have worked all my professional career on making sure americans have economic opportunity. i have worked extensively at the white house. most recently at treasury u at guarding against financial kris bring. i work very hard in making sure americans manufacturing in ohio are able to compete in the global economy and are able to borrow to send her kids to college to borrow to buy homes, to protect their savings. this has been really my life's work, and the fed is a critically important place now.

probably one of the most important places in terms of making sure americans get back to work. the slack in the economy. is overcome. and credit flows to those who are going to create jobs and create opportunity in the future. >> thank you. mr. chairman, i have one other question. this is to all three fed nominees, including mr. powell. basil has proposed capital surcharges in the range of 1.5 to 2% in the range of standards when she was vice chair of federal reserve, now federal reserve chair yellen said she agreed with governor stein that these capital surcharges should be higher. she says half the higher will help and i quote the future of the the fed. in the too big to fail subsidies and forcing internalization of the social cost of a sifi failure. since then, the feds propose the

leverage ratio of 5%. no announcement has been made about these surcharges. my yes to three of you, do you agree with chair yellen that the too big to fail subsidy exists and as a member of the board of governors, would you agree with chair yellen and governors trujillo and stein that they should be higher? >> thank you, senator. so in terms of the subsidy, most of the studies, all of the studies show some kind of study. you can't really hold all else equal. for purposes of this answer let's assume -- and i do assume there is one. >> and that it's significantly high. 50 basis points or many. >> if you think about the exercise, the it's hard to have confidence in the numbers. you have to compare a huge bank to a small bank. it's a hard thing. i will assume it's real. and the question is, your real

question is are the surcharges high enough, and i would agree that they would leave more to be done. in effect, there are ways to get at that. for example, one of the things we're looking at is the short-term wholesale funding aspect of the large institutions, and one of the ways to get o at that is through some kind of a capital surcharge, based on exposure to short-term wholesale funding. so we're not done yet with the capital process. >> miss brainard? >> senator, i think it's very important that market participants understand that there can be no institution that is too big to fail. there are a lot of reforms under way that are important in addressing the perception and the previous reality of too big to fail, and we need to think about them all together. the risk-based capital

framework. it will simple leverage ratio. liquidity requirements, stress tests extremely important in that overall framework. the orderly liquidation authority and particular a single point of entry model, along with recovery and resolution planning. and there are still rules to come on the amount of senior debt as well as shortterm wholesale funding. # i think going forward, at least in my case, i would want to be very attentive to whether that's sufficient. and be open minded about taking additional measures, which could include higher capital charges on the institutions and we'll have to be very attentive to that. # we'll do many if too big to fail perception remains in the market.

>> i can't tell if you think that chair yellen is right or wrong in her statement. >> senator, i think what i would need to know is the overall impact of those changes together and there may well be a role for higher capital surcharges on the higher institutions. so there certainly may well be a role for that. but i don't know that at this juncture. i would need to study that much more carefully. it's a very detailed analysis that i don't have access to that information right now. >> dr. fischer? >> senator, i fundamentally agree with what my colleagues have said. my potential future clolleagues excuse me. i would emphasize the financing as another element that can help deal with too big to fail, and

this is work that's going to take a bit of time to figure out precisely whether enough has been done. you'll certainly get some guidance from what happens to estimates of the premium. that the larger banks benefit from. the markets really haven't had time to understand how the future system is going to work. so i think we have to keep following the premiums and see what the estimates look like ahead, taking into account the reservations that governor powell has just to express about that measure, but it's the best measure we have probably. >> senator reid? >> thank you very much, mr. chairman. thank you all for your willingness to serve, your current service, governor powell. look, let me ask you a question,

and this is from your perspective as not a member of the fed, but one of the most respected in policy. we're in a debate on whether we should apply bank like capital standards developed in dodd frank with the asujs of the holding companies to very large insurance companies which may be classified as systemically important and therefore fall within this characterization. just in terms of the nature of the insurance and the nature of the bank, are these isle stances appropriate or should there be a variation? >> senator, they're clearly not identical activities and there are differences with the portfolios and the insurance companies trying to match the liabilities. rather than fundamentally being based on mature transformation,

which banks are. and so that's ap different business. i think the capital requirements should take those into account. >> it's not whether or not the federal authority has the rules and regulations to do that. they're there without -- i believe, i'll ask the governor for a former opinion. they declined. but i think practically speaking i concur with your answer. if they can reach that point through their discretion, their rules and regulations or their application that would be the most timely, i'm sure, and perhaps the best solution. so i don't know if you have a comment on that. >> well, senator, i certainly heard a lot of senators i've spoken to express that view. i've also seen there was a proposal last week to change the legislation and not have to deal

with the feds' legal advisers who are very good at their job. >> jn they're very good at their jobs. but having been a lawyer once, i think sometimes if you know the answer ahead of time you can find a way to get there. governor, you're serving right now, and i don't want to put you in a position, but this issue of the regulatory discretion and the ability to do it is central to this whole issue. i assume you agree with dr. fischer about the different -- different balance sheets. how do we get to the point where is we recognize this in practice? >> senator, i absolutely agree that the insurance business, the traditional insurance business is very different from the banking businesses and the businesses that all the big banks are engaged in in so many ways. and so ideally capital

requirements will project that. it's been 30 years since i practiced law. but i can steal read. i read the collins amendment very carefully. i so far look in vain for flexibility, but, you know, i continue to try to look. and again, this really isn't my call. this is the call of the professional lawyers at the fed. >> well, again, i think this is a serious issue because it's not so clear cut, i think, in terms of the language. obviously there are opinions outside the fed that says there is flexibility, and just sort of recalling over the years, i at least got the impression that the fed wants to do something they can find very good lawyers on the staff to give them the ability to do that. secretary brainard, do you have a comment on the issue? >> senator, only to say that it is very clear that the insurance business model is very

different. the capital standard models for banks are not for the traditional insurance business. i think it's important for the foed to find a way forward so they can tailor their supervision. as to whether the statute prohibits that or not, i don't have a well informed view. if confirmed would want to work very hard to be able to tailor. >> thank you very much. just a final point that reflects on what senator brown said about the the damage that slow growth does to real people. there's another side of this. a current debate giving them unemployment benefits km have lapsed. so dr. fischer, from your standpoint as someone who has been in the crisis, can you comment upon the value of unemployment benefits, not only to individuals, but also my understanding is they provide economic stimulus, that they pro vid a payback greater than the

dollars they we put in. not only helping people, but they also stimulate demand in the economy. is that a fair estimate? >> senator, this is not my area of expertise, so i don't know the depths of the most serious part of the research. there are two effects. one is the aggregate effect. helping people who can't find a job to live somewhat decently. and then the incentive effect, which exists and you can see it when it's lengthened, when it's shortened people tend to go back to work. i think in a period where the jobs are much more unusual to t to find, they should be lengthened, as they have been. . >> so in this climate where there are collie applicants for every job,ty think if i can

assume what trumps it is the aggregating demand and the distance then of argument. is that fair? >> senator, i think that's a judgment which is not the federal reserve board's to make. >> okay. that's obviously what i've made. just looking for a little encouragement. does governor powell or the secretary want top comment? >> i can't improve on that. we all know we have friends and relatives who suffer from particularly long-term unemployment and the damages to people's lives is dramatic, and there are the two offsetting effects. but it's just not an issue that we as unelected people have a public opinion on. #. >> well -- >> senator, the nature of our

job market, i think, should be a huge concern of all of us. if you look even at the -- not just at the unemployment rate, but if you look at the participation rate. if you look at the percentage of people who are working part time involuntary, who would like full-time jobs. if you look at the percentage of the unemployed who are long-term unemployed, it's obvious that our job market is much weaker than it should be at this point in the recovery. that should very much color the analysis of what role uninsurance plays in the system and in supporting demand. >> thank you very much. >> senator? >> thank you. first i want to welcome my colleague mark mcwatters. he was always smart, thoughtful and principled and astrongly support his nomination to the credit union board. dr. fisher, after you were nominated, we met and discussed

too big to fail, the fact that the big banks are growing bigger every day, pane whether cutting their size would reduce overall risk in the system. now i'm concerned that the megabanks not only have the capacity to tilt the financial system but they also have the capacity to tilt the political system. we learned as big banks get bigger and bigger, their lobbying power and influence in washington also end to grow. that means big banks can delay, water down or kill important regulations. so size can have ripple effects everywhere. and for that reason i think it's a mistake to talk about size without considering how it affects the ability of government to enforce meaningful regulation.

a century ago when teddy roosevelt and other progressives worked up the giant trusts, this was a big concern. and the the political impact that came with size as well. so dr. fisher, you have a great deal of experience as an soe observer in the financial system. is this appoint you've thought about? and do you think it's possible for large wall street banks to e mass too much political power? >> senator, thank you. i went back from our meeting and thought about this issue and sort of rang some bells, and i did go and look at the speech i thought i had given at the jackson conference in 2009. i discovered the following, which doesn't answer your

question, but it's on the same point. it says even for the largest economies, there's a case for discouraging financial institutions from growing excessively. while it is clear that the economies of scale and commercial banks up to a certain point, it's less clear that the economies of scale continue at the very skal of the largest banks. it's less clear there are serious economies of scope in the financial sector. that is, there is little evidence that the financial supermarket view by which the end was justified leads to more efficient and cheaper provision of financial services. so i didn't str to go into the political side of the issue. i think it's possible that this is one which seems natural. when i went to israel a friend

gave me a copy of later justice's book "other people's money", and it was a powerful, very powerful attempt before he became a justice. >> we have much to continue to talk about. but dr. fischer, let me ask this question a different way. many big banks are well represented in washington. but the connection between city group and democratic administrations really sticks tout. three of the last four democratic treasury secretary have citi group ties. @ fourth was offered but turned down. former directors of the national economic council and the office of management and budget at the white house and our current u.s. trade representative also have citi group ties. you once served as president of citi group national.

now i know that citi group has very smart people and i know that private sector experience can be very important to government service. when i set up the now consumer agency, i h hireded many people from the private sector. but i also think it's dangerous if our government falls under the grip of a tight knit group connected to one institution. former colleagues get access through calls and meetings. economic policy can be dominated by group think. other qualified and innovative people can be crowded out of top government positions. so the question i want to ask you, government fischer, are you concerned about the revolving door between recent democratic administrations and citi group, either in terms of policies or in terms of public perception? or do you think there's nothing here to see? >> there is obviously something

to be worried about. i think we taught to look at the other side of this. in many case, my three years at citigroup were the most important element in my education that enabled to me to be an effective supervisor of banks, which is one of my duties as governor of the bank of israel. without that experience, i would have come to it largely with an academic background, without ever having seen the inside of a bank, or furthermore without having word to the private sector. i thought that experience was extremely valuable. when people who worked with me explained the theory, i could have explained. i have seen the guys at work who are breaking for exchange markets. it's not what you're talking

about. >> dr. fischer, because we're over time, i want to be sure we're drawing in on the same point. the point i was trying to make is not whether or not private industry experience is important. i would readily acknowledge that. as i said, i hired people when i was setting up the consumer financial bureau and one very important qualification. the question i was asking about is the tight connection between the same institution and the government and whether or not we need more diversity in that. >> i think diversity is always worthwhile. it's true i worked at the same institution as some of the people in government. we were not colleagues at the time. i was not there. . i left in 2005 after three years on the job.

i know i know the people. i respect them. there are people from other institutions whom i also know and respect very much. i don't see that as a particular problem. at least in my case. thank you very much. i appreciate your service. i think it's important we continue to talk about size and how it cannot only tilt the economic system, but also the political system. >> senator schumer? >> well, thank you, mr. chairman. and first, i want to say there are times that when we're asked to consider nominees that are leading thinkers in their field. are there times when a nominee has a wealth of experience? it's rare you get the two together, and i think you are just that person. you are one of the most brilliant people in how that will run. your experience shows it. and also somebody who has very broad experience.

diversity is good between people, but it's also good within someone. you spent three years in the private sector and decades in the public sector at the the imf, at the world bank and the head bank of israel. my view would be as three years in the private sector made you a better central banker because you understood how the private sector would act. all too often the private sector runs rings around them. so experience itself should -- three years at citibank should be an asset, rather than a liability, if you use that to understand how to regulate institutions that you're asked to regulate, and i think you will, knowing you. so i think -- i think you would be great at this. you've been a great voice on monetary policy. you've been one of the most respected economists of your generation. you served as a leader on the national and international stage. you've had broad experience in the public sector, private

sector, and academia, a great intellect and a strong moral compass, and not to mention, mr. chairman, he is a new yorker. maybe the greatest qualification of them all. so here is my question, first question, and this was the greatest challenge that our central bankers faced in the last decade, which was the collapse in 2008. i was there. and i think the steady hand of ben bernanke was amazing. and that will be the number one thing that goes down about chairman bernanke in history. that is what he was able to do and convince the political side to do, to save our country from a massive depression. i was one of the 10 or 12 legislators sitting at the table and i can tell you that. so i experience is this. my question is this. the in 2008 and twain, the israeli economy was able to mainly avoid the global financial crisis. this was in large part of a result of your decisions as governor of the central bank, to do things quickly.

like cutting interest rates. reducing the value of sheckel. as you look at the u.s. economy today, what advice would you offer to chair yellen as how the fed can better foster economic growth in the country. that's the number one problem. it's the lack of middle class income growth. it's the lack of good paying jobs. it's the basic stagnation of the economy, which may tarnish for the first time or have a better word, glow much less brightly the american dream. that lady in the harbor that i represent basically says if you work hard, nothing fancy. what advice can you give us, will you give chair yellen about how we're going to get better economic growth, and what monetary policy decisions can help make that happen? i understand we're the main

people who ought to do that hon the fiscal side, but we're a bit paralyzed. >> thank you. thank you very much indeed, senator. i am very proud to be a new yorker. but i have to work on my accent. i understand. >> you sound to me like you're from brooklyn. >> i think the fed with -- in terms of what it has under its control, which is fundamentally monetary policy and now supervisory policy to a greater extent is -- what it has going for it that many central banks don't have is a deal mandate. and the fed is charged with trying to achieve maximum unemployment as well as maintain price stability, which is defined as 2% inflation. i think the mixture we're seeing coming out of the fed now is

approximately preept. there will be questions about the speed of the tapering and so forth. but in terms of the instruments it controls, keeping an eye on the financial system and making sure that it does not get into a crisis of this sort again, and maintaining incentives to growth, which is what low interest rates do are appropriate at this time. it then becomes harder when interest rates eventually will start rising as they have to, and one will start talking about trade between inflation and unemployment. we're not there yet. we can focus on unemployment. that's what we, the united states, needs to do. >> and one final question with the indulgence of the chair. just to elaborate. because i asked you about this. you said to me that your experience at city bank for the

three years you were there in your long career helped you be a much better central banker. and you're one of the few. you can count on two hands the number of people who have your experience in the world dealing with crisis. just tell me and elaborate for the committee how it was an asset both in terms of the economy but also in terms of regulating banks. >> senator, i answered this a little bit in answering senator warren's question, questions. the basic issue is what are you seeing out there? do you understand when the markets are behaving one way or the other? and particularly what happened in the israeli case. i happened to be getting the "new york times" as well as the

israeli newspapers. they were more worried about lehman. the headlines were blacker and more difficult in the israeli press than in the united states. and panic descended. and we knew it. we knew what the banking system's shape was. no relationship to what actually happened. and the fact that you could have a confidence based on what you saw and go out and speak to people and avoid the sort of tricks that journalists play. governor, can you guarantee us there will never be a bank for you? that sort of thing. you have to give people confidence without exaggerating. >> one final question. you had mentioned to me that in one instance as head of israel

bank, go after one of the major financial families in israel for wrongdoing and one of them ended up spending time in jail. you may not want to talk about that. >> well, that incident happened. it was not pleasant. it happened in the middle of a global crisis, which made it very delicate. it involved the chairman u of one of the very big banks. and we reached the conclusion based on evidence that we had that he should not continue as chairman of the bank. is it was very difficult to get them out. but we did eventually. it was tough. we dealt with it appropriate lif. but he was later convicted of a variety of crimes. >> i just bring it up because i think it shows that you will go

after people who violate the law, do the wrong thing, et cetera. thank you, mr. chairman. >> what opportunities and challenges do you see for credit unions in the current environment? >> i think the greatest opportunity for credit unions is to continue what they're doing now. 96 million americans and credit unions are growing. their loan base is growing and the like. one opportunity is particularly for low-income credit unions. and to expand their mandate to those americans who are underbanked and unbanked. there's opportunity there. those folks need financial services. they need financial services at a reasonable rate. and i think there's opportunity there. challenges. i think the principle challenge is to look to the future and to

anticipate the next shock to the financial system. this applies to credit unions and also to banks. if you roll the clock back six years, seven years, the talk about overconcentration and mortgage backed securities and the too big to fails or the large corporate credit unions was nonexistent. if you look at the crypt transcripts of the fed tapes of 2008 there was very little if any discussion about this. it was there. it was hiding in plain sight. there was an overconcentration of mortgage backed securities that led to a huge financial crisis that we're still suffering through. that's the greatest challenge is to look into the future. but you have to be careful with that. if you're always crying wolf, you'll be considered a flake. so you need to exercise judgment carefully and judiciously. other challenges to credit

unions, i think is a regulation of small credit unions. perhaps the overregulation off small credit unions. ncua has made progress in this area. i think more work, though, needs to be done. if i'm confirmed in this position, this is an area i want to look into. i want to talk to credit unions and i want to reach an independent analysis myself as to whether or not small credit unions are overregulated or not. other issues which have come up, risk-based capital has been proposed for credit unions. risk-based capital philosophically makes sense to me. if you have risks on assets and books you should carry greater amounts of capital. but the devil is in the details. so if i'm confirmed at the position again, this is something i want to look into. thank you.

>> as the director of district columbia office of human rights, you work with housing and equal opportunity. how will your experience as a local partner of hud inform your activities as assistant secretary? >> thank you, mr. chairman. i believe if confirmed my experience has a strong local partner at the office of fheo will be extremely relevant and useful. working across the nation's capital on the ground with communities, with neighborhoods, with industry groups, with different fair housing groups, i believe especially at the local level a unique opportunity and a unique experience that we'll relay very well in this national role, if confirmed. because the human rights act, one of the most robust

nondiscrimination laws in the country is substantially equivalent to the fair housing act. we have worked together on a number of initiatives and programs. first and foremost, the investigation of complaints filed by district residents under federal law. but we've also done a number of other practice initiatives, including testing across the city in the rental market, the mortgage data. training the for industry groups at the local level and very importantly, educational campaigns and awareness campaigns to continue to raise the knowledge of district residents about what is -- what are the rights under the fair housing act and other civil rights and national. >> i thank you all for your testimony and for your willingness to serve a nation. i asked all members to submit questions for the record by

c.o.b., thursday, march 20th. and please submit your answers to the written questions as soon as possible so that we can move your nominations forward in a timely manner. this hearing is adjourned. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2014]

>> president obama announced sanctions on a number of government officials from russia and the ukraine today because of russia's military intervention in crimea. that is next on c-span. and in a few minutes, a look at the global energy supply.

and later, remarks from justice elena kagan at the georgetown law center. >> for st. patrick's day, we turn to the video library at c-span.org to see how u.s. presidents marked the holiday. >> despite all this, tip wanted me here. since it was march 17, it was only fitting that someone drop by who actually had known saint patrick. [laughter] [applause] and that's true, tip. i did know saint patrick. we both changed to the same political party at about the same time. you have a glass of guinness with the man in ireland as i have with brian monahan, your friends. -- your friends. you're friends.