wheat or soybeans, the market can fluctuate greatly. the best thing to do about that is to open up and expand markets to new possibilities and new countries. thatther thing of course we experience when i was a kid, we would have a great peach truck looming and then you get a hurricane, and what looked like it would be a good year became a terrible year. crop insurance because of the vagaries of nature. you have to >> what do you think of the state fair so far? i have been here five-six times. i will certainly go see the pork shed and do some grilling and make the rounds. streets reading a wall

and it interview, mention that if you could get some traction that you could win. is there a message that you have not been able to get out? >> this is serious business. it seems like politics is entertainment. helicopter,in a whether or not somebody will be indicted. leading the united states of america is a real job. what we need is someone who has the vision and experience. we don't need theater and politics. we need grown-up government. i have the ability to deliver that. byiticians try to win dividing people, demonizing the other side. i won by bringing other people together.

it's not a partisan, narrow government, but an american government where we solve problems together. do that president to was ronald reagan, because he had tip o'neill as his speaker. i will do that. >> thank you. >> thank you. >> i appreciate it, governor. >> thank you. i appreciate the opportunity. nice to meet you. it might be more interesting for you. you never know. politics is entertainment. >> thank you very much. >> thanks so much. we are back at the iowa state

fair tomorrow at 11:00 a.m. we will show you ben carson and george the tacky, starting at 9:00 p.m. >> tim valenti is our guest. -- tempe flinty >> he was the presidential hopeful and went on to serve as cochair on mitt romney's campaign. we will be talking about financial services, regulation, and politics. thanks for being with us. tim: glad to be here. susan: tracy is financial regulation reporter of the wall street journal. before we get to them, china this week announced big decisions, the devaluation of

its currency and that it would start selling dollars. i want you to put both hats on. what are the possibilities for global markets impacts. and what are the geopolitical applications of this? susan in terms of markets, it has been unsettling. we have seen them react in the wake of this announcement. it will have applications for other american businesses that try to access and maintain market share is china. beyond that, it underscores the concerns regarding currency mitigation that china has been guilty of for a number of years. this brings to the forefront the willingness to manipulate their currency that is advantageous to them. host: let's turn to you. >> a question about cyber security, something that congress is working on at the moment. i want to ask about the policy of the issue. there is a bill that is under

consideration that relates to cyber information sharing. the information that companies share with the government and some protections around and to facilitate it more. my understanding in talking to folks about this issue is that financial service companies share a good amount of information with the government. what would this bill do? why do need legislation? tim: there is a bill pending before congress passed by the house and under consideration by the senate. why it is needed is this. if i am a company being targeted by china, russia, north korea, iran, or a soviet bloc crime unit, it is not a fair fight for china to triangulate on and cyber fight one company. we need a team america approach. we need to work as a team if we

are going to identify and work against those threats. no one company, no matter how large they are, can do it by themselves. being able to communicate with governments and others is important. why that is helpful is that if you do it now, for example if i , think you have attacked me and i turn that information over to the government, would that be subject to the freedom of information act? if so, will the trailers get it and sue my company for negligence of data? will regulators yet it and throw me in jail or find me or sanction me? with the public's? will my creditors have access? will he give up a competitive advantage? we are saying there should be a law that if you give the government cyber information in good faith, that should be subject to legal safe harbors so those problems are addressed ahead of time. that is the main reason for the bill, to encourage come and not

discourage, teamwork when it comes to cyber defense. >> it is happening but it is not happening in a protected space? tim: it does not happen as robustly, quickly, or widely as it should or could. the opponents say they don't like it because they think the government will share my personal information. it is important to distinguish. we are not talking about sharing personal information. we are talking about sharing cyber threat information. i wish it wasn't called information sharing. cyber teamwork sharing would be a better word for it. >> maybe you can rewrite that if it does not pass. it does seem to have supported the moment and it is a question of when majority leaders and the senate bring it up. there are all kinds of curveballs that could come in. it does have the support to pass. what else does the industry need from the government beyond this bill to do the things you need to do to protect against hackers and work on this teamwork?

when you hear financial services ceos talk about this they talk , about how they don't know enough about what the government is doing. what is your next step once you get protection around the information you share with the government? tim: there is a number of things they could do to improve cyber defenses. number one, there should be a standard for cyber security defense across all industries. right now, a financial services industry has had such a standard since the 1990's. the pipeline is only as strong as its weakest section. we are connected with other people in the retail space or they don't have a standard. we think our standards since the 1990's should be extended across other sectors. that is number two, you think one. about the capacity the government has at the department of defense, nsa, cia, department

of homeland security, the department of treasury, and more. it is an enormous amount of expertise that if properly shared with the public and companies, our defenses could be more effective. lastly, government could help by funding research that will go into future cyber defenses. this stuff changes every month. >> i want to ask you also about the department of labor rule. the department of labor made this proposal. it is supposed to protect people who are getting advice on their investments. i know this is something your members care about a lot. please tell us why you think labor ought to modify the proposal. also, could you also comment on how likely it is that congress will get involved in this issue? we have seen democrats express concern over it, but do you

think it is likely in the appropriations bill or some other form that congress would limit what the department of labor is trying to do or preclude it from doing so? tim: newsmakers will know about this, the fiduciary rule, sounds like something from star trek. for certain retirement investing products, we should move to a best interest standard so that these advisers, brokers, investment firms have to put the best interests of their clients first. right now, the standards are suitable. if i am advising you, i can give you suitable advice. i am not obligated to give you the best advice. i agree and our industry agrees. we should move to a best interest standard. it should be done simply and not with miles of red tape. we are trying to get the department of labor to say, do a best interest standard, but do it simply practically. , we should not have different standards depending on what

investment arena you're in. if i am giving you advice for retirement and non-retirement, i should have the same standard, regardless of whether i am giving you one advice or another. we are saying take that same standard and apply across all platforms, not just the retirement platforms. in terms of congressional action, they don't appear poised to take action on this issue. some are writing letters and expressing their concern. on a bipartisan basis along the lines i have just suggested, but overboard, then congress will act. at the moment, there is watching. this is important because if the deal goes too far, we don't want people to be discouraged from giving advice or people giving advice to not provide that to modest income investors. >> i will ask you a question that would transition to the political side of things. what is your expectation for how

the financial industry will handle what is likely to be a lot of fire coming at it during this election cycle? particularly at the large financial firms? we have already seen candidates talk about this. how do you manage that? tim: i think it is expected, of course. wall street and financial services can sometimes be a punching bag politically. the best thing we can do is try to understand that will be part of the political rhetoric. we need to make sure we address these issues substantively. our members always say how we improve our reputation. you do that by earning the trust of customers, public, and regulators. improving the industry's behaviors and compliance is important. it is improving still not , perfect. it is a lot better than it was. think a lot of the post. frank regulations are

starting to settle in. it is inevitable that during the political season, wall street is going to become a punching bag. it is the way it is. >> if i can follow-up on that a little bit, i have presidential politics questions for you. the industry has its own political questions. i would like to ask you about scott garrett, the chairman of the subcommittee in charge of capital markets has come under fire for anti-gay comments he has made to republicans. goldman sachs and it will stop contributing to him. others in the industry have consider whether to ask for their money back. have you made any decisions whether you will contribute to chairman carrots or his group? tim: we have not made any decisions along those lines. i know the comments he made were concerning. in terms of any decision beyond that, we have not done that. >> is that being discussed at all? tim: each company will have to decide for themselves how they want to approach that.

goldman sachs and others have been publicly reported. that is not something we have gotten to a decision point yet, but something that we will certainly consider. >> scott garrett was one of number of people who voted against speaker boehner. i think speaker boehner is considered an ally of the industry. there has been a lot of talk about what to do about the very conservative tea party movement type republicans who are attacking boehner as an example of sort of the chaos that has come into the system. i know there has been talk over the last several cycles about trying to primary folks like mr. garrett. i think the industry participated a little bit in the primary. any wondering if there is

additional discussion about that. what do you think about participating in the public primaries going forward? tim: i think the chamber of commerce got involved in those dynamics heavily in the last cycle. our organization has a more modest political presence and footprint. we have not gotten actively involved in the primary process like you have described. i know other larger groups have. jumping back to your question about the reputation of the industry, if you think about the black eye the industry has received leading up to the crisis, there was a lot of dumb behavior. you have to remind people that almost every american needs a credit card, debit card, checking account, savings account, car insurance, home insurance, life insurance, a small business loan, student loan, and more. it is an incredibly important industry for the economic plumbing and financial well-being of the country, not

to mention 401(k)s, iras, disability insurance. it is an important industry that provides lots of important services and jobs for people across the country. we need to make sure their behavior and compliance is where everybody expects. that is what they're trying to get to. that is a you improve the reputation of the industry. >> a shift to presidential politics. you are from minnesota. i am from ohio. republicans are in iowa this week. game out of the race in iowa for me. i know you are a participant in the iowa strawpoll last time around. action, if we could talk about that. lots of candidates said they would not participate, forcing republicans to cancel that poll. what were your thoughts about that decision to pull the plug on that poll this time around? tim: i think that is good riddance. the iowa straw poll was not well

run in terms of the methodology. history showed it was not a good predictor of anything. not the iowa caucuses, not the ultimate nominee, not of the next president. it did not have any particular value other than to provide a distorted assessment early in the process. so i was glad that they got rid of it. frankly, a week later, nobody cared about the results. there are so many straw polls and flash polls that anyone does not mean that much. >> trump's number one, carson is number two. how do you think that is going to shake out there? tim: there is a long way to go between now and the iowa caucuses in early 2016. iowans are notorious for deciding late. it is a more conservative state in terms of caucuses and and many other places. not that many people show up.

there are 5 million people in iowa and only a few hundred , thousand participate in the caucuses. it is a subgroup that tends to be conservative. iowa favors more conservative and to some extent populist candidates. right now donald trump is in the lead at 20%. that means that 80% of the vote that is out there is not for trump. if someone can concede in consolidating that 80%, that is a winning formula. that may not happen in iowa. 25% could be a winner. >> is it time to start talking about donald trump as the winner in these early primary states? tim: if you asked me a month ago , i would have said no. seeing the surprising resilience of his appeal and his rawness and the ability to say anything that does not affect his polling numbers, he may have more staying power than most people

first realized. i'm not thinking he will get the nomination, but i think he will be around longer at a more competitive level in this race than most people believed. i am from a state where jesse ventura got elected governor. in a world where the kardashians seem to be so popular for mysterious reasons. you never know especially in politics. host: while we are talking about presidential politics, you suggested that your members are well aware there will be integrated topic on the campaign trail. one person doing that robustly is bernie sanders. he has been attracting huge crowds. the big applause line of his is reinstitution of glass-steagall. why the not a good idea? tim: if you look of the companies that triggered the crisis in 2008, the lehman brothers, countrywide. these weren't big, integrated large banking institutions that had both robust investment

practices firms and banking. if you read around the table that we are going to reinstate glass-steagall, that would not have changed the footprint of the lehman brothers, of bear stern, or countrywide. it would not have changed the footprint of the unit at aig that went belly up and causing problems. there is a revisionism around avoiding the crisis and all of the awful aftermath if we had glass-steagall in place. that is not the cut line where the crisis started. >> how do you think republicans will handle this issue in the presidential race? we saw this issue be debated on the republican side four years ago. so far, republicans have not put out much of a policy plan. rick perry has a detailed plan when it comes to the industry. he talks about regulation of big

banks, deregulation of small banks. do you have any idea where this field will go in the field of republicans in the next couple months? tim: i think we should all agree there should be no big to fail, and no too big to jail, no more bailouts. dodd-frank said that on paper. a lot of people on both sides said i see that on paper, but i don't believe it. i don't believe that is actually what will happen. there is too much discussion so they want to move to something tighter on too big to fail. is there a way to put winding down institutions into a modified bankruptcy approach. i think the substance of of that will drift towards that. the substance will be no more bailouts, no more too big to fail.

that is an of course. of course we don't want more bailouts. >> would it help to address cultural problems? commercial to divide banking from investment banking. would it help address the -- you know, you talked about the crisis. we have also seen interest rate rigging, the foreign exchange scandal -- all of these things rathert is profit driven than what you would expect from a bank that is driven by serving mom and pop. tim: there is this tension and i think you put your finger right on it, wanting these institutions to be like utilities in terms of their ness, safety and

, soundness. those are good goals. on the other end of the continuum you want them to be , dynamic deployers of capital so that capital gets put into the economy in any form of lending. you get complete safety if you have all banks hold everything in cash. that is not a bank. that is a pile of cash. as you move away from that and say lending some of that back into the economy is a good thing, you have to know where to draw the cut line so you don't make it too risky. you can derisk banks and stifle the introduction of capital into the economy. you're to balance this. in terms of your question, one thing to think about is the rest of the world. if we say to our big banks we will divide you up practically and you will compete against chinese banks and european banks that will stay with the hybrid model and be much bigger, we just put the american companies at a huge global disadvantage. a lot of the business of those

larger banks is global. that is one thing to consider. the other thing to consider is it is like jell-o. those risky activities need to be regulated and monitored but it to hard inate the regulated space, they get pushed out into the unregulated space. i will suggest to you the big danger brewing right now is not so much in the regular did space. it is in the so-called shadow banking or shadow finance space that is unregulated. that is where you are seeing leverage, risk, opaqueness. i think there are signs of trouble brewing there. host: i wanted to ask you -- talking about new regulations. the fcc reporting requirements on ceo salary? there are a lot of complaints of publicly traded companies about how much extra it will cost. whether are not the calculations are really going to help individual investors. what is your organizations view of this and why is it a good

thing for the people to know the difference or to the average worker -- tim: it is fine. you want it to be done quickly and fairly. if you have an organization with all american employees, your pay grade may look different than if you have a bunch of employees in india or south america. the question becomes how do you factor that in in a way that reflects the market pricing in different parts of the world? that is one example of doing it in a way that makes reasonable adjustments so the comparisons are fair. companies are worried about the mechanics of it, to do it fairly and easily. as a measurement, it is fine. host: do you think it will only have an impact in the investments people make? tim: i think it is good in terms of transparency, people being able to hold people accountable, putting in some context. butn't think it will be --

it is one thing they will look at as a point of interest. host: for a long time, we have been hearing that european credit cardholders have the advantage because they had chips in their cars. what is the rollout rate for chips in the united states and why has it taken longer so long? tim: putting chips in cards is easy. you could do that tomorrow, do that yesterday. the real challenge is to have the point of sales terminals they can actually use them. the bigger retailers do, walmart, target, places like that, easier for them to make the capital investment. the resistance is coming from small retailers who are reluctant to make a technology investment for the chip cards when they may have just a small mom-and-pop operation. on the other side of that coin, companies like square say they can do it for $200. what is the holdup?

there is a lot of anger pointing back and forth. and embedding cards with chips is being done as we speak. host: i would like to talk to you about bitcoin regulation. what is your view of the challenges? this gets back to the question of how much of that activity will move from regular space toted unregulated space. in part because of technology or in part because people are saying the regular did space is too burdensome? bitcoin is interesting, provocative, it has gotten a bad rap because of the early stigma around it is are there bad behaviors it is hiding because of its ok to this, criminal activities, the silk road server got busted. i think it is a novelty at this point.

there are a few interesting things underneath. one is called block chain technology which supports bitcoin which has other applications and could really be disruptive or interesting, down the road. lastly as to bitcoin, are you , going to put money into something worthy value fluctuates 20% or 30% a day? you may put $200 into it for fun, but i don't think you're putting $3 million into it. >> on bitcoins, i'm fascinated by this topic. do you see implications for cyber security there? i know that is a lot of what the roundtable does. would a payment using block chain technology would be more secure than a payment that doesn't? tim: block chain technology is foundational and you can build , on it including security , features. it depends on how you build it out.

there is a norm is interest around the potential around block chain technology. future payments will get interesting over the next 10 years. i will suggest to you that people exploring block chain technology will be at the root of new payment innovations or applications that will be intriguing. >> are we at a point where members will start to invest in them? tim: most of our members are looking at all kinds of new payment options, biometrics, gesture authentication, improvement to the card, non-card-based platforms, mobile payments, real-time payments. it is going to be a really interesting space over the next 5-10 years. host: we are just about out of time. you have the final question. >> one more question on the presidential race. you talk about the resident to -- about the presidential race, we have to talk about donald trump. you talked about handling trump

as compared to wrestling with a hurricane. after this debate, are you impressed with how anyone is handling him so far? tim: i don't think he is being handled. i think the only one handling him is him. he is a force of political nature in the sense that he is like a tornado. it seems that the normal expectations and rules don't apply to him. he can say anything and it does not seem to significantly damage his polling numbers. i think anybody who tries to change or alter the will not succeed. we will see, like a tornado, if it burns itself out or runs its course. it may be more subtle than that or more nuanced than that. it may not just be that he is a tornado and comes and goes. it may be that there is a fundamental message and shift in the political culture of the country where they are saying i know it is a little off, i know it is offensive, but i am so sick of the way the politicians , the way they talk and look. they all sound alike and don't say anything. even with all is