money what you don't go around with helicopter money that was actually the feds i believe made no comments on cyber it's. and surprise surprise according to american banker at the pay a bank its c.e.o. has rolls eleven percent in two thousand and twelve but it's not just top bankers who are cashing in bank stock trader and male dance iger and his he's been known to have a quid pro quo lation ships with brokers accepting off but compensations in the form of lavish drug parties that dylan's gloves his dirty deals believe it or not have gotten filthy u.s. attorneys r.'s expecting that dan zeiger and his broker buddies try to rig up the libel or we'll talk more about the fine line between bankers and gangsters in today's daily jewel let's get to what's in your interest.

we're hearing a lot in the news about too big to fail too big to jail and even too big to exist ontological issues aside suffice to say many people are frustrated with the institutions that received taxpayer bailouts and in the same year paid out excessive executive bonuses it's been a hard pill for some families to swallow to have their homes wrongfully foreclosed on by one of these too big to fail financial institutions received pennies on the dollar settlements that the financial regulators were supposed to be overseeing as we saw independent foreclosure review and a startling testimony united states. attorney general eric holder stated that some

financial institutions might be too big to jail and that the justice department has had difficulty in prosecuting some institutions because it would pose a threat to the economy for more on too big to fail we turn to prime interest producer just. this july will mark three years since dodd frank was signed into law a bill designed to end the massive bailout of banks. and too big to fail we're going to end too big to fail this is intended to put an end to the idea that some firms are too big to fail how did we get here today's mega banks grew out of repeated series of mergers and acquisitions over the past two decades exacerbated by the crash of two thousand and eight frank was signed into law in two thousand and ten so where are we now nearly three years later the six largest u.s. financial institutions more than two thirds of all credit cards and over half of

all mortgages today they have assets equal to almost two thirds of u.s. g.d.p. that's double the size from a decade ago and now that's created a problem that's almost too big to fail senator elizabeth warren recently confronted federal reserve chairman ben bernanke we understood this problem for nearly five years so when are we going to get rid of too big to fail. well some of the as we've been discussing you know some of these rules take time to develop three approaches being developed are breaking up the banks increasing capital requirements and defining a liquidation process but in each approach there's a devil in the details devil number one defining the threshold for too big i could say very difficult for congress or even regulators to say you know your awful size is one point five trillion or you should be more than x. percent of g.d.p. or it's arbitrary it's probably going to be a game of bull but according to brad sherman a senior member of the financial services committee all legislation faces the same

challenge every law has to be administered and if the speed limit on the freeway is sixty five and there are cars going seventy that's not a rejection of the idea of having the speed limit devil number two defining minimum capital requirements to protect against over leveraging and counter party risk senator sherrod brown and david vitter have introduced legislation to increase bank capital requirements but even these measures may fall short of what's needed to avoid a bailout fifteen percent for these big banks is enough to fifteen percent capital protects them and protects the public however representative brad sherman thinks that even this amount may not be sufficient finally in the event of a failure an orderly liquidation process is designed to go into effect overseen by the f.b.i. see in such an event shareholders would take losses yet defining the trigger for this process is devil number three so when looking at determining whether a bank is solvent is there

a quantifiable and consistent way to do that even. unbiased typical yes it is simple leverage ratio is the primary measure of capital strength but these approaches that address too big to fail may be ignoring another problem of too interconnected to fail harvard law professor how scott sees contagion as the major issue here i think our french made it worse because it's. can away the power of the system to deal with contention and put in place what i call a wing and a pearl which is capital liquidity and which aleutian which could stop. the approaches of breaking up the banks increasing capital requirements and planning for liquidation have the ability to also address contagion but that will require even more details with more devils in washington just. great work things just too big to fail is an issue that is gaining momentum on capitol hill dodd frank continues to be implemented as we approach this three year anniversary and seeing signs that this bill has holes and gaps and to say that the rulemaking

process has been telling would be an understatement not only do we not have consensus on what caused the financial crisis much less how to prevent the next but there isn't even clarity as to what exactly constitutes too big to fail under section one twenty one of dodd frank regulators can impose restrictions on larger companies at the board considers them to pose a grave threat to the economy but as we saw and house financial services hearing this that best target representative sean duffy questions. the general counsel of the fed as to what the much of it is for a grave threat and you might be surprised at his response. on the metrics you're moving metrics we do not have a measure and so you know when you see you're not right and it may depend on many. of you when you see it you will know what a grave threat is you can't tell me today what degree of growth is because there's no market for your run you. thought we were. all right so bring some clarity and

too big to fail to dodd frank i spoke with two experts mark levine the former counsel to representative barney frank and he's now the current host of the inside scoop as well as mark calabria who's the director of financial regulation studies at the cato institute. on the part. because i think that some of the assumptions are do you think too big to fail is an economic issue or you think it's a political issue and quite frankly i don't think getting one company is so big and of course it's also important to mind the option is not really failed we've all probably flown on an airline there are ways to take these things in bankruptcy continue to keep them going turn debt holders in the creditor to debt holders in the equity holders and keep these institutions going rather than you know the false choice of bail out or liquidate so my point is that i think too big to fail is fundamentally the perception by the marketplace on whether you will be assisted by the government so it's a question of whether government officials will step in and protect primarily

creditors if that is the case and those institutions are able to borrow at a lower rate they're able to grow and push their competitors out of the marketplace because in the financial services world cost of everything that's how you dominate the market so even a difference of twenty basis points can really change the competitive landscape within the marketplace so again you know there is no arm clyde way of proving whether too big to fail is there you know i think looking at the marketplace it suggests to me that market participants do believe these institutions are too big to fail so what would happen in two thousand and eight because that's obviously what big comes from the lehman brothers collapses and suddenly banks won't lend to each other they all have these toxic things called credit derivative swaps and no one seems to know how to value them we know the ratings agencies say they're aaa we also know they're involved with a lot of slicing and dicing of subprime mortgages that are one says are worthless so no one knows which banks they can trust they're afraid to lend to a bank to another bank because they don't know if they get their money back and a whole credit market seizes up another question that we need to answer it's too

big to fail really over and at the same financial services hearing richard also man the f.d.i.c acting general counsel he had to say this. to resolve. to one that it provided through movie will so we can try to address these institutions so they can be resolved in bankruptcy if they cannot be we have . total two so there is a law that says to big to fail is over that the i.c. has said it's over as the implicit guarantee really over there was a law on the books for twenty years that so the taxpayer did not stand behind freddie and fannie that didn't quite work out that way either so let's start with two issues one is this sort of dance around taxpayer money or not and so yes title two sets a path where the rest of the industry can bail out institutions creditors now yes that's slightly better than having the taxpayer but i'm fundamentally offended by thinking that prudently run institutions should have to pay for the mistakes of imprudent institutions and of course if you look at the marketplace again we have

there's no ironclad way to say fail is there or not but if you look at the funding cost it's pretty clear to me that the largest institutions have some level funding advantage over other institutions which is how you would really determine to be feels they are not i do want to mention something as well that if you look at funding costs preaching thousand eight those institutions did not have that advantage too big to fail came out of the bailouts and i think the problem with lehman was not that we let lehman fail was that we it look like anything goes in the lesson from lehman is that if you don't have the treasury secretary on your rolodex you're in trouble it's not that one institution should get in trouble because it's keep him on barclays bought all of lehman's north american operations in a week or more bought the rest of their world operations within two weeks or in a couple of small things in there but it was really an ad hoc you still don't know the rules of the game who's going to be out who doesn't know of course creditors are going to shrink away from that but i actually think if you look in the if you go back you know two thousand and eight you know many of the marketplace did not shut down i disagree with the argument that everything shut down it shut down the anybody who looked like they were in trouble those that were well capitalized for

instance insured deposits increased. people were not putting money under their pillow talk about that because of the increase because of the photo pozen shirts corp they increased because this is the tradition that we've had since the one nine hundred thirty s. which does exactly what you seem to complain about and it has institution that is not what mitigate it in two thousand and eight i mean it's a down payment on target. right because those those cities were not covered by the f.b.i. see that's exactly what dodd frank attempt to do and that's what you complain about what most americans they see as a pretty well we have not had a run on the governor the f.d.i.c has entirely been paid for by banks and it actually works pretty well because a bank on a friday night they open up monday morning and if you have a deposit in what would a fifty thousand dollars you don't lose anything that made that paradigm i think is something that we need for brokerage firm usually i would say i think the fundamental difference here is i think feel your stood because i think you're weeds out the rotten corrupt and the incompetent and i think the attitude that or the standard in our banking system should be that nobody fails is the wrong out to

that's i don't know you see that doesn't do the i.c.r.c. killed by people around you when you do fail the big studio city doesn't address this and make arrests and cities and that's as large as too big to fail fail if it's going to you don't cycle that fail we can reorganize it like you would do one area the orderly liquidation process as you. have it with the creation process that's exactly what happened with the bank that's went on for a good design to examine what you know i don't get to be ever used because we had an orderly liquidation system for fannie and freddie we didn't use it i spent tens of hours working on writing on capitol hill congressman frank worked with us on it we had a system in place in the summer of two thousand and eight that would have resolved about a dime of loss of the taxpayer did we choose to use it no you're not. we'll hear more from mark and mark or i say mark mark on the bill after the break also coming up next the arts. and i will get to the daily bill will explore the fine line between bank areas. stay with us.

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download the official location to your cell phone language stream quality and enjoy your favorites. if you're away from your television. set. now with your mobile device you can watch on t.v. anytime anywhere. senator sherrod brown and david vitter recently introduced a bill that would impose higher capital quire man's on the largest of bangs i asked

mark levine if he believes this bill would mitigate systemic risk. absolutely absolutely frankly this is what does break attempted to do it was going in that direction and then a certain set of scott brown of massachusetts in that brief interim between kennedy and elizabeth warren insisted on exempting all kinds of insurance companies and trust of small banks and basically he drew a hundred loopholes into the vault and regularities nine thousand pages long he still needed this is actually one thing i like about brown vitter is it's simple it's as a person if you're a small bank fifteen percent if you're a large big capital requirement that's a very clear and precise rule it's the kind of thing that i wish frankly dodd frank had been allowed to keep before scott brown ruined it i was assured brown by the way. and i would disagree on whether i think scott brown is to blame i think i think for it start i was a lot of problems and i think it's a real testament to brown vigor that pronger actually repeals one of the most offensive provisions of dodd frank which is to extend the safety net to clearing houses brown voter rightly in my opinion strikes language you need to go now i'm

going to be too little capital banks's to complex you know the throws the basel process out the window which needs to be the u.s. should go its own way that is a disaster process so higher and simpler capital i mean it was ridiculous to thing that basel as a given do you think this well i mean less demand for sovereign debt absolutely but you know the fact is you know. all you need to know about basel two is a capital system that tells you that greek debt is zero risk is the capital system bound to fail right you know it and we had to walk away from that of course and told you that fannie mae was very little risk too so again to be a joke and it's a good thing the bronner walks away from that and it's a good thing that they're actually counting real capital like equity before the crisis we were allowed banks were allowed to deferred tax losses that were no way capital using risk weighted assets and that you know this is where i think there's a mixed bag because you know they set a floor and then they allow some risk weighting i think the risk rates are always inherently political it's not by accident that. way that that large regulatory

burden i actually would say to me the tradeoff should be more capital but simpler capital because if you look during the crisis and what market participants care about they did not care about which are to your one you know risk way to capital what they care about how much common equity do you have that's what the market cares about that's participants care about that's what the that's what the public cares about so that's what we should be measuring not these arbitrary things that the regulators and the banks come up with themselves because this is not the basel process is not transparent it's not even like you know a treaty with the senate ratifies it it's these bank regulators you know like in switzerland sit around with the big banks and they decide what's going to what's going to work i think it's a flawed process and i think it is that basel two to me was one of the top five contributors the financial crisis and the note of agreement because i agree that basel is flawed i like very clear standards i like in the law i like it baking eight percent fifteen percent that's about as clear as you can get and listen to a liberal like should brown a conservative like that are together on a bill that tells you this is a bill that has wide support it should. only have people across the aisle it is

a wake up call to the regulator. mark levine and mark calabria thank you very much for joining me thanks for. and it's time for the daily doula joining me is bob english our t.v. producer cooper and great to be here for the dual thanks. so banker or gangster if you are not disgusted and nuff about all the issues that are surrounding too big to fail i know it's frustrating but i have the cake topper for you and as i mentioned earlier the american banker reported that the c.e.o. median pay among bankers increased eleven percent in two thousand and twelve some

of these bankers walk a fine line between crooked and legitimate and that the same time we have our favorite hip hop artists who get a bad rap for making their fortunes catering to these underground economies so what we're going to do we're going to play a little game we're going to juxtapose our favorite financer is in hip hop artist and then we're going to let the control room decide if we've got ourselves a banker or a gangster all right you ready i'm ready thank you all right let's go first we have dr dre while we're still waiting for this rapper his next album detox we haven't forgotten about dres a drunk driving charge in one thousand nine hundred four or the time he broke a guy's jaw outside his girlfriend's aus and went to jail for ninety days the doctor has come a long ways and of a new way and is clearly a savvy entrepreneur that understands his audience he's not the c.e.o. . he reacted one hundred ten million pretax dollars last year he was on the forbes

cash kings list number one by selling beats by dre have phones we have ourselves a banker he said you said dr drew has been to jail because this is a make things that. is going to make things very easy bankers by definition do not go to jail so we're going to have to kind of set aside here for the sake of this suspend. i think dr dre is a pure business man he showed his gangster credentials a long time ago and i'm going to have to go with banker i'm going to say gangster. he was a member of n.w.a. i think i think about i would make him a gangster what do you say control around there gangsta. all right so you get that was moving along we'd be remiss if we didn't include the leader of america's most famous bank that's right the figurehead and jamie dimon of j.p. morgan chase is in our crosshairs now he was certainly never

a hero of the public but he skated through the financial crisis relatively unscathed in fact he picked up bear stearns and washington mutual on the cheap but the fickle press and politicians would turn against him as mortgage servicing problems and a large london trader who and his fortress balance sheet so your thoughts and jamie he is definitely gangster ok. and the reason why well he came he came to capitol hill he warns presidential he's obviously you know bending their revolving door you know made his rounds on the hill i think. the way he just has washington that it's. ok i'm going to have to agree with you here because he made his way through the old chicago route i think through chase bank and everything he does is a little bit shady but he's like i said he's been able to come across as reputable until recently and he's had a host of problems and i think people are finally catching on to his gangster side

so i'm going to guess. ok. all right next we have diddy combs he is the c.e.o. and founder of bad boy the worldwide entertainment group and c.n.n. and time magazine named him one of the most employed when showbiz. and the world he made about forty five million dollars last year he also has adventure with vodka as made him a net worth of five hundred eighty million dollars but he wouldn't be on our list without a few arrests in one thousand nine hundred ninety five he was chillin with his girlfriend j. lo they forgot about that he was arrested for weapons violations and then again and two thousand and one he was arrested for driving on a suspended license he was driving a scooter ensoul i don't know how if you've ever been to south beach but scooter violations are taking very seriously there seriously this guy has been

a businessman from day one and yes he's had gangster rappers working for him but i think at the end of the day he's one of the most fabulously wealthy persons that i'm going to say he's a banker i'm going to say gangster he has weapons violations he drove a scooter on south beach. i say i say ok. got this one moving on lloyd blankfein head of goldman sachs the so-called vampire squid say what you want to about him but he has the midas touch when it comes to keeping his firm afloat he got the fed to convert what was an investment banking broker into a bank holding company in two thousand and eight and voila instant access to liquidity for goldman around the same time he got warren buffett to pony up five billion dollars right before his old goldman buddy hank paulson convince congress to ram through the seven hundred billion dollar tarp boondoggle. for your thoughts

. banker you've got a lot of money ok i would say anybody at too big to fail level is going to be doing bankers work except he said he was doing god's work and i just think there's too much of a juxtaposition there i'm going to say he is a gangster all right. but he thinking. there are pretty much of a nerd that. next up we have snoop dog or snoop lion i don't even know what he is anymore he's been in jail several times for drug dealing and ninety three he was charged with access to a murder or accessory to a murder excuse me six he was banned from the u.k. are giving him this huge fight at the airport he's now renamed itself the stupid you've sold over thirty million albums a room where you are going to say gangster for looks like you are going to see that

he's a gangster. exit or. and that's bankers and gangsters things about you. it's been a day of contrast here at prime interest mario draghi over at the e.c.b. said you not like give us counterpart when it comes to dropping money from helicopters more bank capital equals new ice age that was the absurd picture that t.v. painted after reading a more absurd as in view war and then the two marx made their mark debating dodd

framed in an interview that we went to market at par and too big to fail or to nail hopefully we nailed that one and finally we put the head vampire squid again the newly christened the lion and judge them on their street wall street and otherwise thanks for watching and make sure you come back tomorrow and be sure to follow us on facebook. at facebook dot com prime interest from everyone here a prime interest i'm parian boring have a great night. sleep . good lumbered surely we was able to build a new most sophisticated robot which fortunately doesn't give a darn about anything tim's mission to teach music creation and why it should care

about humans in the world this is why you should care only. live.

clean. more news today boylan says once again flared up. these are the images cold world has been seeing from the streets of canada. trying to corporations rule the day. i let.

the good speak. be. misleading good. luck. and. let. britain's euro skeptic make sure. securing

a twenty percent of the vote send the message toward governing to party. us if you turn america. to rebels in syria amid reports of alleged government led massacre we get an opinion on this later this hour in o.t. . seven the. latest deaths in iraq which is suffering one of the waves of violence withdrawal of u.s. troops two years ago top stories this hour.