it's my pleasure to introduce michael barr. professor barr is a professor at the university of michigan law school, but not perhaps a typical michigan law professor. he managed to be on leave at the key moment from 2009 to 2010 as assistant secretary for financial institutions at the u.s. treasury. for impact, i think, your timing was perfect, michael. you couldn't have chosen a time to have more, a more extraordinary role in terms of leadership within the reform process. but it comes from an extraordinary earlier career of impact along the way starting out as a, clerking for justice souter on the supreme court. so a distinguished career. so to give us insight into the kitchen when dfa was being cooked and an assessment of how we're doing now, i'm delighted to introduce professor barr. >> thank you very much, charles, for having me here and all of you for coming this morning. i'm going to give some formal remarks to open us up, and then the panel has promised me to savagely dispute everything i say which should provide a lot of

after his remarks you will hear from michael barr a former assistant treasury secretary financial our kids who worked on the creation of the dodd-frank act. this is about two hours. [inaudible] neil barofsky is a professor new york university school of law. first special inspector general which i think is pretty unusual. i think any other person has an acronym for the public could think of. he's a university of lund alike graduate from law school in 1995. i can't believe that. is that right? and the criminal convictions which is about 98% of the criminal conviction for those that have been fall when all of the crisis and as far as we know anyone i don't know of the rise is bernie madoff in good company. i left my question -- >> i did ask you what your brief was at t.a.r.p.. were you responsible for overseeing where the dollars flow or the policy or both? >> we have a very broad mandate. so when the congress enacted the emergency economic stabilization act, which gave treasury the authority to spend $700 billion of taxpayer money or are 700 billion in taxpayers' money to bail out the f

i commend michael barr for his very thorough and sing analysis of the crisis and very rich description of all of its moving parts. in particular the description of the role of the shadow banking sector and engaging in a regulatory arbitrage and accumulating the risk that led to the defense of 2007 to 2009. like many commentators, but he felt the dismantling of the architecture of the 1930's were precipitating a financial crisis. now we can only hope the regulatory architecture developed in the framework of dodd-frank will give us six decades or more of financial stability and economic growth. the reforms of the 1930's. and we can hope that this is the end of too big to fail. certainly the intent is there and the ingredients are on the table, but i think that there's a lot of wishful thinking involved in achieving this legislation that's likely to repeat the success of the earlier reforms. in the 1930's the u.s. needed the choice to move away from universal banking towards a tightly regulated system. the reforms are successful because they address the market failure of the financial sys

going back to derivatives, i think as michael barr and some others suggested, there's a lot of good inthe derivatives regulation of the dodd-frank act, much more than what one might have expected. primary concern here is of course they're putting all our eggs in one basket into this clearinghouses. and now the risk management standards of this clearinghouses will be very important. so advise clearinghouse either risked repository, because clearinghouses only going to fail when one or more of its dealer members fail. it's large enough that its current capital gets exhausted, initial capital contributions. and it wants to go and make capital costs to other dealer banks or broker-dealers, but we are in a difficult situation. so inherently, clearinghouse most likely would fail on the wing it is a full-blown systemic crisis. what will we do at that point most likely treated as a utility, that way we can use the 13-3 exception of dodd-frank to provide emergency liquidity assistance, but also suggest that to ensure that therefore they don't gain this federal reserve board dramatically the ris