first question, how is the volcker rule being enforced?nd what is the relevant role of each of your agencies in overseeing compliance? >> i think the rule itself actually became effective, i think april 1st of this year. but the compliance period is still out into 2015 and beyond. somewhat scaled in compliance, both in terms of extent and also in terms of timing. one of the things -- and again, i think i alluded to this a few minutes allege. critical, the agency did enact a joist rule. it is a better rule, a stronger rule. plainly, i think for the marketplace it was necessary to do that. and one of the commitments, and i actually said this in my opening statement, when the s.e.c. adopted the rule, is that we need to be focused from this day forward on continuing that coordination as we get into the compliance and enforcement period. so there is an interagency working group that all five agencies have very active senior members on, who are focused on questions of interpretation, questions of compliance, questions of enforcement. and we will

first question, how is the volcker rule being enforced? and what is the relevant role of each of your agencies in overseeing compliance? >> i think the rule itself actually became effective, i think april 1st of this year. but the compliance period is still out into 2015 and beyond. somewhat scaled in compliance, both in terms of extent and also in terms of timing. one of the things -- and again, i think i alluded to this a few minutes allege. critical, the agency did enact a joist rule. it is a better rule, a stronger rule. plainly, i think for the marketplace it was necessary to do that. and one of the commitments, and i actually said this in my opening statement, when the s.e.c. adopted the rule, is that we need to be focused from this day forward on continuing that coordination as we get into the compliance and enforcement period. so there is an interagency working group that all five agencies have very active senior members on, who are focused on questions of interpretation, questions of compliance, questions of enforcement. and we wi

the volcker rule which i discussed at some length, it is another example of how informed those who write the laws and regulations are about the intricacies of the way in which other aspects in areas of our society operate. so two weeks after it was issued , it is not widely covered by the press but the banking authority, regulatory authority or applied sure felt obliged to cut back on the volcker rule insofar as local banks. why? because it affected local eggs in the way that the rule makers have not anticipated in the effects were dire indeed, just one example. and another feature of our policymaking system is its legitimacy. or adaptability and flexibility. here i provide a number of examples again and not because they are stupid or different to these changes but they actually have tried hard to convince congress to allow them to compete and that includes what would be the rational response to that. and the supreme court was wrong in its decision last year, i believe, to strike down a section for formula and it was actually right in its denunciation of the anachronistic nature of that

among those adopted, the volcker rule is obviously one of them. a bad actor which very important to investors with certain offerings should not be exempt if you associate with bad actors. we have proposed all of the title vii will makings under our jurisdiction, some adopted but it is a very high priority for 2014 for us to complete those. we have adopted the municipal advisors rule, a number of others have been adopted. and again we've completed on all of the mandated studies that were assigned to us under dodd-frank. it's that important these will makings are done, obviously probably at that certain one of my commitments and one of the commitments i made at my confirmation, ma but also to be done well and to be done after careful and appropriate economic analysis. and so we are all very closely focused, as one of our highest priorities in completing those mandated will makings under the dodd-frank act and under the jobs act. >> do you feel you have the necessary expertise on staff to adequately issue and enforce the rules required by dodd-frank?

er -- volcker volk rule. and the derivative protection. those are the two factors that caused this bill to not have more bipartisan support. >> i think that question sets the stage for me. if you said, was it necessary to have a democratic president in the house and senate? no, but it would have been a different bill. it would have been possible if we had a republican president and democratic house and a democratic senate. it would sadly not have been possible if we had a democratic president and a republican house and senate. i'm very explicit. we showed much more willingness to cooperate with a republican president than they showed every bill, even barack obama. it would have been weakened. you mentioned the housing bill. that was a major piece of legislation. it reorganized fannie and freddie and gave the treasury power to do it. it created the first efforts to try to deal with foreclosure. it dealt with a very large chunk of things, giving large authority to the section of the treasury. that happened with the bush administration and th

to give a comparison, paul volcker, the large, time for reagan deficit, he monetized 9%.e question is, professor, sorry to interrupt, but the question is what are the, where do we see the consequences of this kind of behavior? because so far with the exception of food, and oil, we don't see much inflation, or at least the fed says there isn't much inflation? >> yes, well they bottled up all the money growth on the bank balance sheet by paying them a quarter of a percent interest and they didn't have many other places to put their money. so that's what they did. but that's going to leak out. and as it leaks out we're going to have inflation. david: so you think, you think that the food prices are just the beginning? we are going -- by the way today we should mention fedex did increase its prices for delivery of certain goods. we have seen other examples of price hikes besides just what we see in the aisle. of course there is the question of, the minimum wage and some wage inflation as well. is that how it is going to drip in? >> yes. i mean, a little bit by little bit we'l

youhe volcker rule moves significantly. >> let me pick up on that. dodd-frank deliberately pushes risky activities out of the banking system like the volcker rule. we have seen mortgage servicing assets move out of the banking system because of higher capital, which is directly aligned with dodd-frank and -three.ed by basel does the act sufficiently address the buildup, the potential buildup of risk outside of the traditional banking system such as through pb? cf >> with the consumer protection every, particularly fsoc, time a new product line emerges or new institution emerges, you cannot go back and pass legislation every year or two. changese pace of globally. we are talking about a global market. one thing barney and i care deeply about someone is going to , lead on these issues around the world and if we didn't, someone else would. we would have to play by someone else's rules. not something i want to see happen. tothe united states wants lead in this matter. we are getting some compatibility. it is a harmonization of rulemaking in the european

he is a bit like volcker was in the u.s. one suggestion i have heard is that -- is clearly worried about how tight money policy is and roger has no ax to grind. will there be some deal done between -- deal than between greenspan and clinton. key.will be >> check and balances that we were talking about earlier. stick around with us because we have a group discussion coming up in 20 minutes. afternext, six months back in the philippines to witness the rebuilding effort. the storm left millions homeless and took away their ways of making a living. bloomberg has been back to see how things are now. the family survived the disaster, but-high-end -- but haiyan took almost everything they owned. >> we cannot rely on it anymore because i will eventually run out. we have to start rebuilding our lives. >> she is one of the thousands who relied on the fishing industry, one of the main sources of income in the areas devastated by the storm. >the unit estimates that in just these provinces, but one of 5000 fishing boats were destroyed. a

we have these two institutions that we have to make sure you don't get caught up in the volcker rule.i thought it was appealing that he had this staff to remind them -- two institutions to protect. >> remind me what they are. >> you have to understand that was happening across congress. everybody wanted to be for reform. there were people that wanted to be for reform but a lot of people wanted to be for reform could not be for reform if reform is going to damage the economics of institutions or businesses in their states. >> you come away from the book thinking your worldview is washington is better than we think and congress is worst than we think. >> i don't think congress is worse than you think. [laughter] >> it is hard to do that. tell us about your phone calls to the senator from illinois when he was in china. >> i was in china. i went to china pretty early in my tenure. i arrived in china and the foreign services officers who had been following mark around beijing told me that in his meetings, he was telling the chinese to sell treasuries because we were going to have hyperinfl

and the volcker rule. they ended up in a good place. is messy.ut at its core, very powerful, very important. they will endure for a long time. >> did you leave anything else out? anything too interesting to tell, looking like you had assassination in your eyes or something? i had to tell the story of our decisions. at i wanted to frame them in discussion of the substance of craft, pretty neglected craft, which is how to fight financial fires more effectively. try to write a comprehensive history of every conversation. i tried to write a story about this neglected, consequential craft of how to build better firefighting capacities for financial crisis. >> when you read this and other people who write memoirs of their time in government, how often it is a story of people. >> it is. there are some remarkable people making judgments. >> and not knowing -- >> i tell the story about how there is a central banker in india who gave me a book in 2007, i think, maybe early 2008, a book by a tool go one day -- a you know.e, who he said, this is the best boo

it wasn't the volcker rule. it had to do with the creation of a consumer protection bureau and what they perceived to be too tough on corporate governance issues. those with the two factors that cause this bill not to have him bipartisan -- to have bipartisanship. was a necessary to have a democratic president and house and senate -- no, but it would've been a different bill. it would've been possible if we had a republican president and a democratic house and a democratic senate. it would've been possible if we had a democratic president and a republican senate. we showed much more willingness to quite right with a republican president. we would've had to weaken a little bit. the one example of that -- that w a major piece of legislationas. . he created the first efforts to try to deal with foreclosure. it dealt with a very large chunk of thanksgiving large authority to the treasury. that happen with the bush administration. it could've been passed it wasn't a republican house-senate but it would've been a less

the big debate over the volcker rule, but i think by and large he will give you the sense that he feels system is safer but not as safe as it could be. >> when you look at what is going on with charges against suisseibas and credit , will we get some sort of an announcement this week? >> we are moving closer to an agreement. during the financial crisis we talked about collateral damage, risk, systematic meltdowns. there is the threat of that and what is happening today with credit suisse. the justice department coming down on them, playing hardball and trying to get a guilty plea out of them because we do not know what is going to happen. it they actually do invite a bank, what is the collateral damage? there is an echo for what happens to the broader system when the deals get made. that is what the justice department is doing, going over the details. >> i do not know that the prosecutors can know that for certain. obviously nothing in the future is known for certain. i put in a number of phone calls last week to answer the question myself. theked what would happen if bank were indicted

experience for them was the 1970's when we saw very high inflation and a huge effort by chairman volcker to tighten monetary policy to bring it down. we lived through a period in which fed policy wasn't sufficiently tight and high inflation led to a rise in inflation expectations. we saw that those inflation expectations could become a persistent source of high inflation and that it could be very costly to lower inflation. the lessons from that period are very real for all of us, and none of us want to make that mistake again. i do believe we have the tools and the determination to avoid that. we indicate inflationary developments and inflationary expectations are part of our focus. as we watch what the likely evolution of inflation is and i can't say that, you know, that we will get it perfect but i can tell you that the committee has adopted 2% inflation objective in order to make clear our commitment to achieving that objective and to be held accountable for it and we're determined to have that happen. >> of course, if we raise interest rates, our debt payments, our interest payments

you think of the volcker rule.ave been in the business of a lot of proprietary trading. he is going to hold more capital. they are being overseen much work carefully. we being the same thing applies here. the government is the largest show holder of these companies. it to get them out of the high risk businesses. over time, they should sell this into the markets. the taxpayer makes hundreds of millions of dollars. we preserve the housing market for people. originalve the shareholders. >> hold on. is the holdup than that it just seems like the base of rich hedge fund guys versus the government. if richard perry wins and it is deemed illegal, what is going to happen to all that money? are they going to come back and give it back? >> they have another 35% out of 20%. 80% of fannie and freddie are owned by the taxpayer. the notion that the taxpayer should throughout the 87% does not make a lot of sense. i do not think it is that. fannie and freddie have one of the most democratize the shareholder bases in the world. i

not under orders of the volcker rule, banks are supposed to be getting out of very capital intensive estate. >> absolutely, nonliquid. so what will blackstone do with it? do they have to put money into it? >> that is the beauty of this. the length of the blackstone had in this asset -- i should say, auction -- they had a check up. $13 billion to play around with in its real estate funds, probably more if you look at the european and asian money they have. that made them a very compelling fire for this asset. there are not too many people that could put down $1.7 billion. they had a lot of leverage here. i rarely say this when deals are announced, but this actually looks like a good deal for blackstone. >> and a good field trip for cristina alesci. >> the right amount are wrong, i think, is the slogan for the company. sounds fun to me. >> appreciate it. when you are out of time, this is the place to go. the company that will rent you a luxury watch. ♪ >> welcome back, everybody. you are watching "market makers ." who would rent a rolex? you might be surprised. a company allows men to

experience for them was the 1970's when we saw very high inflation and a huge effort by chairman volcker to tighten monetary policy to bring it down. we lived through a period in which fed policy wasn't sufficiently tight and high inflation led to a rise in inflation expectations. we saw that those inflation expectations could become a persistent source of high inflation and that it could be very costly to lower inflation. the lessons from that period are very real for all of us, and none of us want to make that mistake again. i do believe we have the tools and the determination to avoid that. we indicate inflationary developments and inflationary expectations are part of our focus. as we watch what the likely evolution of inflation is and i can't say that, you know, that we will get it perfect but i can tell you that the committee has adopted 2% inflation objective in order to make clear our commitment to achieving that objective and to be held accountable for it and we're determined to have that happen. >> of course, if we raise interest rates, our debt payments, our interest payments

i think the fact that the agencies charged with implementing the volcker rule actually worked togetherand came up with a joint rule including cftc and the sec was enormously important both to the strength of the rule and the consistency and certainty for the marketplace. >> thank you. senator moran? >> mr. mr. mr. chairman think you very much. senator johanns may be based upon the relationship i have had with other cftc chairman telling me the presumptions is that if you are creighton grad you could do no wrong. chairman wetjen thank you very much for joining us today. i appreciate the conversation we had in my office yesterday. you have indicated to me and i've seen evidence of it, the desire to work hard to develop good solid relationships with congress and i'm very grateful for that and i look forward to accomplishing that is well with you. let me just ask a question that in part we discussed yesterday. implications of rule makings mandated by dodd-frank. what are you able to do to mitigate what is always described as unintended consequences? you and i have been touched with regard

we have these two institutions that we have to make sure you don't get caught up in the volcker rule.i thought it was appealing that he had this staff to remind them -- two institutions to protect. >> remind me what they are. you have to understand was happening across congress. everybody wanted to be for reform. there were people that wanted to be for reform but a lot of people wanted to be for reform could not be for reform if reform is going to damage the economics of institutions or businesses in their states. booku come away from the thinking your worldview is washington is better than we think and congress is worst than we think. >> i don't think congress is worse than you think. [laughter] >> it is hard to do that. we bullet the luncheon crowd beside. tell us about your phone calls to the senator from illinois when he was in china. >> i was in china. i went to china pretty early in my tenure. i arrived in china and the foreign services officers who had been following mark around beijing told me that in his meetings, he was telling the chinese to sell treasuries because we were

we have two institutions we have got to make sure don't get caught up in the volcker rule in effect.as appealing, he asked staff to remind him where those institutions were. >> let me remind you what they are. >> i don't know. it was happening across congress. everybody wanted to be for reform. a lot of people wanted to be for reform could not really be for reform if reform was going to damage the economics of institutions or businesses, it is the reality of life. >> world view is washington is better than we think and congress is worse than we think. >> i don't think congress is worse than you think. >> very hard to do that. >> we will let the luncheon crowd beside. tell us about your phone call to mark kirk, senator from illinois, when he was in china. >> i went to china pretty early in my tenure. i arrived in china and the foreign service officers who had been falling mark kirk around beijing told me in his meetings he was talking to the treasury's, we would have hyperinflation and might default. i find that remarkable. there was no evidence, no reason to be concerned because the

he is willing to do -- i remember volcker had to do some things that weren't near term, weren't positive the business environment. if modi is elected they will both be emboldened to take hard steps. >> rajon has been extraordinary for india. so in terms of expanding foreign reserves, stabilizing the currency, these are things that clearly are of long-term benefit to the country. i can't think of anything negative. >> really? >> the flight capital will come in and go out. but in terms of capital expenditures and long-term investments, it's still quite positive. >> how do you handle the neighbors. pakistan, china. >> i think in general he will have to improve his cultural sensitivity. >> dramatically. >> he has to be a bit more culturally sensitive. i think he's going to reach out to his neighbors. i think it's critical to his own growth. >> what is the one thing you have seen? we have stepped back from the brink a few times from kashmir to pakistan. >> it's been proven again and again. and i think we will see it again. >> u.s. real estate. >> yes. >> what do you make of the 10-year? >> it

geithner and said i could probably be with you on your financial plan, but i need an exception to the volckerle. and he turned to his aide and said, which ones were they again? >> you're talking about gwen hubbard who is the head of the council of economic advisers. and so geithner talks about going to hubbard and talking about simpson bowles. when you're ready to raise taxes, there might be a deal here. and he quotes hubbard saying of course we have to raise taxes. hubbard said that's a lie, that never took place. that's the conversation you were talking about there. i believe we have geithner on tomorrow. >> good. >> going to join us on "morning joe" tomorrow. mike allen, thanks so much. good luck with the five fingered shoes. >> have a good week. >> they look good on him. certain guys pull them off. >>> still ahead, a dangerous and effective way to get rid of a pesky black bear that's been in your back yard. >> oh, my. >> we'll explain in news you can't use. plus donald sterling speaks. this time on the record. his take on that rant is next. and vladimir putin hits the ice for a friendly g

they are enamored with it and they're playing all of it, the volcker rule, to the smaller institutionsurts the recovery. the small banks make the loans. >> it is noted, govern ohio revised code, many of the smaller banks that might normally be a good outlet community lending are getting out of the business because of the burden some requirements and are moving to commercial, building office buildings, which means in some ways regulation that was to constrict the power of the biggest banks might actually increase their power by sending more mortgage borrowers to the biggest four or five banks out there. >> like i said, at the outset, they are cod tpaoeug excessive caution. they are told get out of the mortgage servicing business because you have to have so much more capital and they have no source of capital. they're going to get out of the mortgage servicing business. regulation has to be tailored, reasonable. unfortunately, bad facts frequently make bad law. we have done that with some of dodd/frank and all of basel 3. >> we do want younger people to buy houses. we don't want to make

volcker said borderline on challenging the charter in many conditions.ld still have these types of programs in place five years later? does it disappoint you? do you think we'll ever see normalization? >> well, first of all, it is, of course, not normal than five years after the -- >> well, i think i lost the shot, and i'm very sad, because i think mr. trichet was doing a great job, and the last question was my favorite. wherever you are, the trichet, as we call you in chicago, thank you. back to you. >> thank you. that made my day, rick santelli and jean claude trichet. >> i didn't know he had a chicago name. >> who's we? >> you know, central bank followers. >> still ahead on the show, it's been a roller coaster week for sprouts. falling sharply on the heels of whole foods' disappointing results, but it's now solidly in the green, as you can see, after its profit has risen. we'll talk to the ceo about the results, the state of the consumer, and the organic food industry when we return live a little later on. when folks think about what they get from ala

experience for them was the 1970s when we saw very high enflags -- inflation and a huge effort by chairman volckerown. we lived through a period in which fed policy wasn't sufficiently tight, and high inflation led to a rise in inflation expectations. we saw that those inflation expectations could become a persistent source of high inflation, and that it could be very costly to lower inflation. >> and, of course -- >> -- and the lessons from that period are very real for all of us, and none of us want to make that mistake again. i do believe we have the tools and the determination to avoid -- to avoid that. we indicate inflationary developments and inflationary expectations are part of our focus as we watch what the likely evolution of inflation s is. and i can't say that, you know, that we will get it perfect, but i can tell you that the committee has adopted a 2% inflation objective in order to make clear our commitment to achieving that objective and to be held accountable for it. and we're determined to have that happen. >> of course, if we raise interest rates, our debt payments, our interest