statements as a component within the financial statement. they report on these financial statements. i want to thank sfcts staff. we have no difficulties in the performance of the audit, although it's a transition year we were able to complete it with no exceptions. with that, i will be happy to take any questions. >>supervisor john avalos: thank you for your work with the audit. there is no questions now. i appreciate how the audit came out and no deficiencies and sound financing. so appreciate that, thank you. >> thank you. >> i would just like to mention this item went before cac october 28th and there was a motion for adoption of this report. in terms of the budgets fiscal impacts there were no cost for fiscal year 14-15. that's good to hear , with that. i'm here to answer any questions. i would like to thank the finance staff for their quickness on the audit. lily yu and my staff who spent many hours putting this together. one of the key reasons we were able to finish so quickly was because of the new enter price this committee approved

states that doesn't include the new local and regional financial institutions that will be rapturing in this and being part of this network of an emancipation proclamation precedent banking access for the low income and minority immigrant communities access to financial tools like bank on sf and national standards is a innovation i'm proud that i know that as someone who used to focus on organizing tenants in chinatown i know that this will be just as important as to organize people around their financial literacy because i think that is in many cases the new civil rights movement of empowerment that is the beginning we have to do more and share with our $9 billion budget contracts local women owned businesses and make sure there is a network for people to get hired in those local jobs so that the robustness of our city is felt by all the communities that means we have to work aggressively on affordable housing and means we have to end discretionary problems whether community or social nature or education we've got to do even more having national s

the economy. today we aim to regulate and supervise financial firms in a manner that promotes the stability of the financial system as a whole. this has led to a comprehensive change in our oversight. as my written testimony describes in more detail, we have introduced a series of requirements that the largest and most complex banking organizations that reduce the risk to the system and our economy that could result from their failure or distress. in addition we now supervise on a coordinated forward looking basis. at the same time, we've been careful to make more measured changes. in our approach to regulating and supervising firms at the other end of the spectrum. we're committed to ensuring that the supervision of smaller institutions is tailored to the business model and activities of individual institutions. in supervising community banks, we're refining our risk focused approach which aims to target examination resources to higher risk areas of each bank's operations and to ensure that banks maintain risk management capabilities appropriate to their size and complexity. given the important r

of the financial system as a whole. this has led to a comprehensive change in our oversight. as my written testimony describes in more detail, we have introduced a series of requirements that the largest and most complex banking organizations that reduce the risk to the system and our economy that could result from their failure or distress. in addition we now supervise on a more cured natucoordinated fo basis. at the same time, we've been careful to beimake more measure changes. we're committed to ensuring that the supervision of smaller institutions is tailored to the business model and activities of individual institutions. in supervising community banks, we're refining our risk focused approach which aims to target examination resources to guyer risk areas of heech bank's operations and to ensure that banks maintain risk management capabilities approach to their size and complexity. given the important role that community banks play in their communities and the economic support they produce across the country, we rec

states that doesn't include the new local and regional financial institutions that will be rapturing in this and being part of this network of an emancipation proclamation precedent banking access for the low income and minority immigrant communities access to financial tools like bank on sf and national standards is a innovation i'm proud that i know that as someone who used to focus on organizing tenants in chinatown i know that this will be just as important as to organize people around their financial literacy because i think that is in many cases the new civil rights movement of empowerment that is the beginning we have to do more and share with our $9 billion budget contracts local women owned businesses and make sure there is a network for people to get hired in those local jobs so that the robustness of our city is felt by all the communities that means we have to work aggressively on affordable housing and means we have to end discretionary problems whether community or social nature or education we've got to do even more having national s

to sayother question whether or not people want the financial sector. and also very important connected to that is those marketing fairly organized and accountable. >> how much progress you think you've made on that? >> huge amount of anger with the bank. is there any hope for our list i the british public? >> think it's understandable the skepticism. how much progress has been a? a lot from making the bank stronger. a lot of progress on paper has been made towards results. not has been limited. the key issue -- i think what angers people is the individual responsibility has not been there. big things against institutions but relatively little -- some bankers have gone to jail. >> is broader than that. culture and the codes of behavior of a broader set of people in the industry. we made sweeping changes. we are in the process of conduct any industries. you see a very much as a product regulator. we connecting those codes and behaviors to individual responsibility and accountability so that if their institution -- the people see the managers and superviso

the other has been in part of the financial crisis. so because it has brought up factors and the graco -- demographics. equilibrium interest rates that are consistent with achieving inflation target and having the economy grow at full employment. it has progressively fallen over the years and then aggressively fell in the aftermath of the crisis. the ability of central banks to stimulate the economy has been challenging. arguably, they have been catching up to provide that degree of stimulus. i argue that both the u.s. and the u.k., what has happened in the last several years has been because of the repair of the financial system, because of paydown of households of debt because of the repairs on the fiscal side. those equilibrium interest rates have been gradually increasing and we are getting more traction with monetary policy. that is the good news. if you are relatively small, let's call it a medium-sized open economy like the u.k., you face a bit more of a head wind from about -- a broad. relative terms, we import more global disin

what you think would hurt the financial side of britain if that would happen? >> i think this is another case where we take it as a gift. uk's member of the european union. >> we do have to do contingency planning. this is an example. we will -- we are doing that. we will never disclose or contingency plans in advance. we only disclose them once the issue is passed. >> which bit of it would worry you? what should both try to cover? >> the issues around our relationship with the european union of these details not just in a speech but in an associated report, i think the general point from a macroeconomic perspective is that the u.k. runs a very large current account deficit that's natural given the economy. that deficit needs to be financed. it is financed with very solid largely long-term investments. it's important that this economy continues to be the attractive to -- destination for foreign capital. our contribution to that is military and financial stability and we will continue to do that. our policy is continue to invest. >> they can invest in confidence.

today, we aim to regulate the supervised financial firms in a manner that promotes the stability of the financial stump as a whole. -- financial system as a whole. as my written testimony describes, we have introduced a series of requirements. in addition, we now supervise financial institutions on a more coordinated, forward-looking basis. at the same time, we have been careful to make more measured changes in our approach to regulating and supervising firms and the other end of the spectrum. we are committed to ensuring that the supervision of smaller institutions is tailored to the business model and activities of individual and to editions. -- individual institutions. our approach aims to target risk areasto hire ch and two in short banks maintain risk management capabilities. community banks many important roles and provide economic support across the country. the supervision of community banks must be balanced and measured. we have adopted many reforms since the crisis. proposedss the risks by large institutions anin two ways. reducerms the possibility -- the reforms reduce the pr

she's the ranking member of the subcommittee on capital markets of the financial services committee, mrs. maloney. the chair: the gentlelady is recognized. mrs. maloney: i thank the gentlelady for yielding and for her leadership. mr. speaker, i rise today in opposition to h.r. 3189, and i ask unanimous consent to place in the record an article in "the wall street journal" written by allen blinder, a former vice chair of the federal reserve, a professor at princeton and a -- the author of the book on the financial crisis, the response and the work ahead. this is his strong article in

statements as a component within the financial statement. ey report on these financial statements. i want to thank sfcts staff. we have no difficulties in the performance of the audit, although it's a transition year we were able to complete it with no exceptions. with that, i will be happy to take any questions. >>supervisor john avalos: thank you for your work with the audit. there is no questions now. i appreciate how the audit came out and no deficiencies and sound financing. so appreciate that, thank you. >> thank you. >> i would just like to mention this item went before cac october 28th and there was a motion for adoption of this report. in terms of the budgets fiscal impacts there were no cost for fiscal year 14-15. that's good to hear , with that. i'm here to answer any questions. i would like to thank the finance staff for their quickness on the audit. lily yu and my staff who spent many hours putting this together. one of the key reasons we were able to finish so quickly was because of the new enter price this committee approved fo

as a member of the financial services committee, i strongly supported the creation of the consumer financial protection bureau and continue to be a strident defender and proponent of cfpb. i support this bill to correct the cfpb's guidance with respect to indirect auto lending, which would increase the cost of consumer financing. in our effort to find discrimination in the marketplace, we must be careful not to push for policy solutions that hurt the very consumers we are trying to protect. this bill does not prevent nor hinder the cfpb or any agency from enforcing fair lindhing laws. rather, it provides an opportunity -- fair lending laws. rather, it provides an opportunity in a more clear and transparent manner. i urge the cfpb to work closely with thinkholders to improve the guidance in this important area. i also encourage the bureau to develop and implement a financial literacy program aimed at teaching consumers the skills necessary to make informed financial decisions regarding the purchase of an auto through the use of financing. we need to do everything we can to ensure americans ha

the tools in u.k. and globally to resolve it. it is imperative for financial stability. we will announce next week an agreement on total loss absorbing capacity, global agreement. you have seen the u.s. announcements. there is a global agreement we have secured which will be recommended to g-20 leaders. this is the defining moment in forcking ending to be to go -- two big to fail for big institutions. even then have to go through several years where banks reorganize capital structure and business models to be consistent with that. it is when you get to the end of that process in the next few years you are in a position where i can say we think we can resolve one of these institutions. we recognize that. with respect to your specific question, we are very conscious at the bank of england we have a banking sector that is almost five times gdp. we have a financial sector on the road to being 10-15 times gdp as a whole. we need to have that organized in a way that it is resilient and so individual institutions, whether banks, insurance companies, hedge funds, asset managers,

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did he have any solutions on how true fix that in the financial markets? hadow baking -- shadow banking goes, no, we did not get to that point but the answer is it needs to be regulated. there is nothing wrong in principle with the kinds of things lending club is doing, modelng a very low touch and some of them are working with banks, that banks and that owning on balance sheets perhaps syndicating and securitizing. there is a symbiotic is there but a lot of origination is happening outside the eyes of regulators just as it did in the mortgage factory, crummy loans. ultimately, i'm not saying it is exactly the same thing that the point is not all that different. scarlet: we need to go back to the financial crisis the civic late. he was right there, he felt it. what did he say was the biggest mistake from that time? erik: we love asking anyone in , negotiating with the fed and the treasury department, trying to prevent them from collapsing in 2008 and here's what john said. john: there is no question the singers big it just single biggest mistake was to allo

hightower is the new blueprint for financial advice. we live by the fiduciary standard, a legal pledge to put client interests first. not because fiduciary is the latest fad, the -- but because it is what we were built to do. >> checking fantasy? >> just my 401k statement. what i can' t seem to save anything. >> what about this, all the money you are spending? >> what money? i spend it before i get my hands on it. >> i have a pizza for todd. >> can somebody spot me? >> when it comes to financials, don' t get left behind. anthony: you get the call from the white house to become a member of the board of governors. you are going to transition from talking and teaching about implementer -- monetary policy to implementing it. or different? is the way you have to talk. when you are a college professor, you throw out ideas, give hypothetical examples, silly examples. when you are the fed chairman, every single moment matters. you have to be careful about what you say and make sure that what you say is what you meant to say. that is a big differ

in various sectors, including the financial sector. and when people look back 10 years or 15 years from now, we see that the market reform is really good. not only for china, but for the rest of the world. betty: let's see, 12 months from now, will the rmb be lower in value? mr. yang: it is normal for the currency to move either way. but it is a reliable currency, and more and more people actually do their trades in renminbi. and i am sure it will continue to play a healthy role not only in the chinese community but in the international trade and investment and so on and so forth. betty: were you surprised by how the markets reacted to the devaluation of the renminbi? mr. yang: let me say this. every country has its challenges and their problems, and every country should do a better job of their own economy. betty: they should mind their own business, right? mr. yang: i do not mean that. what i mean is that the chinese economy is a big one, but it is not that big. there are many players in the field. so their economic performance fundam

you state to supervise financial firms in a manner that promotes the stability of the financial system as a whole and limit the systemic -- systemic damage that would result if a large financial institution does fail. i mean, obviously we always want to learn lessons from different situations that we have experienced prior to the llapse in 2008 the fed was eated to or was focused on financial stability but we once per about one -- generation some sort of collapse. how do you believe that what the fed is doing now prevents us from another experience like e did in 2008? as i tried to decribe in my testimony, i think the focus of supervision has changed and is now far more focused on financial stability than it ver was prior to the crisis. we are trying to diminish the risks of another financial of ways most mber important i would say is to improve the resilience of all of those systemically important much o that they have greater ability to survive adverse conditions and to continue to meet the credit needs of the economy. we have much more and higher quality capital, higher liquidity re

lastly, the financials. kind of comparatively, that's why there was a significant drop. >> correct. >> what were the drivers settlement. >> not only could the respondents invest in the building and provide the mandatory described in the report how financially viable moving forward. is there a financial engine so support whatever use. we're talking about a very long term potentially up to 55 years. we as a department and the panel wanted to ensure that any use moving forward had a sound financially viable plan to move forward to support the use the duration of the term >> following up on that point, just to appease me frankly, worse case thei scenario, i'm not suggesting any one have a circumstance, we choose someone that's not financially viable. what happens to the space and what happens in those circumstances? >> we would do our best to keep the space occupied. right now we do have two active tenants, next month we'll bring extensions for your consideration to keep them active throughout the bidding process

a lot of people point and paid no role in the financial crisis. anks like washington, countrywide had no obligation. maybe citigroup was a little worst. the industry was not deregulated. it was missregulated. >> do you think that the federal reserve it was up to her ideal that she expresses in her words? [laughter] >> no, i would go beyond that. i had the opportunity to talk to ceo. i've asked him a simple yes, do you believe in price control. in other words, could a group of experts in washington, d.c. set the right price for an automobile. absolutely not. that's crazy. well isn't the feds setting a price and the group of experts know from the competitors, we set wrong. they had no answer. >> well, thank you. i have no further questions for this witness, your honor. >> very good. would you like to cross-examine the witness? >> you have five minutes. >> and then turned it into securities. when you say those securities were priced accurately by financial markets -- >> i would say they were underpriced in general, but primarily because they were mark

"the financial times" and "the economist," two that pearson sold. the break we talk acquisitions, strategy, and leadership. john: if we can find acquisitions that create value to shareholders and long-term sustainable opportunities as well, we will take them. francine: more from john fallon when we return. ♪ ♪ francine: welcome back to leaders with lacqua. publishing group pearson will gain a billion pounds from the sale of the "ft" and "the economist." but what will it do with the money? john: if we can find acquisitions that create value to shareholders and sustainable opportunities as well, we will take them. but we don't need to hurry or rush, and we will do that in the context of returning capital to shareholders. francine: do you worry about currency movements? john: we judge things at constant exchange rates. we are a u.k. listed company. clearly the most important exchange rate that our shareholders look at is the pound-dollar exchange rate. over the cycle, we and most shareholders would look through that. clearly you look at events in brazi

sorting it out has been difficult for the financial community. community banks are taking a hit. it's expensive for them to conform to the new regulations. even at the middle sized regional banks, they're getting pressure under this. the large banks have come under severe scrutiny. it has not solved most of the problems which were created and caused dodd-frank to come down the route which is excessive and inappropriate underwriting of real estate loans. >> can i change the subject and ask you about the relationship between the fed chair and gop? the last time she testified before this committee it was testy to say the least. five months ago. since then there's been a lot of diplomatic activity between the fed and the rest of the committee to reduce tensions and last week they released 4,000 documents or pain pages of doc relating to the inquiry of that leak three years ago. what does it do to have donald trump suggesting this lady is keeping rates down at explicit request of the president? where does that put relationships generally with the fed?

inside the boardroom as was quoted here in "the financial times"? so, i'm sorry, what exactly did they quote? >> well, they just said that they were including whether employees should be fired or disciplined. that was one of the comments that was made. >> i'm not aware that we -- >> but would you approve of that? would you approve of them opining on whether this should be done or not? >> we should not be managing firms, we should be making -- >> should the fed be micromanaging these boardrooms and trying to dictate policy inside of a boardroom? >> we're not managing the firm. we shouldn't be managing the firm, but we need to make sure that the firm is managing itself properly. >> chairman yellen, following up regarding community banks, what reforms, if you can give some clarity on this further, would you say that the fed could do to reduce regulatory burdens on community banks? and also what would you recommend that we as a committee recommend to do to provide some type of regulatory relief for community banks to ensure that they can provide the best

of the financial system as a whole. and it's that financial system as a whole that i think provides maybe the greatest risk to the largest firms, or all of us. so are you really discussing that? are you discussing the fact that the brick nations are forming the ndb or whatever they are forming that other nations are trying to figure out how to avoid the u.s. currency because of our actions internally. are you having that discussion? >> well, we are bringing together a diverse group of people to consider what the significant threats are that could affect not only individual firms, but a set of firm that is are large and interconnected. >> with respect -- >> it could involve foreign threats. it could, for example, when there were stresses pertaining to the euro area, focus would have been how could they -- >> could your share with me the parts of the discussion that deal with china selling down its debt? with them selling treasuries, they have decreased the percentage from 74% to 54%. that, to me, indicates a strong reacti

doubling the allowable income level for people to receive financial assistance. earning a little more than $47,000 a year could receive the medicine for free. the move comes as drugmakers fears -- face fierce criticism over drug prices. ralph lorenz says quarter profits beat estimates. auren said stephan larson would receive -- precede -- succeed the company's founder and ceo. worker productivity grew unexpectedly in the third quarter. a slump in the number of hours worked by self-employed americans. the measure of employee output increased at a 1.6% annual rate. you can get more business news at bloomberg.com. for a look at u.s. markets i want to bring in abigail doolittle who is the latest from the nasdaq looking at biotech shares. abigail: stocks are sliding at the nasdaq. the composite index is off 6/10 of 1%. the nasdaq biotechnology index is off about 2% this morning. it's drag on the composite index, about a 60% weighting. when we look at a one-year chart of the nasdaq, we see volatility . it is up about 8.7% year to date but there are bear markets. one in

glass-steagall restrictions up until the financial a decade, was that an aberration? his wall street today more like the wall street you encountered as a young man a goldman sachs in 1979? john: it's very different. erik: in terms of compensation an opportunity? john: i have been in business for a long time in the financial world. i have seen the cycles go up and down. i was involved in the drexel bankruptcy, long-term capital, and most recently with bear stearns and lehmans and ultimately merrill. we are at one point in the cycle number the regulatory environment is more difficult. there is still going to be a need for financial innovation and new york and wall street is still the leader in the world. we still need to provide capital to companies to grow. we still need to find opportunities for investors to invest. stephanie: financial innovation is not fitting inside banks these days. when you look at mary sammons -- larry summers, all involved in fin tech. that seems to be the future in their mind. you and your position know more a

estimates, say best you also said the prospect of banks inside china, financial stability board, how much do you worry about tom much bad stuff there is -- how much you worry about that stuff on the balance sheet? one can expect that some point there will be an uptick. we haven't yet seen it. credit,ease in private aggregate credit has doubled two times in the last five years. as the economy slows and as nominal growth slows, -- chinese nominal growth was about 20% in the immediate aftermath of the crisis. it has slow to just above 6% at present. that therexpect would be an increase in nonperforming loans and banks would have to adjust to that. >> are they measuring that correctly? >> they have to actually start not performing before you can measure it. i would underscore that chinese angst have a very strong capital -- chinese banks have a very strong capital system. it is a process of adjustment through the financial sector is one of the reasons that we feel like growth is going to slow. >> are there any other emerging countries that you are worried about? issuese are a series of --

the tools in u.k. and globally to resolve it. it is imperative for financial stability. we will announce next week an agreement on total loss absorbing capacity, global agreement. you have seen the u.s. announcements. there is a global agreement we have secured which will be recommended to g-20 leaders. this is the defining moment in unlocking -- ending too big to fail for big institutions. you would then have to go through several years where banks reorganize capital structure and business models to be consistent with that. it is when you get to the end of that process in the next few years you are in a position where i can say we think we can resolve one of these institutions. we recognize that. with respect to your specific question, we are very conscious at the bank of england we have a banking sector that is almost five times gdp. we have a financial sector on the road to being 10-15 times gdp as a whole. we need to have that organized in a way that it is resilient and so individual institutions, whether banks, insurance companies, hedge funds, asset managers, etc.,

the next play -- financials have underperformed since the second half of 2009.e need to see a steeper yield curve where yields are going up, and that would tell you the economy is improving. tom: thank you so much. ncine, we are five minutes away. francine: five minutes away from that boe decision. it will be about the clues, about when the first rate hike will come. we have a deluge of things coming out of the bank of england. we have the vote. it can sway very quickly. i'm more interested in the inflation forecast and how they coreze it going up but insulation, whether that filters through wage growth and the fact that we are still able to -- compete in the u.k. tom: what is the level of dissent that governor carney faces today? francine: that the last vote it was 8-1. it is critical to see if mark carney is voting for a rate hike . it is probable at the next one a lot of the board members will go with him. tom: very good. bloomberg as we give you coverage, particular important headlines that go across. thank to brian belski of bmo capital markets. we continue

system and the regulation of the financial system. hairman and ceo of fitch group to get his take on these comments. ♪ the only way to get better is to challenge yourself, and that's what we're doing at xfinity. we are challenging ourselves to improve every aspect of your experience. and this includes our commitment to being on time. every time. that's why if we're ever late for an appointment, we'll credit your account $20. it's our promise to you. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around. betty: live from bloomberg world headquarters in midtown manhattan, you are watching bloomberg markets. courtney donohoe has more from our news desk. >> with the year and four days until the presidential election, tenants will start signing up for the first primary. new hampshire's filing period expires today. candidates must prove their eligibility, fill out a form and pay $1000. the projected primary date is paper nine. virginia's governor could hit roadb

s position as the global financial center. after all, 40% of global foreign exchange trading goes through london. half of all otc derivatives are traded in the u.k. 2-thirds of trading and international bond. more international banking activity is booked here than anywhere u.k. efforts made the system more resilient. the banks at the center of the system are safer. the capital requirements have been increased tenfold and the liquid assets on balance sheets have increased four times there's a new ratio that protects the system from risks we think are low but are not. banks trading assets have fallen by a third since the crisis. their borrows have been cut in half and the banks newfound resilience has been demonstrated recently as they have dampened rather than amply identified significant market volatility. >> that was mark carney at the boe open forum in london. he was talking about fairness of open markets. we'll bring you the highlights in the show. meantime, mario draghi will be taking the stage today. we'll bring you that s

"the financial times" and "the economist," two brands that pearson sold. the break, we talk acquisitions, strategy, and leadership. john: if we can find acquisitions that create quick and immediate value to shareholders, and long-term sustainable opportunities as well, we will take them. francine: more from the ceo of pearson, john fallon, when we return. ♪ ♪ francine: welcome back to "leaders with lacqua." publishing group pearson will gain nearly a billion pounds ♪ francine: welcome back to "leaders with lacqua." publishing group pearson will gain nearly a billion pounds from the sale of the "ft" and "the economist." but, what will it do with the money? john: if we can find acquisitions that create quick and immediate value to shareholders and long-term, sustainable opportunities as well, we will take them. but, we do not need to hurry, we do not need to rush, and we will do that in ways in the context of returning capital to shareholders. francine: do you worry about currency movements? john: we look at, obviously -- we judge things at constant exchange

bailed out by the dutch government at the height of the financial crisis. has returned from a to grade, betty. betty: it has. on the macro front, though, we were just talking about the ecb president mario draghi. it sounds like we are on for his stimulus in two weeks? july 2012, he said the ecb will do what is necessary to reach its inflation goal as quickly as possible. what is necessary, or whatever it takes -- that is what we said in 2012. .1% is a fast rise from just under 2%. he said that that it's doing its best to prepare markets, internationally, for u.s. rate increase. mario draghi is essentially telegraphing that the ecb is prepared to add more stimulus in two weeks. betty: let's check in, let's get that for a moment. we will be talking to mario about this. in on our bloomberg first word news. courtney has more. mali.ey: the latest from there are no more hostages in the hotel standoff. gunman's head stormed a radisson mali.in the capital of the hostages are free. there is a report 18 people were killed, including a belgian diplomat. the gunmen are