the fdic made money on these programs, no taxpayer losses. treasury used authority under the fund to guaranty the must be market funds. this had a mayor impact on stopping the run on the funds. this power was taken away by dodd-frank and not by dodd-frank actually, the earlier tarp legislation and treasury made fees on the program and never paid a cent. it remains a problem in my view and not cured but the sec's required floating on asset value, investors will still redeem and expect values to go lower. sec rules give authority to limit or change redemption in adverse conditions accelerate as commissioners observe in her decent of reform. the final tool used to combat contagion was tarp, there had been 204.8 billion. taxpayer did not pay for this. tarp expires by its own terms. much like the eu or japan have standing authority if the u.s. needs such injections from the future, authority would have to be obtained, might have been to be obtained in the midst of the crisis itself as it was in 2000. defenders of dodd-frank point to what i call tw

a strong recession indeed absolute confidence among market participants that the fed and the fdic can and will act and immediately to stop would be essentially to doing so. in banking language the credibility in this regard would need to be complete and robust. if there were doubts and warnings of the treasury secretary would go along for that he would delay unduly markets would be at high-risk of running. if you think there is going to be a hit let someone else take that hit. i would say that professor scott insistence on the privacy of this reality with respect to the treasury secretary approval for me is the most principle contribution. all of this said the concerns about moral hazard and reducing the risk of taxpayer losses to help drive the dodd-frank restrictions are obviously not frivolous. i think professor scott is not not denying the enhanced capital stand of the liquidity requirements authority and other actions taken to boost the likelihood of another crisis in the near-term and its severity if it occurs may prove beneficial although i'm arguing the book argues persuasivel

different organization very similar to the fdic, ncua. next you need to make sure you are in the right account. for example, bank accounts like a checking account, cds savings account are covered. if you own stocks at a brokerage account, they are not dic insured. lastly, to make sure that you need to make sure you do not have more than $250,000 per insured category. individual categories include joint accounts, trust accounts, tod account and others. it is usually a good idea to find out how your bank is rated. if you have questions about how to protect your money you can call our office today or you can email your questions at tips. >> if you would like more information tune into retirement was still smith sundays at noon. you can call the office -- bill smith sundays at noon . you >>> it's september 22nd. time for great viral videos right this minute. a mom and her child are hanging at the park. >> it's a typical chill day. >> but see what happens that has her running for safety. >> oh! >>> a little boy with a rare condition is ready f

>> our staff and the fdic staff do. and i think it's fair to say that all of the governors reviewed -- >> i find that very difficult to believe. but the gao has said thatneys li these living wills can cost up to $105 million. the average small business is capitalized with $30,000. so de facto, you're take away the opportunity to capitalize 3,500 small businesses with a living will that may or may not be read that may or may not be useful. do you consider the cost of this process as you impose it upon the financial institutions? >> we consider eliminating too big to fail to be a key objective of dodd/frank so that the american taxpayers will not be forced to bear the burden of a failure of a large firm. and i would tell you that the full board of governors met on the order of 12 times. we had around 12 board meetings to consider in great detail all the key aspects of the living wills of each of these firms. >> my time is expired. the chair recognizes the ranking member for five minutes. >> thank you very much, mr. chairm

if it is used, the fdic is designed as a single point of entry will require change at the. [inaudible] short-term funding at the operating subsidiary level for almost all short-term funding exists mainly through banks and their corporate subsidiaries would be on content unaffected. some hope this will stop contagion since the fdic resolution will not invade existing short-term funders. whether such restructuring will actually work, particularly for a major multinational bank is problematic. the procedure has never been tested. thus this is a prayer. the reality is, the creditors at financial institutions will run if the large financial institution is put into any kind of resolution. better safe than sorry and we need to be prepared for that. resolution procedures are good but don't think you can get rid of contagion fighting just because you have that. it actually works the other way. it's easier to resolve in the institution. [inaudible] i won't comment because alex will be pushing me off his platform on other solutions to the problem like limiting short-term funding but i

>> our staff and the fdic staff do. and i think it's fair to say that all of the governors reviewed -- >> i find that very difficult to believe. but the gao has said thatneys li these living wills can cost up to $105 million. the average small business is capitalized with $30,000. so de facto, you're take away the opportunity to capitalize 3,500 small businesses with a living will that may or may not be read that may or may not be useful. do you consider the cost of this process as you impose it upon the financial institutions? >> we consider eliminating too big to fail to be a key objective of dodd/frank so that the american taxpayers will not be forced to bear the burden of a failure of a large firm. and i would tell you that the full board of governors met on the order of 12 times. we had around 12 board meetings to consider in great detail all the key aspects of the living wills of each of these firms. >> my time is expired. the chair recognizes the ranking member for five minutes. >> thank you very much, mr. chairm

eleven banking organization submitted living wills in 2014 and the gao found that the fed and the fdic had not reviewed those submissions. i understand many of these submissions are thousands ofus pages long and there was one testimony that the see car reports are tens of thousands of pages long. i heard one that was 42000 pages long. i guess my first question is, does anybody at the fed actually read these reports and can i safely assume you don't? >> you can safely assume that many people have read these a reports.nd >> the someone really read a 42000 page report covered cover? >> do they know what to do with that? >> our staff do and i think it's fair to say that all of the governors review. >> i find that difficult to believe. the gao has said these living wills can cost up to a hundred $5 million they estimate the average small business is capitalized with 30,000 dollars so de facto, you are taking away the opportunity to capitalize 3500 small businesses with a living will that may or may not be read or be useful, do do you consider m the cost of this process? to impose upon the f

>> our staff, the fdic staff do. i think it's fair to say that all of the governors reviewed -- >> i find that very difficult to believe. but the g.a.o. has said that these living wills can cost up to $105 million. the sba estimates the average small business is capitalized with $30,000. so de facto you're taking away the opportunity to capitalize 3,500 small businesses with a living will that may or may not be read, that may or may not be useful. do you consider the cost of this process? >> well, we do -- >> -- as you impose it upon the financial institutions? >> we consider eliminating too big to fail to be a key objective of dodd/frank so that the american taxpayers will not be forced to bear the burden of the failure of a large firm. and i would tell you that the full board of governors met on the order of 12 times. we had around 12 board meetings to consider in great detail all the key aspects of the living wills of each of these firms. >> i see my time has expired. the chair now recognizes ranking member for fi

we'll have that story plus reaction from former fdic chair sheila bair. >> we'll get to her in just a moment. plus a new report says amazon is getting more serious about its own shipping business and it may be looking to ditch fedex and ups altogether. this as amazon stock continues to power higher. more on that story coming up a little bit later this hour. >>> and shareholders voting today to approve one of the largest corporate deals in history. we'll take a closer look at anheuser busch's takeover of sb miller. >> is that enough? we have more in the next couple hours. let's begin on the breaking news of the oil front that has moved the market today. jackie d. has it for us. >> the spike in crude oil putting some traders off guard today. closing today over $47 a barrel. now, three major headlines coming out of reuters regarding the opec meeting, but remember, they're citing sources. nobody officially has gone on the record here. you mention there is potentially a deal to limit production with november execution. also they're saying that they would limit to 32.5 million barrels a day

the fdic does not know that it's risky. did we not learn anything. it's been endorsed nationwide and including three noble prize winners ask by promoting a higher loss of the bank capital in exchange for the release of the regulations and then the economic growth for all bank bail outs for none and then assure that is the bank is accountable. we recognize the ranking member for five minutes. >> thank you mr. chairman for holding the meeting and thank you mr. young for making yourself available the testify today. just a few weeks ago we passed the ninth anniversary of the failure and leading up to 2008 much of the risk in the banking system went unchecked by the regulators. failure to quickly address faud and miss management resulted in the loss of more than 8 million joob jobs and millions of families lost their homes and entire industries were on the brink of collapse. congress responded to this devastation by passing the most comprehensive overall of the system since the great depression. the dodd frank wall street reform and consumer protection ac

is it fdic insured? >> it is backed up by the government.hink up to $50,000. >> we are not getting good interest rates now. >> we have to do straight up cash for gold. that's the only way out. >> she wants everything digital because she is a computer nut. she can find it that way. >> nobody is arguing with that. this is why i don't like to keep cash. if i do i drop it by the side of the bed. that does it for me. give me a muscle, mike. that limits where you earn bonus cash back. or... you can get the quicksilver card from capital one. quicksilver earns you unlimited 1.5% cash back on ev-e-ry purchase, ev-e-ry-where. i shouldn't have to ask. what's in your wallet?

. >> the fed along with the occ and fdic put out a reports on bank investment activities. the federation has several concerns with physical commodity activity. authority last week the fed interest -- issued a letter of proposed rulemaking. this would effectively prohibit many of these activities. the documents focused on the term of catastrophic risk. how does the fed defined that risk, and houses that commiserate? >> the fed has been motivated in the rulemaking by looking at the indoor miss environmental oilequences for things like spill, the bp disaster and other things and the other consequences of those things can cause financially for firms and also reputational he. done aconcerned and have rulemaking on fiscal commodity activities. that attempt to identify the risk we think identifies and identified the congress repeal of the merchant banking -- forty for us essentially the same set of reasons. >> when you are analyzing risk and you look at past activities, the question is, what passed environmental catastrophes have posed a problem for financial holding companies. c

former fdic chair sheila bair on all that.a guy, sheila, effectively saying if i had my druthers i would go along and hike. what do you think of that, that they might be ready to put trigger? >> i think it is time. probably past time. we really, been keeping interest rates far too low for far too long. i think it has distorted a lot of pricing and asset valuations of the getting back to normalized environment would be good. they need to do it slowly and gradually but they need to get on with it. it is past time. neil: what do you make of the bringing back all the guys from federal reserve districts from congress where they want to all dismantle the federal reserve? you have donald trump saying it has propped up this economy and created a bubble. what do you make of that? >> yeah. well, i think it is legitimate issue. i don't think that is fed bashing. that is raising legitimate issue about the wisdom of long protracted series of low interest rates. neil: bash, i want to be clear, coming from those say we give too much control,

some headlines crossing the bloomberg now as well -- the federal reserve, the fdic, and the office of the comptroller of the currency, according to congress required under the dodd frank act, are urging congress to repeal a section of the act that allows wall street firms to make investments in nonfinancial copies, prohibiting merchant banking, in fact. the banking index is still up .5%. banking stocks not unduly impacted by the headlines yet, but it is a merchant banking man, and it is to address soundness concerns and maintain the basic separation of banking and commerce. dodd frank lives, david. david: it continues to fight another day. david: now let's checked on the first word news. mark richt and has more from the newsroom. new poll shows donald clintonfeating hillary in white americans with no college diploma. among all likely voters who have not done pass title, clinton leads trump 47% to 42% in a two -way contract -- contest pitted was in a nursing moment for gary johnson when he was asked on msnbc when he was asked about the besieged syrian city of aleppo, he responded "and

member fdic ensured. [ applause ] and then -- enough of that. and then there were the presidential candidates. hillary clinton offered support for the city but initially deferred comment until more facts came to light. >> we've been in touch with various officials including the as they conduct this investigation. and i'll have more to say about it when we actually know the facts. >> seth: waiting for the facts. seems like a reasonable measured response from an experienced public official, but i bet donald trump went a different way with it. >> just this morning i got off the plane. a bomb went off in new york, and nobody knows exactly what's going on. >> seth: you can't say the words "a bomb went off in new york" if the next thing you say is "nobody knows what's going on." [ light laughter ] are you a presidential candidate or the old lady who lives across the hall from me? "a bomb went off. no one knows. if i die. take care of my cat." [ laughter and applause ] now despite jumping out ahead early without any facts, fair is fair. trump did get i

the federal reserve, the fdic, the sec, the cftc, the cfpb, fsoc.is a consider promulgating regulations, performing examinations. with respectable makings, the approach of market regular sometimes conflicts with the safety and soundness regulator's which in turn can conflict with consumer protection regulator. t and on supervision often the substance of examinations overlap but the timetables don't. and for data collection on most of financial regulation and big duplicate it and uncoordinated. so this is not only a burden on financial firms and undo burden that may be a drag on economy but also may lead to gaps in supervision. when you look at a fargo in the scandal we've seen, and to consumer fraud that went unpunished for five years, based on the time when we've seen, and the primary consumer protection agency is coming in on the tail end of that, again according to the time when we've seen. accort do you acknowledge that maybe the lack of regulatoryse coordination and inefficiency may be a problem? secondly what you think about proposals to conso

an fdic survey has found that their ranks at the time they have declined. percentage of americans without a bank account fell to 7% in 2015 from 7.7% in 20 to 10. good news for consumer spending. lauren: john malone's liberty media agreeing to buy the auto racing franchise in a deal valuing formula one at almost $4.8 billion. the cities around the world including austin, texas must recently in the united states. formula one carries with it the lucrative television rights and sponsorships to negotiate venues and teams could liberty media has liberty media has interest in the atlanta braves baseball team in satellite radio service series asks a good trade to keeping a close eye on laos for president obama is due to speak there. we will bring that to you by the minute he had said to the podium so stand by for that. in the meantime, quick market check. look at how they mixed bag, shanghai composite index gained a 10th of a percent. the hong kong hang seng up three quarters of 1%. >> the european central bank extend their bond buying program. i had in fact, acti

there is also the single resolution board, which is like the fdic of europe for big banks.all putting in regulations. deutsche bank very thinly capitalized. in the next three or four years, there is no way deutsche bank could go to the markets now and say, we need the kind of money investors want. they are not going to get it at the right price in the short run. that is not going to help them. it is a longer run problem the ecb is working on. francine: the problem is, if you are a bank, it is easy to blame the european central bank. say, you are forcing me to raise capital. this regulation is actually going against what i need to do. mario draghi, as you were saying, said no. is that a problem of business models? that is what ecb is saying behind closed doors. is a problem of business models and the way they cap operated since the crisis. certainly, negative interest profitability. the level of profits they are making is not significant enough to raise the capital the way most people would like to see. what they need to do is get rid of the bad loans on their books across e

for example, while the chairman has attempted to conflate this bill with proposals from people like fdic, vice chair thomas hoenig, the chairman's proposal doesn't include the same limits on derivatives activity in order to receive regulatory relief. so, mr. secretary, my question is, can you discuss how replacing more complex risk rates along with other dodd/frank measures might make sense for community banks engaged in traditional banking activities but is wholly insufficient when it comes to global megabanks? >> congressman, that's a very good question. i mean, we i think should be looking for ways to simplify reporting where appropriate for small banks that don't engage in a lot of risky activities. we have to always be aware that even small banks are in the business of making risk decisions. that's what banks do. and we have seen in the past that in the accumulated activity, small institutions can create a financial risk that's significant. but it's different than the activities of large global financial institutions. and we should be trying to distinguish. for the largest financial

to strengthen from the bottom, strengthen america and to lift all of us up, we can do a better the fdic did a study in 2014 that showed the impact and significant social roles that m bi provide in terms of financing and providing home mortgages. in terms of locating a branches -- there branches. we know that if we are able to thengthen and provide sector with the resources it needs for technology. to be all to engage in a powerful way with millennials. to be able to strengthen and broaden and product offerings, then it is so much easier as we talk about all of the benefits, that the entire country will experience by all of us becoming more prosperous. >> mayor reed, how do you think about this concept of investment? when you think

the fdic did a study in 2014 that showed the impact and significant social roles that m bi provide in terms of financing and providing home mortgages. in terms of locating a branches -- there branches. we know that if we are able to thengthen and provide sector with the resources it needs for technology. to be all to engage in a powerful way with millennials. to be able to strengthen and broaden and product offerings, then it is so much easier as we talk about all of the benefits, that the entire country will experience by all of us becoming more prosperous. >> mayor reed, how do you think about this concept of investment? when you think about the budget that atlanta has and the priorities you have, how do you strategize on the investments in your people and where you are really putting the massive effort. mayor: we try to perform along the lines of excellence. what we are doing right now is trying to make sure that we have the bench strength to execute while knowing that the city is one of the biggest multipliers for the economy. is ayou want in a city fair referee and someone that r

they're the ones that got the best grade from the fdic.e more vocal, maybe even come on "mad money" and talk about that situation. there's an invite for you. they like bank of america. and bank of america they think it's going to have expect earnings per share go to 13%, which would be very, very good. they love bank of america. and i think that's a very interesting switch, because they have been behind citi for a long time. and, wow, pretty critical. pretty critical of citi. >> yeah. between that and wells, deutsche, it's been an eventful week for financials. >> just the banks and then maybe no -- the deutsche bank is really incredible. they're playing it all wrong. well, i don't know, i'm not advising them. >> what's on mad tonight? >> i have the biggest winner of brexit. i'm not revealing but biggest winner by far. >> of what? >> brexit. >> oh. >> stay tuned. it's a secret. >> that is a tease. >> yes, it is. >> we'll see you tonight. >> we can show, it's great. >> good week ahead. >> yes. >> football's back. >> yep. >> "mad money" 6:00

were all the hundreds of regulators embedded in there from the consumer financial protection bureau, fdicserve. what were those people doing. but yes it's largely a failure of management oversight. ridiculous incentive scheme. >> my question is john stumpf, assuming the sbord involved, is he supposed to go to the board saying i'm going to go to this hearing and they're going to slaughter me. in advance of that, we need to make decisions to say certain things. maybe you should, you know, say that i'm going to get zero bonus this year or zero compensation this year. >> or you're going to clawback all the bonuses i have made. >> yes. if you take a look at -- >> is that on him or is that the board? how do you look at that as a governance issue? >> this is him. this is somebody -- it's like lewis at bank of america blaming regulators for what he did. the devil made him do it. in this case he was deferring -- throwing the board under the bus. i know for fact that the board was stunned by a lot of that testimony yesterday. there's some of the complexity to this they didn't appreciate until yeste

we're going to speak to the former fdic head about the state of financials, the fed, and much more. >sain. there's a new bolt in town. >> man, he's fast. >> chevy looking to charge up its competition with tesla. we hear from the head of gm's global development on the all new electric car. as the second hour of "squawk box" gets charged up right now. ♪ >>> welcome back to "squawk box," everybody. this is cnbc, first in business worldwide. i'm becky quick along with joe kernen and andrew ross sorkin. we are live at the pr hotel in new york this morning where the cnbc delivering alpha conference is taking place today. we've got a great lineup and coverage all day long here on cnbc. here's behind the scenes. but we're kicking things off today with jack lew. his keynote starts at 8:30 a.m. and he's going to be kicking things off. we'll bring you his comments as we get to this at 8:30 a.m. you'll be able to see it live right here on cnbc. right now the futures we've been watching pretty closely. showing some improvement. earlier we did see another triple digit decline for the dow. right now

. >> first you have problems that you do not have what you have in america which is an fdic to provideeassurance and guarantees. you don't have a single body of people like the treasury or fed who can go in there and make decisions like let's recapitalize the banks. do you remember the 2008 top crisis. you basically had 3.5 people running the financial system. they took quick decisions and acted. in europe it's so fragmented there's no one in charge. on top of that you have this horrible situation of a business model being smashed to pieces because of low interest rates and massive over capacity. >> no one accepts hair cuts. you keep issuing new debt to payback the old debt. >> it's a classic situation, sweep the problem under the carpet. >> kick the can down the road so many times. you try to figure out a new depression for saying it because we used it so many times. >> how do you say kick the can in german? >> i know the v sounds like a w. >> look what's happening with commerzbank. the italian banks. quite a widespread challenge right now. >> okay. this is going to be fun because we'