what is your assessment how the basel rounds impact the current european crisis. what is your assessment of what those changes require and how that interacts with what is currently happening? dr. johnson? >> i presume you're talk act the basel records on the capital requirements for banks. >> just so you know, the reason i ask the question, we have had a lot of commentary among colleagues, asking the question, what are the effects of inkresed capital requirements. are they sufficient? are they insufficient. what effect are they having on the current challenges. >> thank you, senator. it's a very good question, and highly appropriate to ask it. there's something between the agreement of basel and other governments how they agree on what capital should be. if you're holding something that's aaa, you don't have to have a lot of equity. well, what's a aaa asset in the european context? sovereign debt, including greek debt. and as was laid out for you, people were convinced, the markets were convinced greek and german debt were very, very similar in their credit risk.

requirements, what are the capital requirements in the basel round? >> well, it depends on exactly what kind of financial institutions you're talking about. and the headline number is between 10 and 12%. i would say the kev sill in the risk weighted assets. and if you -- if the risk weighted is so fundamentally flawed that they've missed completely the sovereign debt crisis and the true risks that all these european banks face, and our banks face because they're exposed to the european banks. they've hedged this risk through some offsetting derivative contract. the counter party risk in that swap is probably with a european bank, at least in part. how big is that in how profound is that risk? i don't know. i talk to the senior regulators on this issue. i don't know if the regularities would tell me if they knew. we shouldn't be -- i'm not saying move everybody mutually to 20% capital climates, you can't do that. you can suspend dividend payments, absolutely, across the board. given the european situation, that would be well receives, that would bolste

decisions about the basel capital regime. basel 3 and dodd/frank act eliminate tier one for trust preferred securities while dodd/frank provides a measure for trust securities for small banks with assets less than $15 billion, basel 3 has no such exception. because many small banks have trusts preferred securities, this issue will impact banks and their communities throughout the country. how do you plan to resolve the diversion for small banks taken by dodd/frank, basel 3, have you gotten into that yet and would you give your views on basel 3, whether it prevents another economic crisis and prevents banks from being undercapitalized? you know, the whole thrust is for banks to have more capital, which makes sense to me, and also to have liquidity, which makes a heck of a lot of sense. >> yep. i do think that the recapitalization of the banks and the provisions that we've made domestically here in the united states, as well as what basil is trying to trying to accomplish is helpful to the american system. american banks have m

lerrick. >> i echo simon's comments about the basel rule. i would raise two points. first, there's one true law of economics. that was first enunciated by the governor of the bank of england in the 19th century. every regulation will be circumvented. when you start setting out very precise rules, you are setting in motion an entire system of people. certainly spending their lives thinking how to circumvent them. remember, regulators are always one crisis behind. they're always thinking of that last crisis, they don't know where the next crisis is coming. they are paid far less, work far less hard. and are not as highly skilled as the people that are attempting to get around the regulations. you must keep in mind when you set out clear regulations, you have a problem. the second is, i was looking -- i saw an old photograph of a bank that had been closed back in the 1920s. but the front -- the window front was very interesting. in 19 -- before the federal reserve in the 1920s and '30s, on the front window of every bank it said capital, $10 million or $12 million or $5

under the full implementation of basel 3. >> is it fair to say the worst is over? >> it depends on what the worst is. in terms of the global economy, i think one of the lessons we've learned in the last couple years is, every time it's doom and gloom, that the global economy is far more resilient. we see china looking at 8% to 9% growth. we see reduction in unemployment in the u.s. so we've seen a real rebound. in europe, i think it's a very good example. we're expecting a collapse. well, germany is not collapsing. and germany is one-third of the euro zone. and i think we have to gain confidence when we start thinking about doom and gloom. >> it's a good point. for a little while i was worried germany was actually falling off a cliff a bit there. they're selling exports to the euro zone, right? >> yeah. >> but it's recovered. let me get to barclays' strategy. you have the slump in bond trading, you have the euro zone crisis, the regulatory anticipation last year. that pushed you to push back a return on equities, right, at the end of 2011. you had a target of 13%.

instead of a rally or a speech, hold a press conference after the basel's tonight. thanks so much. we will have complete coverage tonight caucus results at 11:00 p.m. nevada your station for caucus of days. the wrong side of the law. a maryland officer is in trouble tonight. >> you're watching abc 7 news. >> d.c. police are asking for identify a person of interest in the murder of a trans tender woman. this surveillance video was on the night she was at a bus stop in washington. investigators want to talk to the man in the video hoping he provide information on the for theor motive killing. offering a $25 and information inor this case. public as a $25,000 reward for the case.n in police have charged and officer with conspiracy to, to distribute cocaine. force 14 the police years ago. a reminder to metro riders. you are going to experience some delays this weekend. construction on the orange and red lines. metro will provide shuttle bus service. the repairs will wrap up sunday night and service should be back to normal monday morning. we will have more details on our wjla.com. a ma

el fc basel vencio por uno a cero al bayern munich....e el marsella en tiempo de compensacion y tras este tiro de esquina lograria la agonica victoria por uno a cero frente al inter de milan... andre ayew fue el autor del gol con remate de cabeza... ---inicio la gira promocional del combate entre el filipino manny pacquiao y el norteamericano timothy bradley... la primera parada fue en beverly hills california... pacquiao expondra su titulo welter el proximo 9 de junio en el mgm grand de las vegas... ante el campeon mundial de las 140 libras... ---y para terminar... el boxeador marco antonio veneno rubio presento una protesta formal en el consejo mundial de boxeo por supuestas irregularidades durante su plea del pasado 4 de febrero ante julio cesar chavez en el alamodome de san antonio... rubio argumenta que no hubo pruebas antidoping y ademas dice que un dia antes de la pelea chavez jr pesaba 159 libras y media y el dia del combate subio al ring con 21 libras de mas... rubio pide que anule la pelea... cu ---nos vamos al ultimo corte come

proud to win it in injury time to beat into man by the same score line but the headlines belong to baseltheir manager heaping praise on these players afterwards although by now confident they can turn things around. my team have surrender seen this focus concentration will have a great part of pure talent and due to this with the trick make sure we are in the position to turn over teams of the quality of barmaid. one must say want to flex on the whole game over the ninety minutes and i could see it would have been just to get a draw that said we lost one neal i think i have a lot of experience in european twenty minutes and i have been often in such situations and i know of course there is a second game and we might team that seed by and i myself have the confidence enough to believe that we can turn it around in the trial against me more match the city other first team to reach the last sixteen of the europa league play be defending champions porto four nil at the end he had stadium to go three six one and i get afterwards coach roberta man cheney said carlos tevez could be playing for

we should not be bound by the lowest common denominator approach of basel. that is absolutely a blind alley. >> so just to be clear, and i will never forget as long as i live to be called to a meeting in the leaders office, republican, democrat, chairman of the federal reserve, they informed us they were taking over aig the next morning. they told us that they believed they did not, that there would be a global financial collapse in days. that's pretty sobering. but if we had a repeat scenario, the federal reserve and the secretary of treasury would not have the ability to do what they did with aig. they have a new authority which allows them to liquidate a systemically risky enterprise. second question, if god forbid we had a second crisis, would the federal reserve operating with the treasury have the ability to guarantee money market funds as they did in 2008? to stop a run? >> that's a good. the first part of your description around liquidating -- the options for aig and the liquidation of systemically risky failing enterprises, i believe that was absolu

that's what basel tries to do. we've got to take the big leap to do a globalized dodd-frank. because without it, the kind of slipping around controls takes place across borders and you have an escape hatch for whatever regime is in place. >> i have to dash away. i apologize for that. it's been a great discussion. i hope we can really continue to wrestle with these issues of international monetary strategies and institutions. and i wanted to mention that it was a number of years ago that i remember an article in which warren buffett was replacing his investments to be denominated in foreign currencies because of his expectation that the dollar wasn't going to be the global currency. that is also an instrument or a change that would have an impact on the cost of our goods to the world. to the degree the dollar becomes weaker, making them a more affordable to the world. so that's another interesting conversation. i'm sorry i'm going to miss the sweden solution, but i look forward to hearing about it. thank you. >> thank you, senator merkley. senator thune, would you like to take

like any other game on wednesday swiss side basel host four time champions find meaning the german side will be without starving filibusters finds he has an ankle injury while they are all so short at the back gate of company they know that one bite and or missing. their arse where much the city striker collar status has apologised to the club following his self-imposed three month exile in argentina the argentina star returned to training last week after a lengthy fall out with the club following his refusal to warm up in their to champions league defeat by munich last september in a statement he said i wish to apologize sincerely and unreservedly to everybody i have let down and to whom my actions have caused offense but i was his teammates are preparing to host porto in the second leg of their you wrote believed last thirty two tie city are in with a good chance of making the last sixteen after winning the first like two one in portugal i believe is dangerous about this but that was tough on one. but we know that. we should play like that. zero zero. it's difficult game very difficul

food in the next thirteen games we're in the league twenty one of the champions league on wednesday basel stunning four time winners by in munich one nil in switzerland substitute valentijn stocker netted the winner four minutes from time to give the swiss side a slim advantage for the return leg in the last sixteen while elsewhere masai heaped more pressure on coach claudio ranieri grabbing an injury time went straight into milan one nil. home meanwhile back in russia league leaders in nato made an offer to take russia strike out and that i shall been on loan from arsenal for such a year old has failed to secure a starting place with a gun as this season and scored twice for the reserves against norwich this week arshavin spent eleven years with sinitta before his move to england however any deal would have to be settled by friday when the russian transfer window closes. and in the meantime the russian national beach football team have won the european cup adding to the world championship crown by one last year well it's been a rapid rise to the top for a nation hardly known for its beac

our face basel in the champions league round of sixteen. now to ice hockey and russia are without forward maksim would even as they take on finland in their first ever open air match in house thinking that they face each other in the opening game of the swedish leg of the euro hockey tour or the home nation is up against the czech republic in the light match of russia are both defending champions and overall leaders in this four nation competition. cycling now just days after alberto contador was stripped of his twenty ten total france title another former champion alric has also been handed a two year ban for doping offense the court of arbitration for sport has ruled that the retired german was linked to a doping probe in spain in two thousand and six the verdict means the thirty eight year old will also have his third place finish at the two thousand and five tour de france taken from him all right was the first german to triumph at the world's most famous cycling race back in one nine hundred ninety seven he also won the spanish welter

military buildup in the asia pacific michael rosco defense analyst at the basel bottom school of international studies says the visit is a chance for china to share its world view. twenty twelve is also very important in chinese political political system it's a year where you'll see a generational shift in chinese political system. being basically represents a fifth generations of new chinese leaders which will take the helm after. their base here he's basically opposed to become the true gentle party secretary you know these here and become china's future president and secondly he wants to give us a sneak preview of what he wants to basically show himself a little introduce himself to the u.s. there's a very little information on what he really what he's really more of you what he's views are so i believe there will be tensions covered but most of all it will be very important how do you generations of leaders especially in the trial will be able to manage the on domestic problems and how they will be able to communicate with the americans and vice versa. but the chinese vice president's vis

and condemn his form assigned to the team no defeat by a second in the german league and will face basel in the champions league round of sixteen. two winter sport now and the russian city of sochi will host the winter olympics and exactly two years time and its newly built by half long course has been described as one of the toughest in the world the course of the ana is set to host its first serious test event this weekend and the president of the russian biathlon union believes the athletes will find it tough when any help rockall of inspected the venue ahead of the russia cup and warned that height differences of up to sixty metres between peaks and troughs will make it exhausting all the climates will also take its toll. at the start of the road but it's the most difficult course in the world the temperature differential between the snow in the air is only four degrees celsius we don't have this anywhere else in the world for the ski lubricator for the people who prepare the students this is a huge problem with this big the competition all the more unpredictable. cities moving on to

elsewhere outside basel placed by in munich starting to feel that bastian schweinsteiger key to an ankle injury for time champions are also short of the facts which. brain but important ruled out. while in england's match this it is like a call of progress has apologised over reservedly to the club following his self-imposed three month eggs are native argentina twenty a lot of times of training last week after a lengthy fall out with the club following his alleged refusal to warm up in the two no champions league defeat at buying it last time but meanwhile city are preparing to host porto in the second leg of their europa league last thirty two time after winning the away like that so you want a billion is dangerous about his medical stuff for one. and i think you know that. we should play like a five star. zero zero i think that is the figure he would be very difficult. what we want what i've got a taste of the us he had stayed in during a training session and have it all to do when they're fifteen going when this run in england falling last week the first leg defeat there were allegat

that's what basel tries to do but it's been very inadequate. so one of these days we've got to take the big leap to do a globalized dodd-frank because without it the kind of slipping around, the controls that adam lerrick mentioned takes place across bored eshs and you have another escape hatch from what every american union takes place. >> i have to dash. i want to say it been a great discussion. i wanted to mention mr. lerrick it was a number of years ago i remember an article in which warren buffett was replacing his effort -- the threat out there could have profound consequences both enormous shocks but it's also an instrument or a change that would have an impact on the cost of our goods to the world. and to the degree the dollar becomes weaker, making them more affordable to the world. that's another interesting conversation, i'd love to have. i'm sorry i'm going to miss the sweden solution, but i look forward to hearing about it. thank you. >> thank you, senator merkley. >> senator thune, would you like -- >> i can ask a couple quick que

you've got basel 3 on the horizon. do you think we'll see dividends from the financials this year?focus on the financials from an income perspective, and i focus on the debts. i'm hiappy with the higher capital ratio. >> do you have an answer to mari maria's question? >> we've stayed away from the financials. they've run up in the u.s. the bank stocks in the u.s. until today were up 14%. in europe, they were up 25%. so they've run up. you've had five weeks in a row. the markets are due for a breather, please. it was overbought, if anything. one little message to every man watching this show, if your wife, girlfriend, daughter or mother says they don't want something for valentine's day, they don't mean it. >> they all agree with you apparently. all the traders on the floor there. >> you said buy those dividend payers. the dividend payers haven't worked out all that well. they've traded down, right? >> that's right. not this year. the materials, you all have pointed out here on the show, it's been materials and financials. it's been the high beta stocks. the defensive stocks have no

as you know, we've been an active player in all the basel and other discussions.at rarely works. it is a natural dynamic to want to grow and get bigger and bigger and bigger. this is the way humans work. and the way institutions are. so i'm a big, strong supporter, i should say, up front of the volcker rule. i do think that in essence, the five largest banks have a competitive advantage over the 6,000-plus other banks in the country and the cost of funding. i think it's not fair competition. and i think it would be best to downsize them. is my proposal likely to prevail? i doubt it. but i do think it would be a healthy thing to do. i think the one thing that might be useful is to bear in mind that taxpayer deposits anchor the confidence in banks in terms of their commercial traditional activity. >> right. >> and the issue is how you split off their nontraditional activity from the rest. >> thank you. great spending time with you. >> too long an answer. i apologize. >> that's okay. we got your window. we've got -- 9:00, another show. tha thanks very much, great to