now i'm going to there's a little capital banking system it's too complex you know the throws the basel process out the window which needs to be the u.s. should go its own way that is a disaster process so higher and simpler capital i mean it was ridiculous to thing that basel as you think this well i mean so unless demand for sovereign that oh absolutely but you know the fact is you know all you need to know about basel two is a capital system that tells you that greek debt is zero risk is a capital system bound to fail right you know we had to walk away from that of course and told you that fannie mae was very low risk too so again. to me a joke and it's a good thing the bronner walks away from that and it's a good thing that they're actually counting real capital like equity before the crisis we were allowed banks were allowed to deferred tax losses that were no way capital using risk weighted assets and that this is where i think there's a mixed bag because you know they set a floor and then they allow some risk weighting i think the risk weights are always inherently political it's

all you need to know about basel two is a capital system that tells you that greek debt is zero risk is the capital system bound to fail right you know it and we had to walk away from that of course and told you that fannie mae was very little risk too so again to be a joke and it's a good thing the bronner walks away from that and it's a good thing that they're actually counting real capital like equity before the crisis we were allowed banks were allowed to deferred tax losses that were no way capital using risk weighted assets and that you know this is where i think there's a mixed bag because you know they set a floor and then they allow some risk weighting i think the risk rates are always inherently political it's not by accident that. way that that large regulatory burden i actually would say to me the tradeoff should be more capital but simpler capital because if you look during the crisis and what market participants care about they did not care about which are to your one you know risk way to capital what they care about how much common equity do you have that's what the ma

basel 3 is a floor, not a ceiling. there are number of regulatory approaches that would considerably raise the cost of being a large bank. i think we have to see where that process ens in order to be able to answer the question whether we have fully solve the problem. it is certainly the objective to be able to say at the end that we have ended to be to fail and that we have eliminated any -- the fact that the market applies a subsidy, we have said that to be to fail is not our policy is a bit of a challenge. we demonstrated with the rules would put in place that make it costly to be a large bank in terms of the requirements that are put in place. the one issue out like to take issue with is replacing basel 3. for a lot of the world, it becomes an aspirational goal. we are trying to encourage the world to race to the top, not the bottom. basel 3 is working in a lot of other countries. when we look at the sources of financial risk, one of the things we worry about is the risk that is presented to the united states from

arbitrary things that the regulators and the banks come up with themselves because this is not the basel process is not transparent it's not even like you know a treaty with the senate ratifies it it's these bank regulators you know like in switzerland sit around with the big banks and they decide what's going to what's going to work i think it's a flawed process and i think it is that basel two to me was one of the top five contributors the financial crisis and the note of agreement because i agree that basel is flawed i like very clear standards i like in the law i like it baking eight percent fifteen percent that's about as clear as you can get and listen to take a liberal like share of brown and conservative like that are together on a bill that tells you this is a bill that has wide support it should pass something i think it says only have people across the aisle it is a wake up call to the regulator this so this was mark levine and mark calabria thank you very much for joining me thanks for having me. and it's time for the daily do i. is bob english our producer and great to be he

as the immanency banks and basel iii m. encouraged by the application of basel iii b. set community banks. as all business sole-source of financing community banks which were not responsible for bringing the economy to the brink during the financial crisis should not be held to the same standards as larger banks. i was pleased also to hear that during her testimony the basel iii with the a flaura not a ceiling for the international community. in my view the u.s. remains a competitive financial market for the necessary safeguards and actions of dodd-frank. i'm anxious to hear how the council of financial regulation both domestically and internationally not only by reducing and importing systemic importing systemic risk into the night stays for the effective implementation of basel iii but also in the cooperation that is key to implementing the fdic orderly liquidation authority under title ii of dodd-frank. i just want to talk about the revelations last week that the treasury inspector general's report. particular groups by the irs have grown and the ig report findings

you say you areç basel 3 compliant.ean you wont have to raise anymore capital, or will you be raising more capital, >> as of the end of the first quarter, we're about 9.8% on our swiss corps cash roish, which puts us close to the 10% we want to get to. we think we're very close on capital, and in fact, we think we'll be able to return significant amounts of capital to our shareholders over timeasz our business model continues to perform well. >> of course, these proposals make it tougher for a european bank, because it's forcing the european banks to hold more capital, competing with the u.s. banks. is this going to be a risk to earnings? >> i think, as you say, the different jurisdictions have proceeded at different paces and have different requirements around capital. it was very early and had very tough capital requirements that were put out a couple of years ago. being compliant with those capital regulations is the most important issue, because that allows us to be well-positioned for just about anything that happe

but you're seeing this shift over the last couple of months from the fdic and tom honag, basel's veryn the air. it hasn't been finalized, it's been proposed for a year, and now there's shifting going on about what basel's going to look like. so i think it's making investing in the group that much tougher, because of that regulatory uncertainty. brown/vitter is a sideshow. >> so it's the uncertainty? >> last week, i heard lloyd blankfein speak rather thoroughly about regulation. and he said, among other things, rather surprisingly to me, that regulation has always been here. and maybe he was just speaking because he knows who's listening, but he didn't feel that the level of regulation for specifically his company, goldman sachs, was all that much more onerous, franksly, yet, than it has been. so, paul, is that a legitimate point? >> it's not yet. >> you know, i think right now, it is a legitimate point, but i think what they're worried about is where they take it with the next step. the regulator's under a lot of political pressure from congressmen to tighten up the rules, tighten up

so, for example, i think it's a step forward that basel 3, unlike the previous basel agreements whichalmost entirely on capital now has a significant component on the liquidity management as well so that banks and others will be required to meet requirements for how much liquidity they hold so that they will not be able to sichl lie rely on access to the central bank. instead, they will have to be sure that they themselves are doing everything possible to have adequate liquidity in advance of any kind of problem. so that's the balance that we always have. the moral hazard versus the support for the system in a crisis, and finding the right balance is obviously something that's an ongoing discussion. okay. all right. everyone, let's thank chairman bernanke. [ applause ] >> that is the chairman of the federal reserve ben bernanke along with the chicago fed president evans. the erm cha an with the basic message for the markets saying that four years after the crisis, the banking sector still has vulnerabilities this trying to convince the market that the fed is, in fact, on the case, ste

basel tawfiq youssef. ammar mohamed suahil zado. in tanzania, daudi mwangosi. in thailand. in 1937 in china, sando sngre. in 1969 in vietnam, san paul. in 1983 in the united kingdom, philip geddfes. in the united states, barton edward smith. in 1993 in south africa, jarlath dolan. in 2001 in ireland, austin finn. may we have a moment of silence for these brave men and women. thank you very much. >> this concludes our ceremony this morning. we thank you all very much for joining us today. richard, we thank you especially for your gracious and inspiring words. we ask that you please allow a few moments for the family members to place roses in front of the memorial in honor of their loved ones. thank you. >> we are going to hold an facts on the next "washington journal", the political fallout from last week's news and how it could affect discussions on immigration reform. we will talk with jennifer bender a from -- bendery from "the huffington post." and discussion on the recent pentagon report on sexual assault in the military with the cofounder of the service women's action

basel tawfiq youssef. ammar mohamed suahil zado. in tanzania, daudi mwangosi. in thailand. in 1937 in china, sando sngre. in 1969 in vietnam, san paul. in 1983 in the united kingdom, philip geddfes. in the united states, barton edward smith. in 1993 in south africa, jarlath dolan. in 2001 in ireland, austin finn. may we have a moment of silence for these brave men and women. >> may we have a moment of silence for these brave men? thank you very much. >> this concludes our ceremony this morning. we thank you all very much for joining us today. richard, we thank you especially for your gracious and inspiring words. we ask now that you allow a few moments for the family members to place a rose is in front of the memorial in honor of their loved ones. thank you. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2013] of --t a discovery discussion of media coverage of war. and an examination of the u.s. and south korean's options in dealing with north korea. on the next "washington journal ," the political fallout from the

do you share the concern of implementing basel iii requirements? >> congressman, we are concerned with basel and with other areas of implementation of dodd-frank and other financial rules that we do what we need to do to protect the u.s. economy from the kind of risk that we never want to see again but also to work with our international partners to where we can harmonize standards and reach a level so there's a competitive level playing field. we have made good progress in the g-20. we're working with our g-8 partners. i've already been in many meetings with my counterparts at finance ministry level and with central bankers. it's going to be a complicated undertaking. we have different legal systems, different standards. the thing we have to be clear about is our first obligation is to make sure that we make the u.s. financial system sound. and then work with others to bring their standard tire. >> the time of the gentleman is expired. the gentleman from florida. >> thank you, mr. chairman. mr. secretary, how long was left on the term of the commi

t right now, i think basel 3 is the story more than dodd prnk frank. i think that has been a drag on the economy. i can't tell you how much. a modest drag. second order. people spend a lot of time trying to quantify it. >> i agree. i have no idea what the quantitative effect might be. but i would think it would be yet another factor tending to slow innovation and slow investment. >> one last question in here. it has to do, i think you touched on it already. the brown proposaling banks. what do you make of that capital requirement for banks? does it make sense? you talk about capital being the ultimate protection. >> just to say i think too big to fail is a genuine issue. i commend the senators for trying to make a practical proposal out of it. but what we really care about is not just too big, but too systemic to fail. it is not clear a direct sized number is the right number. i hate to complicate it. i think we're going to have to work harder to get the right response pmp >> seeps to me if we're going to con -- seems to me if we're going to constrict

not a creation of wealth and in the derivative area with fannie and freddie with a moral hazard of basel and so forth we created an unstable system that would be stabilizing capitalism but you don't blame capitalism for the fact that we've destroyed the center structures that with effectively socialize the risk that's not got something going to grab and socialize with george wallace on. none of this is that although this is called comfort if you're unemployed isn't it well that's absolutely right and i'm also a little. strange when people talk about this idea that there's some pure capitalism because really capitalism from its inception had always been very much a state run business i mean it's basically from you know you starting from going back to the american history. of the state has always been very much involved in helping out capitalism and even before the recent bailout i mean the great. american industrial success of the computer industry wouldn't exist that had it not been for government it was a government investment in the mainframe computers that gave us the computer industr

quarter with the game tied at thirty five apiece says come put together a thirteen to zero run but basel rallied in the fourth draw level and with thirty six seconds left one titles novato sank a three pointer to put them a point ahead but in a frenzied finale aaron jackson smashed the lead back that is and massa missed the chance to win with the last attempt of the game to ensure messina's men took the european bronze. thank you. and in the final defending champions olympiakos proved to be the comeback kings once again for the second year in a row they fought back from a double digit deficit and beat a time champions real madrid one hundred eighty eight the spanish side made an explosive start going twenty seven ten up after ten minutes but in india because cut that back to four points by the break and the league's m.v.p. . then led the charge with twenty one points all in the second half as the greek side went on to clinch their third year early crown and become only the third team to win back to back finals michael genco party. now on to cycling where maxine waters on more from the gh

news just crossing saying the big german banks need additional capital for full implementation of basellined from 42 billion euros to 32 billion. so the amount of money needed is a little less. the organization says the big german banks regulatory core capital ratio res stable and are between 10% and 18%. that is the latest crossing from bafin. interesting, last week, we were talking to james bullard from the fed here on cnbc and talking about -- he was talking about too much regulation in the banking system and this compressing what we're seeing in terms of the innovation for some of these banks and many have concerns about basel 3 and this is reflected by the boe, as well. that's the latest, anyway, just crossing. let me bring you up to speed across european markets today. we are seeing a fair amount of green across the chart. the ftse has been in catch up mode. it has closed yesterday for a public holiday. 1.6% is the size of the pop. the german market there, 1.2% to the side up. the dax tracking around these fresh highs. the cac building 1.4%. the periphery for the second day in a r

and the second is the implementation of basel iii.h of these changes in the mortgage market are in essence a tetonic shift that should help to draw private capital into the market and redwood trust is the tip of that spear. the second reason we are still bullish on the name is really the type of asset that they own. if you thhnk about a typical mortgage there are two pieces of risk and return. those two pieces tend to be inversely correlated to one another. that is credit risk and interest rate risk. in an economy that is improving you tend to see the credit risk outperform the interest rate risk and redwood trust's portfolio is broadly speaking predominantly a credit risk portfolio. liz: this is perfect segue what happened today with fed chief ben bernanke. you saw what the 10-year yield did. it started to move higher. we dop a parently at least for the moment and maybe when he starts to ease up on what the easing has been, so tapering the easing, we might see some interest rate risk. how will that affect the real estate industry but

do you share the concern of implementing basel iii requirements?congressman, we are concerned with basel and with other areas of implementation of dodd-frank and other financial rules that we do what we need to do to protect the u.s. economy from the kind of risk that we never want to see again but also to work with our international partners to where we can harmonize standards and reach a level so there's a competitive level playing field. we have made good progress in the g-20. we're working with our g-8 partners. i've already been in many meetings with my counterparts at finance ministry level and with central bankers. it's going to be a complicated undertaking. we have different legal systems, different standards. the thing we have to be clear about is our first obligation is to make sure that we make the u.s. financial system sound. and then work with others to bring their standard tire. >> the time of the gentleman is expired. the gentleman from florida. >> thank you, mr. chairman. mr. secretary, how long was left on the term of the commissio

. >> jonathan, emily basel wrote in "slate" last month about this she said every time a president setsst solid science, he naks easier for the next administration to do the same. crying wolf about child safety on this is especially bad in the realm of teen sex, where adult fears can block all kinds of sensible education and birth control efforts. what do you make of that? >> i think she's right. it's wrong on the policy merits, it seems wrong politically. i think the people that are worried about offending are not part of their natural base. so as a raw political calculation, it's kind of puzzling. i have yet to see any keeind of plausible explanation of what they're thinking. >> the anti-science morkt, frank, that's largely been the purview of the right. which is anti-science in many things. women's reproductive health is one area where there's weird, inaccurate science trotted out by sometimes candidates running for congressional office and sometimes by just weird tinfoil hatted conspiracy theorists. i do think it's damaging to the larger sort of listening to the science community an

inevitable that regulators will adopt more measures that go beyond what they are proposing in europe, the basel the biggest banks have huge piles of cash in the event of another financial armageddon. while i do not believe the push for this kind of capital stockpile and other regulations will in fact result in the major banks splitting up right now, it is having a major impact nonetheless. the uncertainty, the confusion. we don't even know which companies will be deemed systemically important to the economy, which would totally change the terms for those banks and how they would need to operate. all of these open questions are causing the banks to sit on money, reluctant to hire, reluctant to lend, unable to invest in the future, and hire workers. i would love to hear some of the positives from regulators as opposed to the constant drumbeat of attacks. banks are not angels, but they are not the devils they are being made out to be. they remain a vital part of what makes capitalism the best system in the history of the world. downer but not by much. the dow jones industrial average and s&p 500 p

it was, you know, one of these complex situations set up by this committee in basel, switzerland. and, you know, very, you know, byzantine. and it wasn't readily available capital. there wasn't enough of it and it wasn't liquid. and so the sherrod brown and david vitter bill is an idea of how to have that pile of cash available, ready if there's a problem. well, banks don't like this because they want to deploy that cash. they want to earn money on that cash. they want to, you know, take risks with that cash. and so of course they object to that idea. >> bill moyers: do you think there's any chance that an intelligent-sounding, seeming bill, like the sherrod brown and david vitter proposal has a chance of competing against the army of lobbyists that jamie dimon and others can send down to washington? >> gretchen morgenson: it is a formidable, formidable army. i grant you that. i just hope that people on main street will rise up and support this idea, support this bill. otherwise, we are simply going to have another crisis far sooner than we would otherwise. i mean-- >> bill moyers

but wall street's balance sheet, because of dodd/frank, because of the volcker rule, because of baself people head to the commits, the bid is not there, the little guy is going to get hurt. >> speaking of heading for the exits -- i'm sorry, scott, go ahead. >> i was just going to say, look, if that's the debate we're having now, what time frame are we realistically talking about? >> i think larry's making a good point about the concerns that there's a lot of leverage being built up in the system, even if it's not directly on the books at the brokered dealers. and the truth is that the fed knows this and they think about this and they worry about this. people like jeremy stein, a fed governor, has talked about this. janet yellin, who may be the next fed chairman, when she talks about reasons she would like to pull back on qe, the first thing she mentions is financial speculation. and so, as the fed starts to pull back, and i think that will start in the second half of the year, that will be a major reason why. but kelly, i want to underline something here. the fed has two exits, not on

this is something that is already for example, there will be supplements of our basel three capital rulesrcharges. discretion in terms of the leverage ratios that we apply. the stress testing. said sell whole new set of capital standards. we are looking at the requirement that bank holding companies have a certain amount of senior debt which could be used to protect taxpayers in other counterparties in a wind down. so we already have a number of tools that we will be applying and could apply to even a greater extent to make sure that a large institution is very adequately capitalized. multiple benefits, both in making them safer, but also in giving them a strong incentive to reduce their size, complexity , interconnectedness if it is not justified by the fundamental economic proposition . >> thank you. that was very thorough response. more questions than we have time for. one more question yesterday. we have a discussion about money market firms. the brokers, the importance of liquidity, clearing houses as well, periodically the suggestion is made by many that while witnessing -- if the f

support we are doing a lot of things which i don't have time to go through through dodd-frank through basel iii and other authorities to move in the right direction for the dressing too big to fail and as i said if we don't feel after some additional work that we have addressed the problem i would be supportive of additional steps. the best direction is probably requiring the largest firms to hold more capital proportionally and that would force them to be safer, to have more level playing field and if their economic returns didn't justify the higher capital costs to induce them to break themselves up. >> the structure of the fed? >> i am open to discussing those with you. i just want to assure you as strongly as i can that the primary role of board members is first to give us market insight, business inside, let us know what is going on in the economy and hold lot operation issues but there is a complete and utterly in permeable ball between the board members and any supervisory matter and i assure you there is no conflict. that being said i can see why you might have different people repr

carolin, many regulators are issuing concerns about basel iii and much this is going to squeeze the bankingen they're being told to lend up more to small and medium-sized enterprises. >> yes, absolutely, that is one of the big concerns out there. the other concern is whether the implementation is actually even around the world. i mean, we know that some people say the u.s. banks are actually dragging their feet. i wondered whether this puts german banks at a disadvantage. i put that question to a board member at the bundesbank. he told me, no, it doesn't really put them at a disadvantage. he also said that german banks' capital levels are very good. remember that deutsche bank and commerce bank, between the two of them, have announced very big capital measures to the tune of 5 billion euros just over the last couple months. so, these concerns are now allaying a little bit here. we also talked about the concerns of what the low interest rate environment is having in terms of risk-taking. but mr. damlet said that there is no bubble out there just yet. >> we don't see real patrons for a sort o

we haven't settled dodd/frank, basel 3. you're not getting credit to first time home buyers.nge"er until you get credit to the first time buyer. and the mortgage credit market is 95% controlled by the government. that's always led to rationing in every instance in the history of this country. the government takes something over, it's rationing. >> diana will have more through the rest of the day. we'll talk more about it. when we come back, a disruptor best-selling books with celebrity they're ators. audible is the alarmest producer and seller of spoken word entertainment. the ceo donald katz will join us after this. [ male announcer ] with free package pickup from the united states postal service a budding artist can ship like a big business. just go online to pay, print and have your packages picked up for free. we'll do the rest. ♪ this is no time for lollygaggin', lad. the chickweed and the dandelions are wreakin' mad havoc! now's the time to send in the scotts turf builder plus 2, man! it kills weeds while it feeds and strengthens your grass. feed your lawn. feed it! it

basel tawfiq youssef. ammar mohamed suahil zado. in tanzania, daudi mwangosi. in thailand. in 1937 in china, sando sngre. in 1969 in vietnam, san paul. in 1983 in the united kingdom, philip geddfes. in the united states, barton edward smith. in 1993 in south africa, charlotte -- jarlath dolan. in 2001 in ireland, austin finn. may we have a moment of silence for these brave men and women. thank you very much. >> this concludes our ceremony this morning. we thank you all very much for joining us today. richard, we thank you especially for your gracious and inspiring words. we ask that you please allow a few moments for the family members to place roses in front of the memorial in honor of their loved ones. thank you. >> tonight, a news coverage, obama and david cameron. they discussed the syrian civil war. nswers questions about the benghazi attacks. this is that 8:00 eastern on c- span. preventission is to distracted driving accidents. we have our product that works similar to a breathalyzer. literally docked and locked in to start the car. drop our campaign to education aga

do you share the concern of implementing basel iii requirements?congressman, we are concerned with other areas of implementation of dodd-frank and other financial rules that we do what we need to do to protect the u.s. economy from the kind of risk that we never want to see again but also to work with our international partners to where we can harmonize standards and reach a level so there's a competitive level playing field. we have made good progress in the g-20. we're working with our g-8 partners. i've already been in many meetings with my counterparts at finance ministry level and with central bankers. it's going to be a complicated undertaking. we have different legal systems, different standards. the thing we have to be clear about is our first obligation is to make sure that we make the u.s. financial system sound. and then work with others to bring their standard tire. >> the time of the gentleman is expired. the gentleman from florida. >> thank you, mr. chairman. mr. secretary, how long was left on the term of the commissioner was a wreck

i certainly agree basel two and 793 can be very challenging. >> in a final question for your panelists here? >> i think it's been a great panel. we can talk about these things for hours and hours. we're already over time. they they are a common ad, adam comic thank you for. >> and, thank you as well. [applause] >> the bloomberg summit continues at the discussion about the national debt. chris van hollen was joined at the head of the government accountability office and john podesta, chair of the center for american progress. it is moderated by bloomberg columnist, >> first of all, it's nice to be here. it is tough for us to talk about the deficit and does these days than it was years ago on ice cover and ronald reagan. they asked president reagan one time if they worried about the size of a huge debt in a set know i figure it's big enough to take care of itself. unfortunately we don't have that luxury today. when i first came to washington we measures candles. and then a member of your institution, powerful chairman result was a tax or it ended up running around with a stripper named f

take losses and finally with a new ruling called crd4 capital requirements directive four, part of basel ago, we are starting to see movement. regulators are saying you have time to earn back capital and you have now a scorecard so you can run the math on how you need to be and let's go. we've seen an enormous uptick in activity and it's different from our traditional business of just corp at loans and bonds. it's all sorts of assets, but the activity is picking up and over half of our investments in our credit strategies are now overseas. >> they are in europe. >> dominated by europe and this newfound willingness on the part of the banks to part with some of these assets. >> is a large part of it. >> give me some sense here. we're talking the spanish bank that is saying we have to acknowledge this is worth 5 cents on the dollar? >> that's a perfect example. near the end of the year, we bought a portfolio from a european bank at 3 cents on the dollar. >> what was it? >> it was a bunch of consumer loans, unsecured consumer loans. so you took a loan or you own a business or you guaranteed