they 78% rule and we've go got o basel i comment to entry. again, that shows you, i don't go into the technicalities of the basel agreements in the book. it's not about that. but it's just, what's interesting about that it shows you how banks reinvents itself, makes itself essential again and again and again. but also committee has got to be based somewhere. it's kind of unthinkable it would be anywhere else. >> tell us about the presence and the future, obviously there are transparency issues, accountability issues for banks, mostly i think nobody has ever heard of the if nobody has ever heard of it how likely is it a we're going to see enough pressure to make these things change? and i say that as historian, some growing dntent that detroit got in europe and the pauses of the ecb and the imf which interestingly, has lately been sort of pressing for austerity less than some of the other organizations. how likely is that pressure to get to the point where we are likely to see some real changes? >> yes. i think clearly this is a general sense

i am thinking back to basel one and now we are looking at the final basel three. it includes a risk weighting of 20% for debt issued by fannie mae and freddie mac. the rule includes a risk weighting of 04 unconditional debt issued by ireland. they have no country risk classification. both of these are, in my memory, identical to the risk weightings of basel one. my concern is that we should have learned a few things about those metrics given the consequences of the clear failure. yet, here we have the cord looking an awful lot like this one. given what we have experienced, the failure of the gse's, the propping up of many here. economies can't do you think that these accurately reflect the accurate risk posed by these exposures? >> they are international. you know, international agreements. each country can take that floor and do whatever it wants, you know, about that floor. we would not allow a u.s. bank to hold greek debt at zero weight. in terms of gse's, they have not created any loss whatsoever. they have set the taxpayer, but not the holders of those securi

larue incorporates requirements consistent with the basel iii and its established but the basel committeeg supervision with certain provisions of the dodd-frank act including minimum capital requirements for institutional and companies and requirements that all federal agencies remove references to credit ratings from the regulations. the npr, the board is considering refinements to alternative standards of credit worthiness to credit ratings contains in the final rule. the agency final will applies to all banks, savings associations, bank holding companies not subject to the board, small bank holding company policy statements and certain savings and loans holding companies. savings-and-loan holding companies with substantial insurance activities raise significant concerns about appropriateness of the proposed regulatory capital framework for their business model. in order to provide the board more time to consider issues raised by, enters the final rule does not apply to savings and loan holding companies with 25% of assets held in regulated insurance underwriting companies. in addition

nearly complete the basel three implementation and the role making sense across the major basel committee member companies -- countries, because other jurisdictions have limited their roles. -- rules. they will take effect on january 1, 2014, so we will be moving to get started with the phase in periods. there is a couple areas where areeuropean final rules not in line with the basel standards. a couple we have heard about from commenters are treating of credit risk and treatment -- risk weight on sovereign debt. the basel committee has a process that involves regulatory capital, assessment across countries, so both the u.s. and european union will be going through that process now that our final roles ules are final. we will see what the committee says about our rules and the european rules. jersey should and will reviewed for the comparability of their rules against the basel standard. >> think you. i want to follow up on the question and april's answer. particularly with respect to the residential mortgages. as you explained him of the is not making any change in residential mortgage r

that will nearly complete the basel three implementation and the rule-making sense across the major basel committee member countries, because other jurisdictions have limited their rules. they will take effect on january 1, 2014, so we will be moving to get started with the phase-in periods. there is a couple areas where the european final rules are not in line with the basel standards. a couple we have heard about from commenters are treatment of credit risk and treatment -- risk weight on sovereign debt. the basel committee has a process that involves regulatory capital, comparability of assessment across countries, so both the u.s. and european union will be going through that process now that our final rules are final. we will see what the committee says about our rules and the european rules. these will be reviewed for the comparability of their rules against the basel standard. >> thank you. i want to follow up on the question and april's answer, particularly with respect to the residential mortgages. as you explained, the final rule is not making any change in current residential m

undercurrent basel three proposals within the next five years banks will have to hold equity equal to three percent of assets this means that for every one dollar of capital a bank can basically loan or gamble on derivatives thirty three times that amount earlier i spoke with robin barry a former investment banker with credit suisse and a corporate finance executive and i asked her about leverage during the financial crisis and the expansion of the derivatives market. all of the banks got in trouble in the financial crisis because of the bets they place on the mortgage market and the securitization that happened from that we saw just last year j.p. morgan have a trading loss that they first. started as a loss of you know some they thought that their loss was two billion then it became six billion. and that's just one example of something that can't be valued if they don't know their total risk which is hard for for even the banks to know at any given time and we have capital management stevie cohen's front for him is facing

i'm thinking back to basel one and now we're looking at the final basel three.e mae and freddie mac and the rule includes a risk weighting of zero for unconditional debt issued by ireland, by portugal, by spain, by other oecd countries with no country risk classification. both of these risk weightings are in my memory identical to the risk weightings under the original basel one. so my concern is that we should have learned a few things about those metrics given the consequences of the clear failure, and yet here we have the accord of 1988 looking an awful lot like this particular accord. given what we have experienced, the failure of the gses, the propping up of many european economies, do you think these weightings accurately reflect the actual risk posed by these exposures? >> so basel three and all basel agreements are international agreements, and each country can take that floor and do whatever it wants, you know, above that floor. we would not allow a u.s. bank to hold greek debt at zero weight, i assure you. in terms of gses, the gse mortgage-backed secu

lenders have doubled their capital levels as a result, including the new basel three target. yet, where are the ill effects? the best of them continue to set new profit records with every earning season, warnings of kalimba -- of calamity look more and more holidalow. the debate reminds a that when we think about costs, we as policymakers, when we think of costs and benefits, industry only wants us to think about costs to them. steel companies dump waste into our rivers, and then they argue it will be costly to clean it up.that entire human costs to the minors and children who get sick. those who believe in the society with rules understand auto safety might cost car companies more in seatbelts and other safety features, but these save the lives. the same thing with banking regulation.it might cause managers a little bit more and smaller bonuses and maybe even dividends, but it will help prevent a repeat of what we had five years ago where the cost obviously shifted to the broad public, and retirement savings and lost jobs, and every way imaginable. if these are a costs of a

in particular, basel ii and basel iii. we need to look at what will ensure security in the country without unduly affecting the flow of credit. that's a judgment which we are to make by law and which we will make. i think it is important to note there is an interactive quality to this. even since the publication of our proposed gregg, i have had calls from my counterparts from around the world saying, that's interesting. tell me the reasoning on this. tell me why you think 3% is inadequate? it is tapping into a latent concern that i think exists among a lot of other regulators that as i said, the leverage ratio, basel iii were affected significantly and in other cases perhaps lower than optimal, and i think there is interest that apeople are showing. the other thing is, i think capital is a good area to set minimum requirements. that's why armitrage has been almost instan tainous. that's why we have worked hard to marginiz derivatives. i don't think that is necessary in capital areas. but it is important in part because th

from basel one -- the basel agreements have made sure that active banks have minimum capital levels in order to, again, provide minimal assurances to all of us around the world about the safety and soundness of financial institutions whose activities have substantial cross-border effects. indeed, if you look at basel ii, which as you know i have many concerns about, particularly the pillar one part of it. but pillar two, the supervisory part of basel ii which is largely about saying there ought to be higher capital requirements in appropriate circumstances and there's nothing that says that national authorities cannot make a judgment that they want more. indeed, i think we've seen in switzerland and in the u.k. a good bit of debate and in some respects action in increasing capital requirements above what the basel levels would be. so for us in the united states, i think in the first instance, those of us who are regulators, those of us who are charged with financial stability of the united states need to make the judgment as to what levels of capital will most assure financial stabilit

this hilsenrath article that came out a couple months ago it says a dozen central bankers meet in basel about six times per year is it possible we have global currency cooperation. well. certainly i mean they've been meeting in basel six to ten times a year since the one nine hundred thirty s. so it was a graph is right but there's nothing new about that and that is the major central banks membership changes a little bit because they obviously now they've added china and some other players but you know bernanke has a theory on this you know my my book currency wars went through the history of currency wars and says we're in a currency war today which we are which is basically cheapening our currency to gain trading advantage against your trading partners and also to import inflation from them and export your deflation abroad so that's what the currency wars are all about now bernanke has this theory he says if japan the u.k. europe and the united states all ease at the same time that's not a currency war because if you're all easing in theory the comparative advantage in the terms of tr

with the regulators as i said with the basel iii with the leverage ratios significantly that lower that might have been optimal. that people are showing with additional measures. final thing i would say i think capital is central. capital is said good area to start to set minimum requirements for you don't need to harmonize capital but you do with margins because the orbit dryish on that that is why working so hard internationally to harmonize what would be applied to the derivatives. i don't think that is necessary in the capital area but also because the position of any firm depends on the competitive position position, a capital requirements, accounting rules, a tax law, other government policies, a structural limitations so that position is the net effect of all those policies in the year still in a period of flux how much more do we want to do in the u.k. and the continuing debates to see the combination of all measures with one another. >> governor, regarding the leveraged leases -- ratio that came out last week some cities there we're engaged in risk taking some of our like the t

europe has just put in place its directive to include basel iii.t's important to adhere to the underlying basel risk related assets consistently across borders. progress has been made also in cross-border resolution frameworks with the aim of helping ensure taxpayers never again have to bear the cost of the magnitude we saw. the fsb has put forward the attributes for effective resolution regimes which the united states is art implemented. the fdic's single point of entry approach will allow subsidiaries have failed globally systemically important banks to operate worldwide without interruption. europe is making progress through its bank recover and resolution directive. which sets forth a proposed deposit credit of hierarchy regime plus associated financing in brussels just proposed a single resolution mechanism for the euro area. so, another key aspect of the agenda that we have been discussing a place as the crisis is otc derivatives. the cftc has designated credit default an interest rate swaps. they register some 75 swap dealers and launched tr

the politicians wanted based in russell's or strasbourg, but it was based in basel in the dis which served as a secretary. so you can see, again and again the bankers making itself absolutely the center point and reid evolving and reinventing itself. each in a clever and nimble institution. in one of the key people was alexandria. known as the father of the euro. his day job, general manager of the dis. and after the committee passed its -- it was agreed in the plan was going forward this set of something called the european monetary institute which was based, of course, at the dis. and then a stay there until the end of 1994. became the european central-bank which is another international bank protected by international treaty which is also not very transparent or influential. so you can see through the decades, german reparations finished in 1932. it reinvents itself. the second world war. most people but it should have been closed down. actually, you can't close down. you need is for the post war global economy. the euro. the dis is important for two things. every two months just has be

now we are going to play out with work from a german surrealist artist ernst that is being shown in baselyou can follow us on our social networks. thanks for company. >>> welcome to "newsline." it's friday, july 26th. i'm catherine kobayashi in tokyo. >>> investigators are trying to determine the cause of spain's worst rail accident in decades. at least 80 people were killed after the train rounded a curve and jumped off of the tracks. 140 others were injured. police suspect the driver had pished the train well above the speed limit.

they also they do that is the world's most exclusive dinner party on the 18th floor and basel switching. it's the most intimate opportunity for the links of the bakers the world exchange ideas. they eat delicious food, drink good burgundy but the joke is they call it, very good wine. one central banker told me sometimes in crisis i feel like we see each other more than we see our wives. wives. so with us and the common person how to the deployment in 2008? here's one aspect i don't think people pay much attention to. it's called swap life. the basic idea is simple. european banks had all these euros dollar in him it assets. at deutsche bank and german and french and dutch banks have spent all this money to buy u.s. dollar-denominated assets by the ecb cannot lend them dollars in a pinch. when the markets shut down, when they couldn't get dollars on a private markets they had no way of getting the dollars they need. so the ecb and the federal reserve and the swiss national bank in the bank of england and canada came up with this arrangement where if you're the ecb and you have your banks

so obviously with this, as with basel iii and volcker and everything else we go out for comment but i think you also can see in the proposal that it's a very strong sense in the agencies that the 3% ratio was just inadequate and that's why we made a proposal for something more. >> what do you make of arguments of banks covered by this, the largest financial institutions, because it will limit the flow of credit and liquidity and, taking into account, going too far to regulate banks without taking into account the impact on the economy and on the accessibility of credit for the banks, do you think there's a legitimate argument there this particular leverage ratio change could be damaging to the economy in some way? >> we'll be interested as always in people's comments, comments from all directions and people can make observations that they think are salient with respect to the impact on the economy. i guess i would say more generally that there are at least two considerations here. one in the first instance we do have to look, getting back to your first question, we do have to look at

in a unanimous vote, the fed approved new rules under the so-called basell-3 accord. the stricter standards are meant to alleviate the potential for another worldwide financial meltdown. the majority of banks will need to hold up to 7% of assets in high-quality capital, up from 2%. for 100 banks, it will require raising $4.5 billion by 2019. tech world's twins are making a play in digital currency. the winklevoss twins, who are best known for suing mark zuckerberg for facebook's rights, are proposing an ipo for a "bitcoin" etf. it would give investors exposure to the growing electronic currency, although some investors claim bitcoins are too high-risk and unregulated. zynga investors are counting on the new ceo to become a game- changer for the social media company, but analysts say don't bet on it. zynga founder mark pincus is stepping down to make way for don mattrick, who was in charge of xbox business operations at microsoft. "i'm not sure there's a skill- set match with what zynga needs to do. on the other hand, the path they're on is clearly suicidal, so they ne

certainly i mean they have a big meeting in basel six to ten times a year since the one nine hundred thirty s. so it was a graph is right but there's nothing new about that and that is the major central banks membership changes a little bit because they obviously now they've added china and some other players but you know bernanke has a theory on this you know my my book currency wars went through the history of currency wars and says we're in a currency war today which we are which is basically cheapening our currency to gain trading advantage against your trading partners and also to import inflation from them and export your deflation abroad so that's what the currency wars are all about now bernanke has this theory he says if japan the u.k. europe and the united states all ease at the same time that's not a currency war because if you're all easing in theory the comparative advantage in the terms of trade and of course rates shouldn't change very much because everyone's printing a lot of money and so you get the benefit of the stimulus without the costs of the currency war and th

your comment please on how the forums in the basel iii banking reform would have affected the eventsnd the future of those financial wizard one of thes, talking specifically about brought about -- thank you. >> i am not sure the transparency of basel iii would have affected these, not sure how that would have affected it to be honest with you. >> we talked a lot about raja gupta. i am curious to hear from you about raj rajaratnam. and his motivations and the dynamic of him and his family and raj rajaratnam is facing prosecution. what do you think is going to happen? >> raj rajaratnam to use his own words would say i am a rogue. i am a rogue. and i think that is what he was. he liked to push the envelope wherever he could. he liked to play people. there is this episode in the relationship, at the end of 2006, arranged high interest loan, and part of a consortium to buy a bank in south india. the loan isn't paid back in time, and raj rajaratnam send an e-mail saying money doesn't arrive i am canceling all further lungees regarding the capital which is south asian money manager raja was

its basel iii level within reach.r, its basel level above the required level, too. for the quarter where the banks are a bellwether of the economy, at least in hind seat there's nothing to fear, but there's also few things to cheer. back to you. >> a lot of questions posed to dimon on that front. kayla tausche over at hq. >>> one of the more colorful characters to emerge goes on trial monday. mary thompson has a preview of the s.e.c.'s case against the man known as fabulous fab. hey, mary. >> hey there, carl. now a doctoral candidate at the university of chicago, he grabbed the attention of wall street, the government and a nation still reeling from the financial crisis back in 2010. a former vice president of structured prurkts at goldman sachs, the now 34-year-old tourre stands accused of misleading investors in a synthetic clal ralized debt obligation by allegedly misrepresenting the role played by john paulsen's hedge fund. in an e-mail to a friend, tourre famously described the target for the securities and his r

under current basel three proposals within the next five years banks will have to hold equity equal to three percent of assets this means that for every one dollar of capital a bank can basically loan or gamble on derivatives thirty three times that amount earlier i spoke with robin barry a former investment banker with crowd.

just talk the fed announced it's requiring banks to hold more capital and reduce leverage all part of basel banking regulations and the word from our fred chairman above is that banks need to lower leverage later period and boring will break down hypothecation and explain where all this leverage comes from now we know the banks are borrowing on the cheap and so is uncle sam banks to them so what happens when the thirty year downtrend in interest rate reverses we'll be talking to karl denninger about this in just a bit heading east we see chinese short term money markets are under incredible stress there yield curve is flashing recession if not depression just in underhill will dig into the nuts and bolts of this two thousand and eight ish development finally we'd be remiss here of prime interest if we didn't mention the winklevoss there is a winkle by twins but they're creating a bit quaint for us so that yes it means a bit coins i.p.o. .

under current basel three proposals within the next five years banks will have to hold equity equal to three percent of assets this means that for every one dollar of capital a bank can basically loan or gamble on derivatives thirty three times that amount earlier i spoke with robin barry a former investment banker with credit suisse and a corporate finance executive and i asked her about leverage during the financial crisis and the expansion of the derivatives market. all of the banks got in trouble in financial crisis because of the bets they place in the mortgage market and the securities ation that happened from that we saw just last year j.p. morgan have a trading loss that they first could alone and i went up. and started as a loss of you know some they thought that their loss was two billion and then it became six billion. and that's just one example of something that can't be valued if they don't know their total risk. which is hard for for even the banks to know at any given time and we have capital management stevie cohen's for all for him is facing charges allegations of ins

just talk the fed announced it's requiring banks to hold more capital and reduce leverage all part of basel banking regulations and the word from our fred chairman above is that banks need to lower leverage later period and boring will break down hypothecation and explain where all this leverage comes from now we know the banks are borrowing on the cheap and so is uncle sam banks to them so what happens when the thirty year downtrend in interest rate reverses we'll be talking to karl denninger about this in just a bit heading east we see chinese short term funding markets are under incredible stress there yield curve is flashing recession if not depression justin underhill will dig into the nuts and bolts of this two thousand and eight ish development finally we'd be remiss here of prime interest if we didn't mention the winklevoss or is that winkle by twins but they're creating a bit quaint for us so that yes it means a bit coins i.p.o. soon you'll be able to short the coins side of the apocalypse probably not but we're sure this has j.p. morgan's attention so without further ado here's wh

we implemented basel 3 including new requirements to bolster capital. as losses mounted during the financial crisis the woefully inadequate capital cousins at banks and other nearly -- nearly brought our entire economy to a halt. i also appreciate that the bank regulators have taken a commonsense approach for which i have strongly advocated, related to community banks, including the treatment of residential mortgages. i applaud the banking regulators for finalizing these critical rules, which along with the other dodd-frank reforms, will create the conditions for robust and resilient financial sector. legislation before us today will conduct a stud eye of the potential effects of any differences between the u.s. and other jurisdictions implementation of one aspect of the basel 3 accords. the credit valueiation adjustment requirement related to derivative transactions. the countries agreed that banks should hold capital against the possibility that their counterparties be it an airline or other bank would default. however, despite agreeing to do so under

so, for example, our basel three adjusted ratio is 9%, which is very, very strong.s the kind of minimum of 7%. so we have 2% over, you know what even as is phased in, the expected level would be. so we're in a very strong capital position. i think most of the regionals will be -- most of the basel 3 impact son the largest wall street institutions who in many cases had lower capital existing standards, and i'll have them to raised to meet the new standards. >> kelly king, thank you for joining us, hope to see you in person on set. >> thanks, got to say happy birthday to becky. happy birthday, becky. >> thank you very much, kelly. >> every guest has to make sure they sign off. >> someone said it is your anniversary too. i think it was earlier. >> a month or two ago, we'll take what we can get. now you're trying to deflect. >> what sign are you? >> cancer. i'm a crab. >> you're a feces, right? >> i'm a pisces. >> a pisces, not a feces. >> and i'm on the cusp. >>> tech joints reporting results after the bell. as we head to break, some highlights from yesterday's deliver

implementation of the basel iii capital from work.his gives a firm position for which to press on expectations other countries implement basel iii thereby promoting the global financial stability. in characterizing the rule as a milestone in the financial regulatory reform, i should note this marker has quite differently banking organizations of systemic importance on the one hand and the thousands of smaller banks on the other. for the vast majority of banks, the rules that we adopt today will mark the end of the major modifications we plan on the capitol rules. in fact as the governor will explain in a moment, most of the significant changes from the proposed rules that we issued last year that were made in the final rule are intended to reduce and simplify the number of the modifications from the current standards that will be applicable to smaller banks. with respect to the larger banking organizations, we have a number of capital related initiatives remaining. before turning to those initiatives i note work continues on the commi

financial institutions, sending a clear message to the investment community the banks need to adopt baselright step? >> i think the task is to create a regulatory regime that ensures we eliminate too big to fail and taxpayers don't have to back up the banks again. to do that, you need to look at both risk-weighted assets and gross balance sheet. if you look at gross balance sheet, the temptation is to put on riskier assets, higher return, where risk-weighting comes in. risk-weighting is a subjective process and it is a fair acquisition to say different banks may view the same asset in different ways because of the models they built around it. in my view, need to have both things operating in harmony. you have to lock at thiok at th liquidity and average. we have a global regime for institutions like ours that is harmonized in those areas. >> let's discuss the banking system a little further. joining us is heller ebrahmi. we know a new realm has come into take the top jobs. >> i think antony jenkins won the first proponent of this new more boring barclays. we have to remember still a key d

that's because a group of researchers from the university of basel in switzerland have confirmed it doest your sleep. the study volunteers in a sleep lab found that when there's a full moon, people take about five minutes longer to fall asleep. they have less deep sleep as well. they sleep about 20 minutes less than they do during a new moon. >>> it's goal, to turn an american into an idol. ten former contestants are now accusing "american idol" of booting people off the show because they are black. do they have a case? >>> we're seeing the first images now of the late james gandolfini's last movie. going to show you that up next. [ female announcer ] only aveeno daily moisturizing lotion has an active naturals oat formula that creates a moisture reserve so skin can replenish itself. aveeno® naturally beautiful results. i've got a nice long life ahead. big plans. so when i found out medicare doesn't pay all my medical expenses, i looked at my options. then i got a medicare supplement insurance plan. [ male announcer ] if you're eligible for medicare, you may know it only covers about 80%

>> i certainly agree with the first part which is that basel three is a floor, it's not a ceiling.ade essentially by unanimous consensus, and, therefore, if there are a few countries that are very resistant for whatever reason, you know, that makes it tougher to get the higher standard. we view them as a floor, and we were prepared to do whatever additional steps are needed in order to make our financial system safe. i don't know whether all countries will follow us, but there are other countries, switzerland comes to mind, uk, that have thought hard about this and have made additional -- taken additional steps to strengthen their banking systems, and we do have a leadership position and i hope that will taken, but i don't think it will be universal. i think that you will see different responses from different countries. >> but the most important countries with financial systems will follow as governor turillo suggests? >> i don't know whether they will follow the exact same things but they all have the same -- the key financial centers, which recognize how important banks are to t

is called hitler's secret banker's that has a lot to do with the look we are talking about today, "basel," which is a fantastic title. i love that. so be ready to tee up your questions. we're delighted that c-span, booktv is here with us tonight. so if you can do us a favor if you have a question, wait for the mic to come around so we can hear you. with that said, adam, welcome. we are very, very happy to have you here. i'm particularly looking forward to what you have to say. i'm a finance geek. >> thank you for having me here. and also c-span coming tout film us. i appreciate it. i'm going start a bit by stalk -- talking in general talk you through the history of the bank. then you can kind of unwhere it came from, why it's set up. what it does today. what is the bank for international settlement? i always say it's the most important bank in the world you have probably never heard of. most people have never heard of a bis apart from people who are dealing with the more technical side of international finance or banking. the bis was set up in 1930 as part of a young plan. it's history r

very active on a number of regulatory fronts, including releasing final regulation to implement the baselthree financial rules. i think chairman bernanke personally for addressing the concerns that chairman johnson and i raised in february in our letter. a one-size-fits-all approach regarding capital roles does not work regarding these types of situations. regarding monetary policy, we have produced -- the fed pursued qentitative methods known as in order to suppress long-term interest rates. as a result, the fed's balance -- recentlyands at released, meet minutes indicate that several members felt that a reduction in asset urges his would likely soon be warranted. several noted economists have called into question one of the benefits of these purchases outweigh the risks. the negative reactions by equity markets indicates that some of the increase of the price of equities and other assets is attributable to the fed's balance sheet expansion and not too early to economic fundamentals. month ford the worst bond outflows. markets are still heavily reliant on market intervention which is not

senator johnson, quote, in regard to postponing and delaying the rules as you testified before on basel iii, that is to say the collins dment es require generally applicable capital requirements the applied to holding companies be supervised. i look at that amendment and what concerns me is i'm afraid your hands may be tied. we have two types of financial institutions. we have the short-term funding of banks and the long term insurance companies and yet we're going to give risk-based capital requirements, expanded requirements based on general accounting principles which don't apply to insurance companies, increased costs of insurance. i come from a state where insurance is important, florida. more importantly, we are going to results in a conflict between the ferguson act and the implementation of basel iii capital requirements for insurance companies. how do you feel we can resolve that? >> so quickly on the debt limit i was not trying to make a policy recommendation other than to say the last time around we got a shock to consumer sentiment and it was harmful to the economy so i hope

the bank would sponsor lavish events like yacht races in newport and the art basel modern art festival in miami beach to attract wealthy americans. then it flew in its bankers from switzerland to mingle and to try and drum up new clients and conduct business with existing ones. because the swiss bankers weren't licensed to conduct business in the united states, it was a clear violation of american banking laws on u.s. soil, and birkenfeld provided internal documents that proved the length that ubs would go to in order to avoid detection. >> call it a vacation rather than a business trip. rather than saying, "oh, yes, i'm coming to see my private clients here in the united states. and i'm coming in from zurich, switzerland." >> did you bring records into the country with you when you came in? >> generally, no. i did not. my colleagues brought in encrypted laptops. >> encrypted laptops. >> yes, so that even if they were discovered, you couldn't see what was inside the computers, which were portfolios of the clients, and they were product offerings for the clients. [watch ticking] >> up n

. >>> up next on adam talks about his book, a tower of basel about the bank of international settlements. the bank's 140 clients include central banks from around the world and other international organizations. originally established to handle a german world war i reparations the bank now act as a global financial superpower that works to stabilize the global financial system. >> welcome, everyone. [inaudible] we are a global center for leadership focused on the emerging challenges and emerging solutions. we often come together in exactly that order. we published the policy journal and like to bring people together and open settings. we believe the policy isn't just for wonks and as we think that that philosophy the series was start almost ten years ago by steve who is now in pittsburgh on the council. bringing together a diverse group of people across the political affiliations across the careers, across the nationalities to come together in a round table and talk about global issues in a bay that is relevant to everyone so we are delighted to continue that series. and we are especiall