how do you see citibank's future? >> i thank. >> i used to work at citibank. citibank's future -- they cannot succeed without market discipline. and right now they operate without market discipline. and just as importantly, they are distorting what other firms do, because they have got to compete against it actively a government-subsidized bank. so again, this is a place just like aig where you've got great business lines, great people at some places, but you've got to unlock these people and put them in the hands of managers who know how to manage the company. and you've got to do that at the expense of bondholders, who freely lend money to the company, and should take a loss when their prospects turn out to be not with the lenders have thought. there's no justification for not having bondholders to the financial system take losses. then you're just back to the problem of too much debt that no regulation in the world can overcome this subsidy. >> hi, i am mark green. what do you think -- how do you think the too big to fail issue can be solved with the concen

the building that houses citibank's offices has collapsed. 12 employees unaccounted for there. an aid worker says the walls of houses have fallen into the streets in some cases. witnesses report hearing cries for help in the rubble. the quake has been follow by more than a dozen strong aftershocks, and that has created more panic and fear in the streets. the number of casualties absolutely not known at this point. we just do not know. we've got reporters rushing there as we speak. other agencies do as well, but it is nighttime there. the u.s. state department says it has been told to expect -- this is a quote -- serious loss of life. well, the people in the middle of the catastrophe have been doing an amazing job of dealing with whatever they have to deal with this this disaster and keeping us up to date at the same time. again, we're pulling from many, many sources here in the early hours. she's helping us keep track of all of the social media content that we've been receiving. i have to say, you know, i didn't think we'd be getting that much, but there are extraordinary accou

it's his rules -- it's his rules which allows a citibanker to pay less tax on their capital gangs than a cleaner does on their wages. he's about to hit millions of average earners with higher national insurance bills. what is the fairness? where is the -- where is the aspiration in any of that? >> the aspiration is helping people into jobs. giving people the chance to earn a decent living. and making sure that the tax system is fair. so presumably he will now support our 50% tax on bonuses in the banks. he will support raising the top rate of tax to 50%. he will support removing the pension tax relieves that we are doing a as part of the deficit reduction plan. what we have tried to do is to say in these different times as we make changes, then the burden has got to be shared fairly and that means those with the broadest shoulders have to pay more. i hope he would agree with that. >> i have my personal tributes to david taylor, mr. speaker. can i bring to the attention of my right honorable friend about apprentices aged over 26 in front education college who are in urgent talks to secu

i finagled and that this interview at citibank -- and got this interview at citibank, and when i was in high school, i was learning about economics and finance and statistics, kennedy school of public policy. you learn all this hard quantitative work and you want to put to use but i go to the interview, and i'm sitting across the table from this management consultant. one of the things about management consultants is that they like to talk in pictures -- arrows, circles, then diagrams -- venn diagrams. despite set, "here is a bank, we're doing international finance work, -- this guy said, here is a bank, we're doing international finance work, tell me how you want to do this. he hands me a magic marker, and i'm looking at the magic marker, and at him, at the white board, and i look at the magic marker, look at him, look at the white board. i got nothing. [laughter] so in the back of my head, i hear this little voice that says, "put down the magic marker." [laughter] so i put it down on the desk, and i just start talking did so as i start talking about this problem, the legal issues,

citibank has recently started charging consumers annual fees, $30 to $90 if you don't charge at least year. bank of america following suit. some of the big banks following. some of the big banks guilty of this one. they're trying to shore up the balance sheet because of the changes going into effect february 2010 that are going to cost them big money. a lot of lost revenue. here's a way to make up for that. >> very few people i think read their statements. >> i just started to because of these changes going into effect. consumers everywhere should. >> word to the wise. >> yeah. >> thank you, vera. >>> still head -- high-stakes battles over tv programming. how the end result could mean you pay more for less programming. we are building a website by ourselves. announcer: there's an easier way. create your own business site with intuit websites. just choose a style, then customize, publish and get found. sweet. get a 30-day free trial at intuit.com. it will clean so deep, she'll never go back to you again. sorry. ♪ love stinks ♪ love stinks, yeah, yeah [ laughs ] [ female announcer ] new

citibank. biddle deutsche bank decided to get into the islamic finance business. they have made islamic finance into a global area of business. about $5 trillion. it is not that big in terms of global economy but it has grown at 30% of year in the past decade. even last year when you had the global economic turndown it grew by 50%. it grew by more than you think. there is quite a common issue, islamic bonds. bonds that are interest free. you even have it in a variety of western society is. ford motor co. financed the acquisition of the issuance of an islamic bond. or the united states's second largest coffee shop owned by islamic mutual-funds. why would these banks roll up their sleeves and decide to produce islamic products? finance years. the will bankers look for ways to make money, look for products to make money. it could be credit swaps or islamic bonds. the point is they realized there is a market of islamic -- people who have money, who are willing to engage global and financial activity but provided it is compatible with their values. a few years ago a ba

the big banks seem to be getting their act together, some more than others but as i say even citibank is raising capital privately and the concern has moved to smaller banks and the midsize banks have lots of loans and commercial real-estate riches collapsed and that means that they are taking big losses and we've lost 130 banks so far. most of them, must not all of them small, we're probably going to lose more. but most seriously the these are institutions that lend to businesses who don't have a lot of options for getting money, many companies of the banks won't lend them money they can sell securities on the capitol markets. but small businesses and medium-sized businesses often can't to read and edit where it is particularly important is if you've been a longtime customer of a small bank and the bank goes under were sold to somebody else, even if you have good credit, the new bank man of sort of understand what you do it may be reluctant to lend you money. >> host: and the old bank is on the edge it's pulling back your credit even though you haven't done anything wrong. >> guest:

some more than others but as i say, even citibank is raising capital privately. and the concern has moved to smaller banks and midsize banks that have lots of loans in commercial real estate which has collapsed, and that means they are taking big losses and they've lost 130 banks so far most of them but not all of them small and we are probably going to lose more but more seriously, that these are institutions that lend to businesses who don't have a lot of options for getting money. very big companies of the banks will send them money to cancel securities on the markets but small businesses and medium-size businesses often can't. i think where it is particularly huge is a few been a customer of a long time bank and the bank goes under or is sold to somebody else even if he were a good credit, the new bank may not understand what you do and maybe reluctant to lend you money. >> host: of the old bank is on the engines pulling back your credit even though you haven't done anything wrong >> guest: that is a huge problem and you know, i know because i've heard you ta

the first is in respect to citibank. be borrowing at the discount window in the early 1990's reportedly sparked runs as some up -- at some of its offices in asia. xdit is interesting that there s not a run in the united states. you could take the boards representation and say that it did not spark a run in the united states. the clearing house, having lost out of the public record instead of the record on appeal, comes up with one other example, in northern iraq. -- northern rock. and then there is a news leak. >> you are saying that these examples show that the claim of prejudice, based on the possible run of a bank is speculative. >> indeed. >> i am looking at exemption 8 and it is discussing the exemption of banks. you can deduce that congress recognizes that the soundness of the banking system should be brought to bear on the disclosure obligation. this kind of concern is not speculative. >> i have a couple of responses to that. the easiest is that theym board did not invoke section 8. the record makes clear that th

the first is in respect to citibank.nk may be borrowing at the discount window in the early 1990's reportedly sparked runs as some up -- at some of its offices in asia. xdit is interesting that there s not a run in the united states. you could take the boards representation and say that it did not spark a run in the united states. the clearing house, having lost out of the public record instead of the record on appeal, comes up with one other example, in northern iraq. -- northern rock. and then there is a news leak. >> you are saying that these examples show that the claim of prejudice, based on the possible run of a bank is speculative. >> indeed. >> i am looking at exemption 8 and it is discussing the exemption of banks. you can deduce that congress recognizes that the soundness of the banking system should be brought to bear on the disclosure obligation. this kind of concern is not speculative. >> i have a couple of responses to that. the easiest is that theym board did not invoke section 8. the record makes clear t

caller: i have four credit cards, two are with the same bank, citibank.ant to merge both cars because one has a high limit and the other has a low limit. they're both mastercard and the bank told they could not do because of a federal law, the new federal law. why should i be penalized if i keep they zero balance. if i pay off my credit cards, why should i be penalized as far as my credit rating is concerned? guest: you are not being penalized in terms of your credit rating. i assume you are talking about closing one of the accounts and having your credit score change. fico scores are an algorithm that is designed to predict whether you will pay your bill. it has nothing to built with anything else except a mathematical probability of whether you pay your bill. part of that is your payment history. that is a large part of it, actually. credit utilization is another part of it. when you close a card, your credit record still stays on the record for a very long time. we are talking 7-10 years. it remains there and it will not penalize you. it has a small af

john reid -- the former ceo of citibank. this has not been a partisan issue.t is more of good policy. >> one the administration revealed its fraud proposal, i am wondering what happens between then and now. i know there were criticisms you were not addressing -- too big to fail. >> i would say two things -- the issue of financial risk taking, too big to fail, and the broader regulatory effort is totally central. it is central to the house bill, which specifically authorizes regulators to be able to do exactly this regulation on scope, on skill, and the size of institutions. over the last year, members of the president's economic advisor report have been infrequent and constant contact with the economic team, and the president in the fall fought about these issues quite a lot, worked with the representative in drafting the bill. i think another factor has been you saw coming out of the rescue the government provided a safety net to financial institutions that they used, and they have in recent months started making considerable profits off their proprietary tra

caller: i have four credit cards, two are with the same bank, citibank. want to merge both cars because one has a high limit and the other has a low limit. they're both mastercard and the bank told they could not do because of a federal law, the new federal law. why should i be penalized if i keep they zero balance. if i pay off my credit cards, why should i be penalized as far as my credit rating is concerned? guest: you are not being penalized in terms of your credit rating. i assume you are talking about closing one of the accounts and having your credit score change. fico scores are an algorithm that is designed to predict whether you will pay your bill. it has nothing to built with anything else except a mathematical probability of whether you pay your bill. part of that is your payment history. that is a large part of it, actually. credit utilization is another part of it. when you close a card, your credit record still stays on the record for a very long time. we are talking 7-10 years. it remains there and it will not penalize you. it has a small

support of paul volcker, nicholas brady calling for similar thing, john reed, the former ceo of citibank -- this has not been a partisan issue. it is more of a good policy in the view of the president. >> when the administration released its broad proposals for regulatory reform last june, this was not part of the proposal. i am just wondering what happened between then and now takashi to bring this up. -- to cause you to bring this up. >> the issue of excessive risk- taking by financial institutions is totally central to the white paper that we released in june. it is central to the house bill, which specifically authorizes regulators to be able to do exactly this type of regulation on scope, on a scale, and the size of institutions. over the course of the last year, certainly paul volcker and member of the economic recovery advisory board have been in frequent and constant contact with the economic team. in the fall, the president thought about these issues quite a lot. another factor has been, you saw coming out of the rescue, the government provided a safety net to financial institut

and then we put more money in because they couldn't fail, where in the other -- everything from citibank to merrill lynch to everything else there were processes on money coming in, guidelines on it coming in and they used the leverage of the threat of bankruptcy to do that. then in this case it appears that it was different and partly is that the creditors of different. furthermore, that some of the critical information here was withheld from being public at the request of the new york fed. that had that been public people would have seen it and there was an attempt to even keep it quieter because that was critical, that information, to understand what was going on behind. it is extremely frustrating to all of us on this committee. you can hear it in different types of questions about how this came to be and that we -- i don't think there's been a compelling case made that aig is unique. >> the gentleman's time has expired. i would say if mr. paulson wants to respond to the gentleman you may do so. >> i have no response. >> okay. i thank the gentleman. chair recognizes mr. kanjorski. >>

support of paul volcker, you're seen republican former secretary of treasury, the former ceo of citibank. this is more a good policy in the view of the president. >> when the administration released the broad proposals last june, that wasn't part of the proposals. what happens between then and now to cause you to bring this up? i know that there were criticisms at the time that you weren't addressing too big to fail? >> well, i would say two things about that. the issues of excessive risk-taking by financial institutions and too big to fail is totally central to the white paper that we released in june. it's central to the house bill, which specifically authorized regulators to be able to do exactly this type of regulation on scope, on scale, and on the size of institutions. over the course of the last year, certainly paul volcker, members of the president's economic recovery advisory board have been in frequent and constant contact with the economic team, and the president, in the fall, thought about these issues quite a lot. he worked with republicannive kanjorski when drafting the bil

everything from citibank to merrill lynch to everything else, there were processes where there were conditions on money coming in, where there were guidelines coming in and they used the leverage of the threat of bankruptcy to do that. then in this case it appears that it was different, and it partly is that the creditors are different. furthermore, some of the critical information here was withheld from being public at the request of the new york fed. that had that been public, people would have seen it, and there was an attempt to even keep it quieter because that was critical, that information, to understand what was going on behind. and it is extremely frustrating to all of us, you can hear it in different types of questions, about how this came to me, and i don't think there's been a compel being case made -- >> the gentleman's time has expired, but i would say thatf mr. paulson wants to respond to the gentleman, you may do so, and if not, we'll go to the next question. >> i have no response. >> okay. i thank the gentleman. chair recognizes mr. kanjorski. >> thank you very much, mr. chair

and then we put more money in because they couldn't fail, where in the other -- everything from citibank to merrill lynch to everything else there were processes on money coming in, guidelines on it coming in and they used the leverage of the threat of bankruptcy to do that. then in this case it appears that it was different and partly is that the creditors of different. furthermore, that some of the critical information here was withheld from being public at the request of the new york fed. that had that been public people would have seen it and there was an attempt to even keep it quieter because that was critical, that information, to understand what was going on behind. it is extremely frustrating to all of us on this committee. you can hear it in different types of questions about how this came to be and that we -- i don't think there's been a compelling case made that aig is unique. >> the gentleman's time has expired. i would say if mr. paulson wants to respond to the gentleman you may do so. >> i have no response. >> okay. i thank the gentleman. chair recognizes mr. kanjorski. >>

depository institutions like citibank were able to parlay their deposits in the large levered beds inhe derivatives market place. and are, at fiscal year end 2007, citigroup was 68 times levered to its tangible common equity, including off-balance sheet exposures. the composition of these assets is important as well. but i've simply tried to illustrate how levered these copies were at the start of the financial crisis. while aig's book was only 20 times, 64 billion of these derivatives were related to subprime and subprime credit securities, the majority of worth were worth zero. i put a table, labeled exhibited in my presentation. what we've done is look back at the cumulative net income that was lost and financial institutions is the third quarter of 2007. fannie mae lost 20.5 years of its profits in the last 18 months. aig lost 17.5 years of its profits in the last 18 months. freddie mac lost in them and .5 of profit. a little bit more than a year. the point of trying to make is the ridiculousness of what's going on in the leverage that was in the system, the key problem of the sys