i am here, particularly addressing aig, citigroup -- i am accused from -- i am recused from ottawa. -- auto. i am particularly mindful of the lessons of our panel's detailed examination of the collapse of aig in our june report. that report is a powerful brief for the wisdom of kkeping government-insured liabilities away from highly risky assets, and for the need of a strong resolution of 40, and need which you have championed much to the public's benefit. it is a challenge to evaluate tarp in two different metrics, which are both important. tarp is literally a set of investments in the financial institutions and certain other firms. the second is really the purpose of tarp, which was to ensure the financial system did not take our economy down. we have moved from an environment where the threat was a cute, too, i believe, where the threats are chronic. that is what i hope to take up today, in addition to the other two subject to i'm mentioned. again, my thanks to the secretary for appearing beffre us. i look forward to a testament. >> thank you. dr. troske. >> thank you. i would like

by the closing bell the stock was down about 5%, 3.73 on citigroup shares. the new circuit breakers that regulators put in, they're working. today was evidence of that. hopefully if this situation happens again it will prevent one of those flash crashes that we saw in may from happening. >> sreenivasan: anchor of the nightly business report on pbs, thanks so much. >> great talking to you. >> sreenivasan: house and senate negotiators will reconsider part of their deal on financial regulation reform. the bill needs 60 votes to advance in the senate but several key republicans now oppose a fee on big banks and hedge funds. the bill lost the democratic vote with the death of west virginia senator robert byrd. president obama voiced confidence today after meeting with federal reserve chairman ben bernanke. >> senators hopefully on both sides of the aisle recognize it's time we put in place rules that prevent tax payer bailouts and make sure that we don't have a financial crisis that can tank the economy. i think there's going to be enough interest in moving refor

is this not what we were told with respect to goldman, aig, citigroup, bank of america, among others, that simply certain institutions were too big to fail, and couud not be permitted to liquidate? is a resoluion of 0 included in the pending inancial reform legislation -- is the resolution included in the pending financial reform legislation, dressed up? aig was regulated by approximately 400 regulators. most professionaas completely missed the best systemic risks that were percolating. how will the addition of a systemic regulator proposed under the pending financcal reform legislation help to solve this problemm where did treachery, the fdic, the sec, and the cftc expect to find these super-regulators who are competent to call out systemic risk that others have missed? even though systemic regulators have timely call about risk, how will they convince other regulators, the global financial -- the global financial community and congress that the worries are significant and could be a great cost to taxpayers and the financial community? why it former federal reserve chairman paul volc

citigroup. goldman sachs. hsbc. wells fargo. bank of america. morgan stanley. they have a whole lot more power than the people in my community in the financial realm. why is that? chances are if you talk to your relatives and neighbors, you'll find that over half of the money that they are spending to pay for their mortgage or pay for their car loans doesn't go to a local financial institution in the town in which you live, it goes to a distant institution somewhere else that sucks money, sucks wealth, sucks power away from your community and places it somewhere else system of this is a really threshold question. what does the bill do with the power to create money? today, it's shocking, but 2/3 of the financial assets of this country, 2/3, are held by those six institutions. before the financial crisis of 2008, they only held a third of the power. now they have 2/3 of the power. i say that's way too much. that's not a competitive financial system. that's what economists would call an oligopoly. very few having very much and taking it away from the rest of us s

is this not what we were told with respect to goldman, aig, citigroup, bank of america, among others, that simply certain institutions were too big to fail, and could not be permitted to liquidate? is a resolution of 40 included in the pending financial reform legislation -- is the resolution included in the pending financial reform legislation, dressed up? aig was regulated by approximately 400 regulators. most professionals completely missed the best systemic risks that were percolating. how will the addition of a systemic regulator proposed under the pending financial reform legislation help to solve this problemm where did treachery, the fdic, the sec, and the cftc expect to find these super-regulators who are competent to call out systemic risk that others have missed? even though systemic regulators have timely call about risk, how will they convince other regulators, the global financial -- the global financial community and congress that the worries are significant and could be a great cost to taxpayers and the financial community? why it former federal reserve chairman paul v

before i became the ceo of jpmorgan chase, as president of citigroup -- i just want to mention, that was 10 years ago -- and one day, i went to work and was very surprised to have been fired by the man i had been working with for over 15 years. i remember coming home to try to explain to my wife and my three young daughters, and my wife and one of my daughters is here today. they were in naturally scared for our family. my youngest daughter was 8 at the time. she is here today. she asked, "dad, will we be able to keep our house? will we have to live in the st.?" i said, "of course not, darling." my middle daughter who had always looked forward to going to college said, "dad, but i still be able to go to college?" and i said, "of course, darling." and my oldest daughter talked about the cell phone. some make no mistakes. setbacks will happen. when they do, it is ok to get depressed, blame others, for a while. a ventura, you have got to get up, dust yourself off, learn from it, and move on. [applause] it takes humility to be accountable. we all stand on the shoulders of those who came

is this not what we were told with respect to goldman, aig, citigroup, bank of america, among others, that simply certain institutions were too big to fail, and could not be permitted to liquidate? is a resolution of 40 included in the pending financial reform legislation -- is the resolution included in the pending financial reform legislation, dressed up? aig was regulated by approximately 400 regulators. most professionals completely missed the best systemic risks that were percolating. how will the addition of a systemic regulator proposed under the pending financial reform legislation help to solve this problem? where did treachery, the fdic, the sec, and the cftc expect to find these super-regulators who are competent to call out systemic risk that others have missed? super-regulators who are competent to call out systemic risk that others have missed? even though systemic regulators have timely call about risk, how will they convince other regulators, the global financial -- the global financial community and congress that the worries are significant and could be a great cost t

but these are the same tools that were used to orchestrate the bailouts of citigroup, bank of america, chrysler, gm and rescue to the shareholders of bear stearns. there is also a matter of perpetuating taxpayer bail us. the house bill has a bailout fund. the senate bill allows the fdic to borrow money to wind down the is a institutions. o ultimately pay for these mechanisms? the taxpayer. enough is enou we c do better by creating an enhanced chapter of the bankruptcy codwith a resolution of 40 to prevent future bailouts and create er transparency -- resolution of failed entities to prevt future bailouts and create better transparency. as we kw in the conservatorship of fannie and freddie, we hav $145 billion of taxpayer dollars already at stake. the time has come for sensitive reform of th gse's. we still have plenty of time. we have the will to tackle the enormous exposure tthe taxpayers of fannie and freddie. i look forward to an open and transparent conference and the type of financial reform that will hold wall stree i look forward to the kind -- >> the chairman of the agricultur

before i became the ceo of jpmorgan chase, as president of citigroup -- i just want to mention, that0 years ago -- and one day, i went to work and was very surprised to have been fired by the man i had been working with for over 15 years. i remember coming home to try to explain to my wife and my three young daughters, and my wife and one of my daughters is here today. they were in naturally scared for our family. my youngest daughter was 8 at the time. she is here today. she asked, "dad, will we be able to keep our house? will we have to live in the st.?" i said, "of course not, darling." my middle daughter o had always looked forward to going to college said, "dad, but i still be able to go to college?" and i said, "of course, darling." and my oldest daughter talked about the cell phone. some make no mistakes. setbacks will happen. when they do, it is ok to get depressed, blame others, for a while. a ventura, you have got to get up, dust yourself off, learn from it, and move on. [applause] it takes humility to be accountable. we all stand on the shoulders of those who came befor us

unusual statement in the context of these characters we've heard again and again that whether it be citigroup or fannie mae, they did not manage e bae sheet. they got over well with something so large that they could not manage it. something that lae could not have emerged. it is important to come back to that and it is important in the light of this hearing, because part of this question is, what was the management of the balance sheets of these rating agencies? was due diligence done in pricing for the risk of work collided with the most important thing going on in the economy, or was it looking at the ability to manage volume and take advantage of for the prices are? thank you. >> i would yield coissioner wallison the remainder of the time. i like the more dramatic way that i said it. it's a man and which is an empty offer. but one of the issues that the central to the hearing is whether the problems at moody's, and we agree that there were some problems, are systemii in the sense that they extend across the board throughout moody's. or are simply you need to the housing mortgage area. --

unusual statement in the context of these characters we've heard again and again that whether it be citigroup or fannie mae, they did not manage the balance sheet. they got over well with something so large that they could not manage it. something that large could not have emerged. it is important to come back to that and it is important in the light of this hearing, because part of this question is, what was the management of the balance sheets of these rating agencies? was due diligence done in pricing for the risk of work collided with the most important thing going on in the economy, or was it looking at the ability to manage volume and take advantage of for the prices are? thank you. >> i would yield commissioner wallison the remainder of the time. i like the more dramatic way that i said it. >> it's a man and which is an empty offer. but one of the issues that the central to the hearing is whether the problems at moody's, and we agree that there were some problems, are systemii in the sense that they extend across the board throughout moody's. or are simply you need to the housing mortg

but these are the same tools that were used to orchestrate the bailouts of citigroup, bank of america, chrysler, gm and rescue to the shareholders of bear stearns. there is also a matter of perpetuating taxpayer bail us. the house bill has a bailout fund. the senate bill allows the fdic to borrow money to wind down the is a institutions. who ultimately pay for these mechanisms? the taxpayer. enough is enough. we can do better by creating an enhanced chapter of the bankruptcy code with a resolution of 40 to prevent future bailouts and create better transparency -- resolution of failed entities to prevent future bailouts and create better transparency. as we know in the conservatorship of fannie and freddie, we have $145 billion of taxpayer dollars already at stake. the time has come for sensitive reform of the gse's. we still have plenty of time. we have the will to tackle the enormous exposure to the taxpayers of fannie and freddie. i look forward to an open and transparent conference and the type of financial reform that will hold wall street accountable and permits main street to th

the credit rating agencies, the unconscionable packages awarded at countrywide, merrill lynch and citigroup. and the mistakes made by alan greenspan and other regulators. those hearings showed government regulators were asleep at the switch while wall street banks drove our economy off a cliff. change is necessary and i believe this legislation to strengthen the federal government possibility to prevent and respond to future crises. there are a number of issues that are important to my current committee, the committee on energy and commerce. we have consumer financial protection, regulation of electricity and other energy markets. i strongly support a new consumer finance protection agency that is independent, has strong role making and enforcement authority and has broad jurisdiction over the entities that provide financial products and services to consumers both for the house and senate. our challenge will be to produce a consumer financial protection agency that has all of the tools it needs to be successful. our economy and our families across the country are suffering from the abuses o

hensarling: is the distinguished gentleman suggesting we need deposit insurance for firms like citigroup and goldman sachs? mr. frank: that's even by the standards of this debate wholly illogical. what i'm suggesting is the glaring inconsistency between saying bankruptcy is the only way you put an institution out of business and the failure to apply that to the banking institution. by the way, i don't -- i don't mean to be rude but the gentleman mentioned city corp., but there's a bank there that has deposit insurance. there's another error -- there's another error i tried twice, this is that the bill designates institutions too big to fail or systemically important. that's misleading as stated. in fact, the bill in the house does not designate any institution as being systemically important. the only way an institution would be designated as systemically important is if it was found to be troubled. so there would be no situation in which an institution would havehat label and go out and be able to do things with it. under the bill we have, only a finding that the institution is in diffi

citigroup, others. are these banks in danger of rolling over and dying on us? would you answer that for me, please. and i will hang up and listen to your answer. thank you. guest: thanks for the question. thanks for the question. i don't know if i am a total banking expert and i don't know all of those. i mean, i'm familiar with most of them. i think the best answer to the question is, you know, on the one hand they are many of them still are probably struggling with some commercial real estate loans. there was some mention of that in the feds report that that is still potentially an issue for some big banks and even some of the smaller ones. on the other hand, what we saw with the bank bailout is that the government has put its weight behind particularly larger banks. and so it's hard. they have almost said that they are not going to let them fail. so i flight now the government is selling its share in city group slowly but surely. i think recently sold a lot of shares. so i think that's a sign that they feel like city group is the getting back on their own tw

bankamerica, city group and -- city group -- citigroup, and crestar financial are out, leaving the otherfour. i doubt very much that this will ever be repeated. it is sort of a one off. the other example that raises some interesting issues is the dp gulf coast -- of the bp and gulf coast plant facility. -- claims facility. this is very interesting. bp has voluntarily contributed $20 billion to deal with claims arising out of this bill -- of the spill. bp is also told the administration that of $20 billion -- that if $20 billion is not enough, they will also replenish the fund beyond 20 billion. the bp claims facility is independent and i am beholden neither to the administration nor bp. by agreement, i can do it on my own and exercise sound discretion in distributing the funds. the challenge with the dp -- bp facility is going to be that it is all well and good to set up this wonderful furniture mechanism to litigation -- this wonderful mechanism to litigation. what is your definition of an eligible claims under the fund? some claims are easy. mr. feinberg, i am a fisherman. i cannot fis

hensarling: is the distinguished gentleman suggesting we ed deposit insurance for firms like citigroupand goldman sachs? mr. frank: that's even by the standards of this debe wholly illogical. what i'm suggesting is the glaring inconsistency between saying bankruptcy is the only way you put an institution out of business and the failure to apply that to the banking institution. by the way, i don't -- i don't mean to be rude but the gentleman mentioned city corp., but there's a bank there that has deposit insurance. there's another error -- there's another error i tried twice, this is that the bill designates institutions too big to fail or systemically important. that's misleading as stated. in fact, the bill in the house does not designate any institution as being systemically important. the only way an institution would be designated as systemically important is if it was found to be troubled. so there would be no situation in which an institution would havehat label and go out and be able to do things with it. under the bill we have, only a finding that the instition is in difficulty

just tsee how this worke we looked at a 2006 are, mbs sponsored by citigroup. $948 million. 75% weredjustable rate. 33% were 228 loans balloon payment. 13% of the mortgages properties had been foreclosed upon. by june, 2009, 31%. over50% of th lns are now 6 days plus delinquent and all the bonds have been downgraded to junk the other deal is the merrill lynch deal. it's the ratings memos of tab 22. i would like to enter both of those into the record. mr. kolchinsky ielieve you would have worked on this merrill lynch deal. 488 miion downgrade started in tober, '07. it's now been all downgraded to junk. and the value of the collateral originally488 million is now at 67 million. down 87% from its peak. you know, i loo at that and i think when you go into a sto you get -- you see grade a eggs you assume maybe one of those eggs will be cracked. turns out all 12 were cracked and it was originally rated aaa. i guess my question for you, because you were on this deal -- and be way, you sent an email about this deal which i'd likeo enter into the record to yvonne fu and talked about how this deal was