it is a requirement of dodd- frank. of limitation of living wills is left to the fdic and the federal reserve. they have until january 2012 to work on it. it was part of the proposal that treasury made and we have backed the concept the entire time. you are right, that is a critical tool on how -- and how thoroughly it that is enforced and how thorough those plans are will make a critical difference. in terms of the rating agencies, they're watching this closely. they should. again, have made it clear that what they're doing is monitoring it. they are seeing -- >> they are making calculations and the calculation is we're reading the banks and giving them a preferential position with respect to the market based on their confidence that someone else will step in. >> that is correct and they are doing that worldwide. they have said we're closely monitoring the situation to see how these resolution regimes are implemented and to see if there is the political will to ensure the there are no bailouts in the future. >> what wo

it is a requirement of dodd- frank. of limitation of living wills is left to the fdic and the federal reserve. they have until january 2012 to work on it. it was part of the proposal that treasury made and we have backed the concept the entire time. you are right, that is a critical tool on how -- and how thoroughly it that is enforced and how thorough those plans are will make a critical difference. in terms of the rating agencies, they're watching this closely. they should. again, have made it clear that what they're doing is monitoring it. they are seeing -- >> they are making calculations and the calculation is we're reading the banks and giving them a preferential position with respect to the market based on their confidence that someone else will step in. >> that is correct and they are doing that worldwide. they have said we're closely monitoring the situation to see how these resolution regimes are implemented and to see if there is the political will to ensure the there are no bailouts in the future. >> what wo

dodd-frank contains three main elements.irst, it gives the government of 42 shot down and break apart firms whose failure might threaten the system. it does so in a way that protects the economy while ensuring large financial firms bear the cost. it provides as with the tools to insure no firm will be insulated from the consequences of its actions are protected from the year. it makes clear that taxpayers must be asked to bear the cost of a financial firms failure. dodd-frank creates a framework for identifying and responding to rest in the financial system that creates the financial stability oversight council and the office of financial research. it is charged with responding to emerging threats and promoting market discipline. ofr addresses the critical need for more standardized and useful data. dodd-frank requires regulators to impose substantially stronger provincial standards, risk-based capital standards will be stronger. complex firms will have to hold more. dodd-frank requires that certain large firms undergo regul

he was referring to the tools under dodd-frank. i think it is clear that we do not know what the next crisis will be. we believe that the tools we now have under dodd-frank give us the ability to minimize the effects. it requires, as i say, in an effective implementation of those tools. >> is there any concern or what could believe that there are still banks that are too big to fail? the people all over the world -- i know there is a new study coming out which has not been dealt with in dodd-frank and would be -- any kind of the concern in terms of moving forward? >> certainly. i think the moral hazard issue is a very significant one. as you all have noted, it is a very significant issue in light of what we had to do. again, i think it is up to us now to take the tools that congress has given us and work to minimize that risk. >> one of the frustrations that everyone has is the fact that we went in and helped out the banks and corporations, and then the jobs did not come. the banks held on to the money. is there some way tarp could

with dodd-frank, would you have done it differently? >> dodd-frank gives you the tools to dismember a non-bank. that was a problem we had with a.i.g. now we have that authority. >> when you listen to economists talk about our economy, what do you believe the two big to fail? >> moral hazard is a serious issue that we have to continue to look at and address. i think, though, the focus now should be on implementing dodd- frank. >> i understand that. i am just trying to figure out what you learned specifically. you are saying that all the things treasury would like to have had, that would have helped them resolve -- eliminate or minimize moral hazard? >> i guess i would say that we have all the tools congress decided to give us. >> this is your chance to lay out anything in the bill that you would have liked to have, if we're move forward with this. >> i do not know that i want to read litigate the battle over dodd-frank. the main thing is we did achieve, in a short time, a dramatic overhaul. i think our focus should be on implementing tha

he was referring to the tools under dodd-frank.nk it is clear that we do not kw what the next crisis will be. we believe that the tools we now have under dodd-frank give us the ability to minimize the effects. it requires, as i say, in an effective implementation of those tools. >> is there any concern or what could believe that there are still banks that are too big to fail? the people all over the world -- i know there is a new study coming out which has not been dealt with in dodd-frank and would be -- any kind of the concern in terms of moving forward? >> certainly. i think the moral hazard issue is a very significant one. as you all have noted, it is a very significant issue in light of what we had to do. again, i think it is up to us now to take the tools that congress has given us and work to minimize that risk. >> one of the frustrations that everyone has is the fact that we went in and helped out the banks and corporations, and then the jobs did not come. the banks held on to the money. is there some way tarp could ve been

that is the dodd-frank requirement. we had existing sec rules that required for asset backed securities registration statements that of the rating was used to sell the securities the rating needed to be included in in the registration statement. rating agencies have absolutely unequivocally at least the ones that are in existence now, refused to consent so that made public offerings up asset-backed securities impossible because they couldn't get the consent of the rating agency to include the ratings but they use the ratings to sell the securities. so we temporarily set aside our rule, our requirement that the asset-backed issuers disclose their ratings and a registration statement because we didn't want to be holding up all public offerings up asset-backed securities and pushing them into the private market which we felt were not as good for investors. we are right now, our staff is working through a reconsideration of our disclosure requirements and i believe that they recommend we eliminate our preexisting requiremen

i just think dodd frank takes a major step back. banks' subsidiaries will now have to comply it with laws instead of one national uniform interpretation here. i think -- it will do little to protect consumers are make our capital markets more competitive i hope this committee will take the next necessary steps to correct these failures. we now go to mr. scott of georgia for his comments. >> thank you very much. i appreciate that. welcome, ms. warren. i think that you have a delicate balance. on the one hand, if you have to make sure that the consumers have the proper information to educate them about some of the practices in our financial services industry, but you also have the requirement to make sure that what you do will not thwart access to capital. for our consumers, for the banking community, and for small businesses. well at the same time, give the confidence to day that you will also protect the american consumer. protect access to capital. i would also like for you to address what impact my good friend on the other side of

he was referring to the tools under dodd-frank. i think it is clear that we do not know what the next crisis will be. we believe that the tools we now have under dodd-frank give us the ability to minimize the effects. it requires, as i say, in an effective implementation of those tools. >> is there any concern or what could believe that there are still banks that are too big to fail? the people all over the world -- i know there is a new study coming out which has not been dealt with in dodd-frank and would be -- any kind of the concern in terms of moving forward? >> certainly. i think the moral hazard issue is a very significant one. as you all have noted, it is a very significant issue in light of what we had to do. again, i think it is up to us now to take the tools that congress has given us and work to minimize that risk. >> one of the frustrations that everyone has is the fact that we went in and helped out the banks and corporations, and then the jobs did not come. the banks held on to the money. is there some way tarp could

better. >> how does it benefit from dodd frank as it refers to the central bank? >> number one, they doesn't screw it up too badly. and two, there is a public function that is in place now and there will be more opportunities for banking institutions to interface on issues that directly affect consumers. so hopefully we can avoid the kind of problems we got into with sub-prime mortgages and we have an earlier warning system on those. and i think that's a plus. and i think that we will end up seeing that our big, important international banking institutions survive. but that they are regulated in a way there is more transparency, you can see what is going on, and incentive compensation is more related to reality, things like that. >> not to pick on one man, but why should we watch a jamie diamond run is it the biggest financial institution in town, jpmorgan chase? >> probably right. >> and serve on the board of the fed and setting rates, isn't that a conflict? >> again the board doesn't set rates but tells what is going on in the economy. and who has a better vanta

is by definition under dodd-frank exempt from risk retention. all other loans are not except those that'll fall under the q.r.m. or the qualified religionsdential mortgage. it would be a as doe disaster fe recovery of american housing to force americans to only one source of money to finance their home and put so much stress on federal housing administration and f.h.a. that it collapsed under the burden. we need to be magmatic when belook at the issues facing house. we need to be practical in taking dodd-frank and making it work. we need to recognize the value of private mortgage insurance, the value of good, solid underwriting and not put a risk retention in that's so high that we take most american mortgage lendlers oust the business, isolate it only to a few who dictate the pa ram ers this they want to write and make housing loans in america. we are at a critical time in our recovery. housing has hit the bottom and bounced along the bottom. but it is showing some signs of coming back. now would be the worst time to send a signal that mortgage

i just think dodd frank takes a major step back. banks' subsidiaries will now have to comply it with laws instead of one national uniform interpretation here. i think -- it will do little to protect consumers are make our capital markets more competitive i hope this committee will take the next necessary steps to correct these failures. we now go to mr. scott of georgia for his comments. >> thank you very much. i appreciate that. welcome, ms. warren. i think that you have a delicate balance. on the one hand, if you have to make sure that the consumers have the proper information to educate them aboutome of the practices in our financial services industry, but you also have the requirement to make sure that what you do will not thwart access to capital. for ouronsumers, for the banking community, and for small businesses. well at the same time, give the confidence to day that you will also protect the american consumer. protect access to capital. i would also like for you to address what impact my good friend on the other side of the

that's provided by dodd-frank. i thk that supervisors will be paying more attention to this in the future and we should pay more attention to it. and finally one thing that the fed reserve is very interested in and we have been talking about this with congress and other agencies is to have national servicing standards. that turns out to be an important part of the process of making sure that people who do run into trouble are able to get restructured mortgages and our chance to keep our home. so there are a number of things in the bill, but i -- i think as we go forward, we want to make sure that we have sufficient oversight that we can assure that the mortgages are of good ality. i think that as the gses begin to pull back, as they will, we will see private label mortgage-backed securities coming back into the market, but it is pretty limited right now. there some. >> my time isexpired. would you take for the record the question of some recommentions about how to go further on structural changes that might make th

there are many areas of dodd- frank that were left for further review that have not happen. we have two-thirds of the biggest hedge funds here in the new york area. they are all wondering how are these systemic risk definitions going to affect them? there is a whole range of uncertainty about what the rollout of the regulations will do. that has had a role in retarding investment and job creation. you have many financial people standing on the side. there was a discussion in the last couple of months about banks and their capitalization requirements. if you did not have 20% down to buy a home the banks will have to treat you as higher risk capital. having worked much of my career to rebuild urban neighborhoods and the house of preference for communities -- as an owner with three rental units and nothing is more secure than the income for rental. there is always a demand. under this requirement, if you have a two-family home, that will probably cost $500,000. you would have to have 20% cash. most middle-class families don't have that kind of cash. it will change very profound

i just think dodd frank takes a major step back.banks' subsidiaries will now have to comply it with laws instead of one national uniform interpretation here. i think -- it will do little to protect consumers are make our capital markets more competitive i hope this committee will take the next necessary steps to correct these failures. we now go to mr. scott of georgia for his comments. >> thank you very much. i appreciate that. welcome, ms. warren. i think that you have a delicate balance. on the one hand, if you have to make sure that the consumers have the proper information to educate them about some of the practices in our financial services industry, but you also have the requirement to make sure that what you do will not thwart access to capital. for our consumers, for the banking community, and for small businesses. well at the same time, give the confidence to day that you will also protect the american consumer. protect access to capital. i would also like for you to address what impact my good friend on the other side of

i'm proud of dodd-frank and particularly... she came to me a couple years wag that idea and i'm honored. she did a video... >> rose: to create the bur slow in >> to create the independent video. and here's the problem. until we passed that bill, consumer protection was done as an afterthought by the control of the currency. >> rose: where was it? in the federal reserve in >> it was sped out. some was in the federal reserve, some was in the control of the currency, some of it was in the federal deposit insurance corporation. and some was nowhere. we have things like payday lenders and check cashers was where there was no federal involvement. so we said we're going to make it their job who will protect bank and as an afterthought do that. that's more popular with the tea party wing than health care. >> rose: here's the criticism they make. it seems to me the president ought to have the political courage to go ahead and do it. >> that's a nice word you use, "courage." >> rose: do r they right? >> people could have used other words

that's provided by dodd-frank. i think that supervisors will be paying more attention to this in the future and we should pay more attention to it. and finally one thing that the fed reserve is very interested in and we have been talking about this with congress and other agencies is to have national servicing standards. that turns out to be an important part of the process of making sure that people who do run into trouble are able to get restructured mortgages and our ance to keep our home. so there are a number of things in the bill, but i -- i think as we go forward, we want to make sure that we have sufficient oversight that we can assure that the mortgages are of good quality. i think thats the gses begin to pull back, as they will, we will see private label mortgage-backed securities coming back into the market, but it is pretty limited right now. there is some. >> my time is expired. would you take for the record the question of some recommendations about how to go further on structural changes that might m

the task now is to implement the tools under dodd-frank. you have to distinguish between what you have to do in a crisis and what you do to look at what were the causes of the fire? how do we prevent this from happening again? >> it appears that some of the smaller banks are having trouble paying some of the tarp money back. are we setting them up by continuing to ask them to pay a higher rate? >> that is a very good question. they are not obligated to pay it. they have to have the approval of the regulators in order to pay it. as a result, many of the regulators have said, you should not pay this. you need to conserve your capital. that is fine with us. we do have a number of banks to have not been paying their dividend, but we look at the rate at which banks better in the program are paying dividends on preferred stock versus those outside the program, to the extent there is data, what we found was 11% of the banks in the program were not able to pay the dividend. >> i wanted to return to -- i know several of you have talked about how thi

i've heard a lot about you although i came into the job just after dodd frank was passed. it seems to me like this is a crowd that would like to know whether you would be interested in running the bureau if you had the opportunity. [laughter] >> i certainly think that people here would approve and they would love to hear whether you are available for the job. >> nobody's listening. first off let me just say i'm thrilled we have such a thing as a full-time reporter on the consumer financial protection bureau. [cheers and applause] >> the only one, by the way. >> no. that's terrific. i am loving being back in ann arbor with my family and i love a wonderful two years in washington. so i'm happy to be where i am. >> hi, michael holt. first i want to endorse the idea that you should consider coming back to d.c. but i had a specific question. i was intrigued by the rule on federal -- the new treasury rule on federal benefits going into approved or accounts with certain specifications. how will that consumer says here's the account i want it deposited to. how will treasury ensure

under our regulatory dodd-franc requirements -- dodd-frank requirements. will that give as it did -- will let it is a disadvantage? >> the mentally requires the capital be greater than it was as of last summer. >> that is good news. in your most sobering comment, "until we see a sustained period of job creation, we can consider the recovery to be truly established." i would like you to comment on how we reconcile the reality of a jobless recovery. with persistent stagnant wages, 90% of workers over the past 20 years with the statement that the recession is over in a sense, with such high employment and sustained stagnant wages, it appears, for 90% of our population. >> the recession is only in men -- is only over in a technical sense. it does not mean that we are back to normal by any means. growth has been about enough to accommodate the new entrants to the labor force. therefore, the effects on the unemployment rate have been very moderate. says demand for labor is weak, then it is weak as well. >> mr. chairman, it was reported yesterday that the fed has

i don't think that was in dodd-frank an that's where the o.c.c. comes from and they would say there is no legal authority. >> i would have to get back to you on that. again, i think the servicing is part of the contract, part of the mortgage contract. what rights does the borrower have and in particular a mortgage which can be restructured efficiently is a better mortgage than one that can't be restructured. >> all things afleed but if you could get back to me on that point. back to the issue of the mortgage market, you issued a report with regard to risk retention issues, some thing is totally agree with. risk retention is not a panacea as far as dealing with this and reform should be tailored by asset classes, and it could impact on credit availability if not done correctly. as i understand it, there's going to be a phase in of this as it goes through a multiyear opportunity to phase them in. does it make sense when we realize we're dealing with asset classes and it could impact credit availability that really the regulators in this area go slow

[applause] >> thank you. >> you didn't name one of the real victories in the dodd-frank bill.the treasury was largely responsible which was the remittance bill that significantly provides protection for remittances than by people living in the united states to find countries in area where this has no protection at ever and has dramatically new and great protection. i do have a quick question. the treasury has indeed done great things in regards to protecting social security and other federal benefits. use it a minute ago the treasury established protections for accounts into which federal benefits could be deposited, and i followed this pretty closely and must have missed something because what i see is the protection on garnishment, protections for prepaid cards, the new protections or ongoing indirect express, but is there a regulation -- >> i did mean the card based accounts. there is no general treasury rule without and as you know they're going to be completely covered by the consumer financial protection bureau. so the rules and regulations the will come in that area and

under our regulatory dodd-franc requirements -- dodd-frank requirements. will that give as it did -- will let it is a disadvantage? >> the mentally requires the capital be greater than it was as of last summer. >> that is good news. in your most sobering comment, "until we see a sustained period of job creation, we can consider the recovery to be truly established." i would like you to comment on how we reconcile the reality of a jobless recovery. with persistent stagnant wages, 90% of workers over the past 20 years with the statement that the recession is over in a sense, with such high employment and sustained stagnant wages, it appears, for 90% of our population. >> the recession is only in men -- is only over in a technical sense. it does not mean that we are back to normal by any means. growth has been about enough to accommodate the new entrants to the labor force. therefore, the effects on the unemployment rate have been very moderate. says demand for labor is weak, then it is weak as well. >> mr. chairman, it was reported yesterday that the fed has

what kind of changes are you expecting as a result of dodd-frank and any other changes that come outell, if you think about the business from a consumer business and then say the capital markets business, which would be the two big areas impacted, and there has been more impact on the consumer business, not only from dodd-frank, but from the card act and overdraft legislation, and then the durbin. >> the consumer protection agency. >> all of that is really baked into our fourth quarter. we started early '09 and said we've got to be transparent. we've got to be fair. we've got to be clear. all themes that the new bureau and others will agree with. so and consumer advocates agree. we started changing our practices, put out a new accounts structure that gives us a chance to mitigate the impacts of these rules with time based on pricing structures that are clear to the customer, but we supply great service and ultimately we have to get paid. 6,000 branchs, 18,000 atms, 24/7 phones. an online capability that pays half the bills in the united states, bills are paid online through us. with

now, one of the problems i have with dodd-frank is that there is implicit conceptual structure of how form markets work. and i think it strikes me as rather simplistic and doesn't really capture the complexity of what is currently going on in the marketplace. there has been a major move towards regulating the financial system and effectively to alter the market's. but what they are finding even now early on is the unanticipated consequences of the government system. for a simple, when they asked the bill signed to try to issue the asset backed security but it required by law to solidify but they couldn't get any and the reason they couldn't is there was a provision in the dodd-frank bill specifying the credit rating agencies to what type of credit rating to the legal case to show that it's some form of -- >> negligence. 66 negligence. but the fact so what happened this they quickly got the reversal where the staff were electing this issue up to the commission which effectively made the provision in dodd-frank mou -- moot to read and we saw the fixing of fees with the site and masterca

and is there a body out there remember the dodd frank financial reform bill that was passed last year you know the one that tried to instill new regulations on wall street so that we wouldn't have to a repeat of the crash that we're all still suffering from it's the one that many critics said didn't go far enough and reining in the banks but republicans are now getting ready to dismantle it that's right yesterday house republicans very quietly introduced five new bills to take down key portions of the franc bill and they say they're doing it because wall street reform has been detrimental to economic recovery aka it's all about jobs let's be honest here is this just because they're in the pocket of the banks joining me from our studio in new york this morning comstock editor of cluster stock at the business insider already thanks so much for joining us tonight now i think it was really only a matter of time until we saw this happen right until we saw the republicans go after another piece of legislation that has defined the obama administration but let's talk about how differently the

it is harmful to recovery. >> i don't think it has very significant -- remember the dodd frank is not scheduled to be implemented by the regulatory agencies until july. extraordinary amount of regulatory rooms required in the dodd frank is swamping the regulatory agency. if we had -- they require adjudication a couple of hundred required the down trend. one of the problems i have with the dodd frank bill is that there is implicit conceptual structure of how markets work. i think frankly is it is rather simplistic and doesn't really capture the complexity of what indeed is currently going on in the marketplace. there has been a major move towards regulating the financial system and effectively to arbuckle -- alter the metrics. what was going on was whatt cf1 op an asset backed security. aha the fact that they're subject, car we learned a lot, the issue of to the commission which effectively provisioned dodd frank and won't. we saw something in fixing fees that there was a wonderful day when mastercard stock prices collapsed. what caused it? the implementation of dodd frank, allocations

at the same time, the dodd-frank act is significantly expanding the sec's responsibilities. in addition, we are also charged with enhanced supervision of rating ago says, heightened regulation of asset-backed securities and the creation of a new whistleblower program. for these reasons, i'm concerned without additional resources we will not be able to fulfill these responsibilities in the manner which congress intends and the american people deserve. finally, i would like to address the issue of former general counsel david becker's role in light of his mother's ownership of an account at may dow that was closed years before the fraud was revealed. mr. becker informed me, i believe shortly after he arrived in 2009, that his mother had had an account with madoff before she died, and it had been closed a number of years before he returned to the agency. it did not strike me that his mother's account, closed years ago, would present a financial conflict of interest. mr. becker was and is an experienced attorney who had served as general counsel under three chairmen, and i relie

we gave that agency significant new responsibilities under the dodd-frank act in particular to oversee the previously unregulated derivative markets. that's an enormous undertaking that everybody agrees is necessary after seeing the role that unregulated derivatives play in the financial crisis. in closing, i would strongly suggest to my colleagues that if self-funding makes sense for the p.t.o., it makes sense for the s.e.c. i'm not going to call up my amendment now or my bill now, but i urge my colleagues to support this commonsense proposal that senator reed and i are pushing and ensure that it gets a full hearing in the senate. and, mr. chairman, i thank you for your time and attention. mr. president, i yield the floor and note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call: the presiding officer: the senator from new york. mr. schumer: i ask unanimous consent the quorum call be dispensed with. the presiding officer: without objection. mr. schumer: mr. president, i ask unanimous consent that at 11:00 a.m. on march 2, the senate proceed to

the task now is to implement the tools under dodd-frank. you have to distinguish between what you have to do in a crisis and what you do to look at what were the causes of the fire? how do we prevent this from happening again? >> it appears that some of the smaller banks are having trouble paying some of the tarp money back. are we setting them up by continuing to ask them to pay a higher rate? >> that is a very good question. they are not obligated to pay it. they have to have the approval of the regulators in order to pay it. as a result, many of the regulators have said, you should not pay this. you need to conserve your capital. that is fine with us. we do have a number of banks to have not been paying their dividend, but we look at the rate at which banks better in the program are paying dividends on preferred stock versus those outside the program, to the extent there is data, what we found was 11% of the banks in the program were not able to pay the dividend. >> i wanted to return to -- i know several of you have talked about how thi

the durbin amendment to the dodd-frank bill will limit the cost of bennett card transactions. by now it is proposed to 12 cents per transaction, a 75% reduction. this amendment is supported by the national federation of retailers and retail associations across the country. it is somewhat controversial because there is some concern that 12 cents may be too low. but i am really confident that something can be worked out that a compromise. if it is too low, it goes up a little, if that is necessary. but at the same time a reduction in the cost of debit transactions, which total about $12 billion to $14 billion a year -- that money will stay in our local economies. right now, there is a lot of media attention about this money going up into the banking system, and the banks responding by limiting your ability to use your debit card to $50 or $100. a consumer said that if a bank did that, they would eat their debit card. the are not really thinking that is going to happen. i do want to remind the public that the money that stays in your community is circulated in your community. any

the task now is to implement the tools under dodd-frank. you have to distinguish between what you have to do in a crisis and what you do to look at what were the causes of the fire? how do we prevent this from happening again? >> it appears that some of the smaller banks are having trouble paying some of the tarp money back. are we setting them up by continuing to ask them to pay a higher rate? >> that is a very good question. they are not obligated to pay it. they have to have the approval of the regulators in order to pay it. as a result, many of the regulators have said, you should not pay this. you need to conserve your capital. that is fine with us. we do have a number of banks to have not been paying their dividend, but we look at the rate at which banks better in the program are paying dividends on preferred stock versus those outside the program, to the extent there is data, what we found was 11% of the banks in the program were not able to pay the dividend. >> i wanted to return to -- i know several of you have talked about how thi

and under the dodd-frank act, these new margin requirements would take effect as soon as july. but the cftc must begin the rulemaking process now, because if we don't and you get into the summer driving season, you know what's going to happen here. and this is march. it's just going to keep going up and up. now i want to be clear, where those who have a legitimate reason like airlines, like shipping companies, like oil companies, to buy future contracts, that margin level would not apply to them. it would only apply to the speculators, imposing a higher margin on speculators it's consistent with exchanges practices. for example, the new york mercantile exchange, it's the major trading platform on oil futures. it imposes different margin rates on speculators as compared to bona fide hedgers. so, mr. president, anybody that's been at the gas pump recently knows that this is a real issue, and they're asking us to do something about it. and then we hear in return, it's supply and demand. i'm trying to prick that balloon and bust that bubble. congress and administration need to be o

small and mid-size banks face "substantial challenges" in complying with new regulations from the dodd- frank financial overhaul law, but he added that the reforms are tougher on big banks because of strict requirements. $300 billion is the japanese government's first official estimate of the cost of the earthquake and tsunami. japan also said today radiation has spread beyond the area surrounding its crippled nuclear power plant. the city of tokyo says its drinking water isn't safe for infants because radiation levels are double safe limits. it's urging residents to refrain from hoarding bottled water. separately, toyota motor said it will halt some north american production because of parts shortages in japan. it's not sure how many shifts will be down, or for how long. >> tom: still ahead, as seen with this week's big telecom deal, big buyouts are alive and well, and that has tonight's "street critique" guest buying the bankers behind the buying. hilary kramer joins us. >> susie: a very big name on the witness stand today at the raj rajaratnam insider trading trial-- lloyd blankfein, c.e.o

the dodd-frank reform act has given us our new first baseman. a new agency charged with protecting consumers in the credit and financial markets -- the bureau of consumer financial protection. i know some of you out there are going to argue that playing first base is for big hitters who cannot handle the outfield. i humbly disagree. as the first basement of the st. louis nationals nearly 100 years ago, the clever first baseman knee's all the speed, the arm, and the head is compressed into service. let me add to that -- be reached. an effective first baseman should have long arms. the new bureau will present all of that. it will have rulemaking authority with regard to unfair, deceptive, or abusive practices by banks and pretty much anyone else providing consumer financial products or services with a few key exceptions. the bureau will have the right to examine the books but most of these institutions and of enforce the laws against them if they are found to be in violation. most importantly in this town, the bureau will have a substantial budget

under the dodd/frank financial reform law, lenders are responsible for some of the credit risk from the loans they sell to investors. the goal is to make lenders more careful, but lenders would not have to bear that risk for loans that meet certain safety standards. the 20% down payment is one, but there may be others, says consumer advocate julia gordon. >> you have to have full documentation, you have to underwrite for the term of the loan, not just a teaser rate. >> reporter: home buyers who haven't saved up for a big down payment could still get a low down payment loan through the federal housing administration, but gordon says that help will be limited. >> i think everybody agrees right now that the f.h.a. has too much market share and that we don't want to create some kind of dual housing market, just one for the haves and one for the have-nots. >> reporter: following the housing bust, lenders have already tightened their lending standards. the mortgage bankers associations steve o'connor fears the new requirements will make it even harder to get a loan. >> we don't want the pendu

dodd-frank. where the critiques of dodd-frank is it's going to make it too hard for people who would otherwise be good borrowers to get alone, and is going to make it too hard for home builders to get credit. could these regulations be too onerous for the fact that credit is needed to move the market? >> it's always a balancing act, and i guess what i look at it, my gut reaction would be no. next question? no. [laughter] >> we have some more. >> know, i think that, thinking about, to me the most meaningful economic analysis of what happened, got us into this mess was the underpricing a brisk. and yes, i am a more left-leaning progressive economist, but i still believe, and always will, when you screw up prices all hell breaks loose. and if you screw up the price of risk, you're asking for it. and we asked for. by we i don't just mean by any stretch of imagination the public sector or the gses. this was initially a very much, i risked underpricing that you would see all throughout the private sect

in addition, we are looking as required, both by the agreement and by dodd-frank to have additional capital for systemically significant banks. we're looking at how best to do that. we based our -- we agreed with the consensus of about 7% high quality capital based on looking at worst case losses to banks over the last 50 years, and it was our assessment that in particular, that that amount of capital would have prevented any banks from failing in a crisis that we just suffered through. so although there's more to be done in terms of adding some additional capital to the most systemically significant banks, i do think that we've made a lot of progress and i don't agree with the view that this is likely to lead to another crisis. >> do you believe that it's very important that any bank are strong regulators, strong capital and good strong management will generally survive? >> yes. except in the worst economic conditions. i should add we added a leverage ratio which now will be international, not just for the united states. >> how would that rk? >> well, there's a leverage ratio which will ap

dodd-frank. where the critiques of dodd-frank is it's going to make it too hard for people who would otherwise be good borrowers to get alone, and is going to make it too hard for home builders to get credit. could these regulations be too onerous for the fact that credit is needed to move the market? >> it's always a balancing act, and i guess what i look at it, my gut reaction would be no. next question? no. [laughter] >> we have some more. >> know, i think that, thinking about, to me the most meaningful economic analysis of what happened, got us into this mess was the underpricing a brisk. and yes, i am a more left-leaning progressive economist, but i still believe, and always will, when you screw up prices all hell breaks loose. and if you screw up the price of risk, you're asking for it. and we asked for. by we i don't just mean by any stretch of imagination the public sector or the gses. this was initially a very much, i risked underpricing that you would see all throughout the private sect