i assure you it would not be anything resembling dodd frank. also the ranking member of our committee at the time spencer baucus put forward a program where central to the program would have been an enhanced bankruptcy regime for a large globally connected financial institution which i think as you well know was part of the financial choice act as well. so bankruptcy versus bailout, that would've been a key difference. and i think hopefully what we would have done is with respect to federally insured depository institutions insist upon high levels of capital in which -- with respect to wherever we had a federal backed stock. to mortgage insurance or nbs. that we would insist upon traditional historic prudent underwriting standards and again for higher levels of capital. than what we saw in the marketplace and you know better than most. it would take a microscope to have observed the capital level . fannie and freddie were not discernible to the naked eye of humankind. i think i just made that up. >> that about does it i would say. the congressm

throughout most of dodd-frank. so i think with 2155, hopefully we've arrested that before it was too late. but so much more remains to be done. mr. wallison: turning to things hat are most current, you've introduced the path act but at the same time you have expressed an interest, for the first time in my knowledge, of allowing the government to continue to guarantee something in the housing market through your agreement with john delaney. that was a surprise. to me and others. mr. hensarling: but you invited me anyway. mr. wallison: we would always invite you because you've always got a good answer for these things. why sit that you made this change in what has been as you described a very conserve tiff, nongovernment view of how the economy should work? mr. hensarling: my principles haven't changed but my time horizon has changed. and my rate of time preference, you will, has changed. since as you pointed out, i am leaving office. so i'm not sure who the patron saint of lost causes is, i'm not catholic, but betwe

us president donald trump has long been a critic of dodd frank he maintains that the regulation goes too far these reforms are back in may he scrap some of the rules for small and medium lenders. the legislation i'm signing today rolls back to crippling dodd frank regulations that are crushing community banks and credit unions nationwide they were in such trouble one size fits all those rules just don't work. before trump's rollback all banks that had fifty billion dollars of capital had to take part in stress tests. under the new measure only banks that have two hundred fifty billion dollars or more are subject to the tests but many on wall street want the deregulation to go further they want more flexibility and in other words the freedom to take more risks critics say easing restrictions on banks could prompt the next financial crisis. and for more i'm joined by john jordan u.s. economist and advisor to multiple presidential candidates including the current us administration good to have you with us someplace tell me how healthy is the u.s. banking system ten years on from the cri

dodd-frank had far more good aspects than bad, but there were a number of foolish provisions in dodd-frank, one of those does restrict the federal reserve's ability to assist a troubled institution. >> what do you worry about in terms of the next crisis, when you think about the banks that are your clients >> i would think the one existential threat remains cybersecurity. all the capital and all the liquidity, all the resolution plans in the world do not work if the customers cannot access their money, if the bank cannot access its systems so cyberis one, two, and three among the worries. >> given what you know about the cybersecurity plans, if you will, or strategies around security, do you feel like we're safe >> i do not. the banks actually have done an

my next guest, co-authored the dodd/frank wall street reform and consumer protection act. chairman of the senate banking committee we thank you for being here. there's a lot to talk about. ten years later. i want to talk about the bill and the conversation we actually had with mick mulvaney clearly there is efforts to upend at least parts of this legislation. >> no question about it, yeah. >> but i want to go back ten years for a moment we were with hank paulson last night and ben bernanke and tim geithner at a brookings event. what was the worst moment for you? when you were taking calls at 1:00 in the morning. right? >> yeah. that was -- we had a meeting on september 18th which was that meeting in nancy pelosi's office when i think either bernanke said unless you act, the entire financial system of this world will meltdown. and so several days went by, or time, not too long we received at 1:30 in the morning, shawn maher called me saying we just received a bill that says give me $700 billion no court, no regulator could intervene. had we floated that, of course the countr

the truth is, even the big banks don't really want to change dodd-frank now. they have come to live with it. they have come to accept it. the banks are in a much better position. this is a theological thing with republicans. they think all regulation is that anytime you have a regulation, they call it job killing. our financial system is already too big relative to the economy, too rich, too powerful. the idea that it has to be richer and more power, i think we could do with less financial innovation these days. power, ik we could do with less financial innovation these days. host: our guest, can american capitalism survive? white greed is not good, opportunity is not equal, and fairness will not make us poor. caller: good morning. i wanted to say thank you to mr. perlstein. he is a very good conveyor of this information that a lot of people don't understand. i wanted to mention and see if there are any responses. i know he is not here to manage my portfolio. him what heask thought about this. my husband and i will be retiring. when you say retiring, that is s

president donald trump has long been a critic of dodd frank he maintains that the regulation goes too far these reforms are back in may he scrap some of the rules for small and medium lenders the legislation i'm signing today rolls back the crippling dodd frank regulations that are crushing community banks and credit unions nationwide they were in such trouble one size fits all those rules just don't work. before trump's rollback all banks that had fifty billion dollars of capital had to take part in stress tests under the new measure only banks that have two hundred fifty billion dollars or more are subject to the tests but many on wall street want the deregulation to go further they want more flexibility and in other words the freedom to take more risks critics say easing restrictions on banks could prompt the next financial crisis. now more flexibility more lending more risks well which been there before back in two thousand and seven the subprime mortgage crisis came to a head in the u.s. so let's take a moment and look back at the events that led to the financial crisis. mortgage

a year and a half later we passed dodd-frank. at is an issue that will loom large -- debt is an issue that will loom large. vonnie: do you see any threat with deregulation? senator dodd: the dodd frank bill is basically intact. -- the banking senate committee today passed legislation -- i did not like every piece -- but overall it was a moderate effort to make some changes to the bill. i have always said, we did not write the 10 commandments in 2010. we wrote a bill. i agreed to amendments. i was not overly enthusiastic. they clearly changes. with the benefit of 10 years, we can see where we will moderate that and where will it work better? with the benefit of 10we have ps necessary to minimize the danger of major financial collapse, such as 2008. julie: at the same time, although many of the same people are in place in government, as you know, things have become more acrimonious when it comes to the president or within congress itself. if we were faced with another crisis of financial or otherwise, what do you think is the capabi

with the dodd frank act didn't do a separate banks. an act of 1933 and the height of the great depression which was designed by the government as well as by the makers to separate the deposits and loans of people and companies from all the security's creation trading and speculative activity so that our deposits and loans would it be the collateral for all the other stuff and so would therefore when there was emergency it couldn't be the collateral for the requirement of extra help in that emergency. that hasn't been done or could i wasn't a part of dodd frank. bringing it back in a modern form was on the platform about the democrats and the republicans in the 2016 election. but, it has been pushed. republican sort of dial to back from it and democrats also dialback. there is an act-- bill called hr 790 in congress that's been going around the house about 70 or 80 signatures across the aisle that acts to reinstate the siegel act in a similar act going on any bill in the senate that's championed it to do the same thing on a bipartisan b

the dodd frank bill is basically intact. mike crapo passed a piece of legislation.n't like every piece of it, but overall it was rather moderate effort to make some changes to the bill and candidly of always said we didn't write the 10 commandments in 2010, we wrote a bill and their amendments i took and agreed to. clearly changes in the benefit of 10 years we can look and see where we moderate that to some degree and make it work better. i believe fundamentally we provide the tools necessary in this environment to minimize the danger of a major financial collapse such as we saw in 2008. erik: lessons from the fall. what we learn from a financial crisis and what do we still have to fear. this is bloomberg. ♪ erik: you are watching a special life after lehman addition of bloomberg best. so much has changed in global finance since 2008. much of it in response to the collapse of lehman brothers and the crisis of ignited. some problems remain unresolved and other issues are the unintentional consequences of solutions in post 10 years ago. the crisis is a longtail and we

that is not permitted anymore under dodd-frank.reasury department in the tol of 2008 provided help money market mutual funds, part of the shadow banking system. an alternate way for people to save and invest. permitted the be same way today as it was then. three of the crucial firefighting tools don't exist. >> we have been talking to well-known investors during the financial crisis. getting their perspective of where we are. you did, too. what were his observations? >> he does not think we are on the verge of a crisis. bubblets out several indicators are flickering, but not flashing. bridgewater has the depression on in 2008. clicked it is not on now. when we do have one, many years from now, he shares the concern geithner that tim we lack those firefighting tools. >> one of the influential folks that he talked to was tim geithner. he founded bridgewater, the world's biggest hedge fund and he is one of the most influential voices on all things financial and all things -- we wanted to hear more. >> he doesn't think that we are in a

dodd-frank did one thing in 2000 pages.ake it a little more difficult to deal with a certain kind of panic because it is the power of the panic, this will end and now, that has been diminished and that was mistake. ♪ ♪ this is "bloomberg best. i am eric schatzker. earlier this week, i spoke with ray dalio. others, he has concerns about shadow banking as the potential catalyst for the next financial crisis and he worries that policy makers may not have authority to cope with it. here is what he told me. ray: i do know the regulations do not provide the freedom to deal with those things well. erik: the regulations we have today? : right, because we are trying to write the laws in such a precise way for some things that are unknown. i think there should be an -- economicwer powers act in which if the president of united states, the head of the federal reserve, and representatives of two houses of congress all agree that the circumstances are not properly anticipated in the law could, with agreements, have special powers to do

the dodd-frank bill is basically intact.y good member of the banking committee today tasked with of wrestlers in. i didn't like every piece of it but it was rather a moderate effort to make changes to the bill. i have always said we didn't write the 10 commandments in 2010. we wrote a bill. there are amendments that i took and agreed to. i wasn't overly enthusiastic about. with thechanges benefit of 10 years we can see where we can make it work better. i believe fundamentally, we provided the tools necessary in this environment to minimize the danger of a major financial collapse such as we saw in 2008. still to come, lessons from the fall. what we learned from the financial crisis and what do we still have to fear. this is bloomberg. ♪ you're watching the life after lehman edition of bloomberg best. much of it in response to the collapse of lehman brothers and of course, the crisis is ignited. unresolvedms remain and other issues are the unintentional consequences of solutions imposed 10 years ago. crisis has a long tail an

trump: dodd-frank was something they said could not be touched.ation gave large banks unfair competitive advantage at the expense of neighborhood banks all over the country. the legislation i am signing today rolls back the crippling dodd-frank regulations that are crushing community banks and credit unions nationwide. david: we welcome bloomberg's senior finance reporter. and the federal reserve governor oversaw dodd-frank in the wake of the financial crisis. start with you. we will get to some of the regulations and changes to the banking system, but what is left in the dna of the economy of the financial system because of this wound we suffered 10 years ago? ken: well, david, i was thinking this morning, the coincidence of 9/11 and the 10th anniversary of lehman just shows how much our perceptions have changed. 9/11 changed our perceptions of our vulnerabilities as a nation, our place in the world. writing the financial crisis changed our perceptions of the the degree toy, which it was dependent upon debt, and the degree to which the financial

one could argue that within dodd-frank, the franken amendment to the s.e.c. on credit rating was some of that and said, it actually said you shall do this unless you think otherwise. which is is kind of a creative way to say may and you'll notice that the s.e.c. has always found a way to think otherwise. whether you agree or disagree with franken, congress kind of set up that structure to allow the s.e.c. to avoid it. read hoepa. the fed shall promulgate rules. they didn't. mr. wallison: any other comments from the panel? go ahead steve. steve: so i was a fed staffer at the time that the crisis was building and then broke. working on economic forecast. i had as much access to the data on what was happening in the pousing and mortgage markets as anybody i think at the fed. i don't think it's correct to say that the fed understood what was going on and deliberately decided not to regulate. i think we were operating with much, much less information in real time about what was really going on. i mean, otherwise it would have been impossible for bernanke to go up

about glass steagall that was sort of redone partly as a thing called the bowker rules part of dodd frank that changing the difference between commercial and investment banking explain where that is well where that is is that the regulators did approve a rule that became final in two thousand and sixteen you worked on that i voted on it you voted on it it's a very complicated rule public citizen and the progressive organizations did not like that rule in particular it was overly complex again this rule says that banks should not gamble especially with taxpayer backed f.d.i.c deposits they should be engaged in the difficult boring business of making loans. the the the liquidity. that was threatened hasn't really appeared and yet the banks want this relaxed and as we speak the five agencies including your former agency are busy at work relaxing that rule i hope it doesn't happen i want to ask you about the future what do you think might be the next big crisis difficult to say. if i knew i would make a beeline to the regulators and make sure there is they are aware you're different such a di

the problem with something like dodd frank was it was put in place to keep the big banks under control, it wasn't put in place to kill little banks but it did because theircompliance costs were so high and the major banks lobbied for this and got the asset level at which dodd frank applies taken very low, it was supposed to be 50 million. it was a low amount . and so we lost 1600 community banks and all we've done is make the bank of america, all we've done is make those banks much stronger than they were so regulations, the economy is like a balloon. you push in some places it's going to pop out someplace else and the problem with government regulations is government is bad and anticipating where things are going to pop out if you need to stop it and it's straightforward, you should do something to stop it, otherwise you have to leave the system alone. nobodyread that bill, nobody understands it . you're going to leave law review articles trying to explain paragraphs of the . so government regulation, there's a place for it. there's a need for it in certain instances but it should be

that has been circumscribed with dodd-frank.k upwould have to some justification for why it was advancing credit today. it could single out one financial institution. it would have to save a whole class. carol: what are the others? peter: the fdic issued a blanket guarantee of all bank liabilities. banks are liable to depositors, covered by deposit insurance. this ensures other creditors to the banks don't get special treatment. but there could be a run to the banks even if depositors are credited. that is not permitted anymore under dodd-frank. peter: the treasury department in the fall of 2008 provided major help to money market mutual funds, part of the shadow banking system, an alternate way for people to save and invest. the would not be permitted same way today as it was back then. three of the crucial firefighting tools do not exist. carol: we have been talking to well-known investors who were there during the financial crisis to get their perspective on where we are. you talk to ray dalio, who runs the world's largest he

>> the big question here is dodd-frank was a framework but the real meat on dodd-frank had to be in thegulation. there were significant regulations that were passed that should prevent a precipitous bankruptcy like lehman was. lehman had six hours of bankruptcy planning. that's almost unheard of. the real issue now is, same issue that existed then, is that the government did not understand what it was regulating to some substantial extent, and the question is, in this global interrelated, complex derivative-driven economy, does the government understand where the areas of vulnerability are. that's the question. and the answer will tell you what the former chairman of -- chairperson of the s.e.c. told us, which was simply that her lawyers who were looking at the same materials that lehman was looking at, simply did not understand what they were seeing. just didn't understand what they were looking at. the question is does the government understand what's going on now. that's the question. liz: let's hope they do. but i don't think there's an answer right now. anton, thank you. thank you

title 2 of dodd-frank. but, again, the arithmetic i have in mind is the votes to obtain resolution authority were not there. i am being a little flip. i don't do conspiracy theory well. what could regulators have done? the regulators -- i think this might be where charlie and i agree is that dividends. there are lots of people that look toe dividends payment of these firms and said there is a strong case to be made that the supervisor should have basically gone to the institutions and told them, look, you either raise capital or you retain your earnings. obviously that's a whole other discussion. if you turn off the dividends, it gets hardtory raise capital. other things. the idea that people did miss things -- well, i agree with that very strongly, the idea that, you know, the public policy steps that could have been taken earlier, whether resolution authority or private capital, i think it's difficult to believe. mr. calomiris: private capital to be raised privately mr. swagel: i want to respond. i made f

administration introduced stricter banking regulations and as the dodd frank wall street reform and consumer protection act president donald trump has long been a critic of thought frank back in may he scrapped some of the small medium lenders but many of wall street one deep regulation to go even further. critics say a raising restrictions on banks could prompt the next financial crisis. it was the car that defined a generation and one of germany's most iconic brands but now the beatles' time is up for its wagon has announced it will hold all production of the con next year ending its seventy year history. a full wheeled legend it's the biggest selling car of its time with twenty two million units sold its thirty horsepower engine was the sound of germany's post-war economic boom. but it all started back in the one nine hundred thirty s. commissioned by the nazis ferdinand portia designed a cheap economical focus of people's car in one nine hundred thirty eight the first model was ready though it mainly saw military service during the war but when the fighting finally stopped the v.w. beetl

in the wake of dodd-frank and the dawn of federal supervision, it was no longer cost-effective to run a bank. this was a profitable, well-run bank that serves people in the communities i represent that was put out of business by the federal government. mr. rothfus and mrs. beatty has a bill that will tailor insurance companies subject to federal reserve oversight. the legislation will require the fed to streamline examination, procedures, and better coordinate with state insurance regulators. to be clear, the legislation does not, mr. speaker, and i say again, does not end federal reserve supervision. it merely effects the fed to better coordinate with the state and develop standards that are more ensureable for them. something congress has asked them to do for years. the gentleman from pennsylvania and the gentlelady from ohio worked together and with the federal reserve both before and after the markup to address various concerns. they are both to be commended for their efforts to work across the aisle and with the regulators. h.r. 5059 is a commonsense solution to federal overreach

dodd-frank is basically intact, the senate banking committee today passed a piece of legislation -- i piece of it, but overall it was a moderate effort to make changes to the bill. candidly, i've always said we didn't write the 10 commandments, we wrote a bill. the amendments i took him agreed to, i wasn't overly enthusiastic about. clearly changes -- we can look and see where we made it moderate. but i believe, fundamentally, we provided the tools necessary to minimize the danger of a major financial collapse such as we saw in 2008. ♪ come, lessons from the fall. what have we learned from the financial crisis, and what do we still have to fear? this is bloomberg. ♪ ♪ specialre watching a life after lehman edition of "bloomberg best." i'm erik schatzker. so much has changed in global finance since 2008, much of it in response to the collapse of lehman brothers and the crisis it ignited. but some problems remain unresolved, and other issues are the unintentional consequences of solutions imposed 10 years ago. andcrisis has a long tail, we talked about it with policymakers, economists,

now there are concerns about deregulation, dismantling dodd-frank.came in and was talking about deregulation of the banks. are there concerns we are deregulating too quickly? yalman: initially after trump was elected, it appeared that way. there was a lot of talk and an executive order to come up with ways to order to come up with ways to deregulate. looking now, it has been almost two years into the presidency. there have been some changes, but they have not seemed to really unwind the basic elements. what congress did, the only thing they did was really give some relief to small banks. dodd-frank is still there. 95% of the elements are still intact. not much has changed. has the stress tests they continue to do so deregulation has not happened as much as some feared it was going to happen, but it can keep going on. in other words, especially if things are nice, that is what happens. we forget. we forget in 10, 15 years how bad things were, and then we say we did too much. everything looks fine and let's deregulate. that is the fear. things do not g

the congress in this term has voted for the first time on community bank relief for dodd frank. the second bill now moves to the house. , overwhelmingly bipartisan votes. the question is, on whose agenda was that? it was on the agenda for the current leadership. the things that tom was talking about would displace those kinds of common sense reforms. it is not that the reforms are not bipartisan. they are. the question is to make sure these kind of things get a vote? we have a senate race that needs attention. i do not believe i have been an endorsement from the chamber on that race. correct me if i am wrong. i think we have. tom: i'm pretty sure we have. why don't we come back to you in three minutes? linda: isabel from inside the u.s. trade. you mentioned the support of a tripod nafta deal. i wonder if you could elaborate? what are you hearing from a congressional perspective and what are the contingency plans at least initially? what it me give you think the requirements are. if canada does not come into the deal, there is no deal because you cannot do a deal with mexico the

we are seeing more deregulation, an overhaul of the dodd-frank. is that a risk?l: the lessons from the crisis had to a large extent been sort of encapsulated in institutional frameworks. mentioning dodd-frank, i think how do youcus is stop a financial crisis from happening? make sure the banking system is holding better assets, make sure they have enough liquidity, make sure they have enough equity. macro prudential policy. the other lessons were what do you do when you get into a financial crisis? the focus was much more on the idea of getting rid of too big to fail, orderly liquidation. do not have a lehman-type event. the lesson that was underappreciated was how important in a financial crisis it is to have a lender of last resort, the fire brigade which can put out the house if it is blazing. the lessons learned there have not been internalized as much as one would have hoped. it's: you know, interesting because on the one hand, we look at things like capital buffers for banks, and clearly, we are in a more resilient place than we were 10 or more years ago, b

a full seven years since dodd-frank. during that time, congress received minimal testimony on regulatory issues from the fed. typically other officials who didn't oversee regulatory efforts gave testimony in this regard. but the key point is, dodd-frank requires only the vice chair for supervision to give that testimony. while we're grateful that other fed officials decided to speak to congress on regulatory issues, they didn't have to under the law. my bill would prevent that situation from arising ever again. under my bill, there is no -- if there is no vice chair for supervision, either the fed chair or their designee will be required to give annual testimony on regulatory matters. it's that simple. and as a result, this bill passed unanimously out of the financial services committee. it de-- despite the simplicity this bill is about the oversight authority of congress and constituents we represent. it remains vitally important that we and our senate friends hear from these agencies. not only that, we should hear from

i don't think dodd-frank changed.ank of america, we wouldn't let them go. >> we didn't deal with the problem of derivatives. >> by the way, all that extra capital wouldn't save you in the middle of a meltdown. >> jpm has 2 $1/2 trillion of assets in management, that was 1.3 million impenetrable balance sheet by jpmorgan and jamie dimon. banks are bigger now, maybe they're bigger to fail. neil: did you ever think we would lose 5 trillion in financials on a day. >> they are the ones who didn't see it. so it is impossible for them to fix it. talking about derivatives of derivatives. they don't understand this. two people in the market, dod and frank missed it, and you put dodd and frank in charge to fix, it they didn't fix it. >> we're in the era of living wills. wouldn't you think the banking system is safer? >> all the risk from the private sector to the public sector balance sheet. not seeing a derisking of the global economy. neil: we patched debt problem with debt, right? >> we're going to have trillions in debt. ne

dodd-frank,nks to regulators have better tools to deal with the failure of any large financial institutionwithstill needs to be done the shadow banking markets, the money market funds, the wholesale lending market, the so-called repo market. when i came to washington fannie and freddie guaranteed or insured roughly half of new mortgages in america. today, well over 90% are assured by the government. today it is worse. find this up all right to even think about keeping fannie or freddie in conservatorship because i think we are sowing the seeds of a future crisis. >> the housing market stirring to life. are we creating a system where citizens are dependent on the government? >> we are creating another historic mark on home sales for june. >> there might be another bubble forming here. hank: overall do i believe our financial system is stronger and better regulated and the banks are better capitalized? i sure do. for good or for bad, i don't tend to look back. i tend to look forward. >> we have the same thing replying with europe the trigger this time. >> the debts are staggering. >> we are

i know you have been very active in pushing for scaling back some of the dodd frank regulations. having maxine waters as chairman of the financial services committee. what would that mean for your financial services company members? tom: one of the things that interest us a great deal is the agenda that would be broad to -- brought to the congress. if the democrats took over the house, or the senate, and you can make a lot of those judgments yourself. you can see it in your question. my concern is if i am listening to everything that i hear the people particularly in the senate talking about, free health care for everybody and on and on with all the. aggressive -- the very progressive activities they promised a were going to bring us, i worried about our economy. but i am worried about it in the pieces that we were talking about. what happens to tax reform, what happens to regulation? what happens to the quiet problem that we promised each other all the time that we were going to get involved in as soon as the next election is over. that is entitlement. at the end of september, w

by the way, dodd-frank, a little thing, i fixed it. dodd-frank has been changed.are canceling obama's illegal, anti-coal, so-called clean power plan. it sounds so beautiful. you know what that means. when i did it, this sounds so nice, clean power plan. there is only one problem. it doesn't work. it doesn't work. it will put our country out of business. it took away our greatest natural resources. we couldn't do anything with them. it was such a pretty term, clean power plan. it's out of business now. we are going to have clean power but it's not going to be under the clean power plan. and we are strongly protecting our public lands for hunters and fishermen and everyone who loves the outdoors, like my son don, who comes here a lot. [applause] my son comes here a lot. you know that. a lot of you know my son who comes here. he loves hunting. we passed veterans choice giving our veterans the right to see a private doctor if they have to wait in line for the rest of his life. and we also passed the landmark .a. accountability act. they have been trying to pass both o

that and a couple other reasons, dodd frank, dynamics, may make out, if i can win come a would be pretty -- a pretty big honor to serve. a different way to defend the constitution than i ever thought i would get a chance to do. we put together a campaign where the manufacturing companies, we did not have a full marketing department. but we had a marketing firm. a young lady, probably 15, 20 years younger than me. good at connecting with all the ways to do media and everything. she came on to help do the marketing piece. she is not a republican, she has never worked on a political campaign care we didn't like we were launching a product. only the uncomfortable part was i was the product. [laughter] host: did you have to have an fda sticker on your back or anything? [laughter] rep. davidson: plenty of rules though. host: you run, having an engaged in politics, i remember your race, getting phone calls with people saying you were the guy we needed to get behind. to see boehner and so much of the washington establishment mobilize against you, i guy who had not been a politic -- been in polit

dodd/frank is a disaster dodd/frank purported to be the response to the financial crisis it unfortunatelythe law of the land the notion it's going to protect us from the next one is ridiculous >> why is a a disaster >> it is a complete mist that you could orderly -- in an orderly way unwind a major financial institution. you couldn't unwind lehman under title 2. shouldn't that be the test case? right? and there's one key critical piece that's missing it depends on international nations. what happened in lehman? the british said no. now, what would happen today they could say no. there's no treaty in place, there's no enforceable provision. >>but i doubt there's anything the united states could do unilaterally to make any of that happen maybe it's not a bad exercise. >> if you're going to order that, get the treaties underneath it. >> is the answer to just raise hands and say there's nothing we can do these are global institutions. >> i think quite frankly the effort should have been placed on amendments to the bankruptcy code. >> bankruptcy works. it's ugly, but it works. and it's not a p

to prevent a repeat of the crisis, congress passed a series of measures known as the dodd—frank, wallmposed much tighter restrictions on the banks and the financial markets. with a series of measures to protect consumers. but earlier this year some of that regulation was rolled back the trump administration. said let's start by looking what was in place and how it changed this year. previously, all banks worth more than 50 billion us dollars were required to undergo stress—tests to determine whether they could weather a similar financial storm... now, only banks worth 250 billion dollars are committed the test. which means small institutions like american express and barclays are exempt. in fact fewer than 15 us banks now have to take a stress test. dodd—frank also imposed strict guidelines on lenders — they had to ensure a borrower could actually pay back their loans. now, smaller banks can loan to people who have weaker credit ratings. one of the cornerstornes of the 2010 act was to stop big banks making risky investments with customers' money. us regulators are now trying to water

his got so focused on committee on flood insurance reauthorization and the rewrite of dodd frank. so they ran out of time and space. i think that issue will carry over to the next session. >> is this a shy group? there you go. >> saw something the other day about may be making the tax cuts and tax reform permanent? >> that's coming up the last week of the month. -- help me.ns is when is the market? is a tomorrow? yeah, it's any day now. we have been having scheduling problems. ways and means will have a tomorrow. we are not in next week. to make the individual provisions permanent. cbond so, again, given that report, we can afford that? >> the think the economy could use a huge tax increase? if we were to let those tax increases occur, we would be taking the small business pass through tax rate at two 44.6% when corporations are 21%. that would be devastating for this economy. >> will your colleagues in the senate agree? >> i hope so. [laughter] it's not reconciled. we will see. >> other questions? go ahead. is this a health care hospital question? [laughter] >> it could be. may b

dodd frank is really a mixed bag.santee, it did some good things ex-post it did some bad things >> last word to you. reacting either to what hal said or what you think the whether you believe the balganization of regulatory agency and regulatory capture of agencies in congress by lobbyists is the biggest threat that might lead to another crisis >> i agree with what hal is saying if you think about the contrast that the european union and the crisis and, therefore, the recovery, and then the fed which did top and so forth, and it was a faster recovery in the u.s a lot of that had to do with the fact that in the u.s. it was possible to improvise new tools and new ways of sticking band-aids on the system -- it wasn't clear that it had authority to do something like aig, but there was room in the law to go do it. in europe because there were more constraints, that was not the case i think it shows you the discretion is the key thing when you have a crisis. >> gentlemen, thank you very much great discussion really enjoyed

rolled back largely for smaller banks inside the united states who really the cost of compliance for dodd frank was prohibitive for a smart of for smaller to midsized banks and basically all that was functionally was a protection scheme for big banks who could afford the compliance the compliance costs involved but again the you know it's amazing how we worry about shutting the barn door when the cows already out the real threat in the near long term is is is publicly held debt and i stick by that and it's scary and it's and it really scares me ok well that's worrying then don't join us economist and also advisor to the current u.s. administration thank you so much for your time my pleasure. it was the car of the find a generation and one of germany's most iconic brands but now the venerable v.w. beetle time is coming to an end fox has announced it will halt production of the beetle in twenty nineteen bringing an end to the cost a seventy year history but it's not all bad news for people fancy w. will release two more editions of the cult car before the beetle rides off into the sunset. this is

frank -- the rewrite of dodd frank. the path act, they ran out of time and space. it takes a long time to get consensus. i think that issue is going to carry over to next session. host: is this a shy group? there you go. >> i saw something the other day about making the tax cuts and tax reform permanent. rep. ryan: that is coming up the last week of the month. ways and means, is the markup tomorrow? i know that was any day now. we had some scheduling issues lately. we are marking it up tomorrow, we will have it on the floor, we are not in next week. to make the individual provisions permanent. host: given that report, we can all afford that? rep. ryan: do you think the economy could use a big tax increase? i don't know if you're businesses are pass-throughs, if we were to let those occur, we would be taking the small 44.6%ss tax rate up to while corporations are at 21%. that would be devastating to this economy. we want to make that permanent. host: will your colleagues agree? rep. ryan: i hope so. it is not a reconciliation. host: any other questions? go ahead. re

jeff got so focused in his committee on flood insurance reauthorization and on the rewrite of dodd-frank. so the path act just, they just ran out of time and space. and it takes a long time to get concensus on what you spin the gse's off and i think it's going to carry over to the next session. >> this is a shy group? >> there you go. go ahead. >> saw something the other day about maybe making the tax cuts and tax reform permanent. >> yeah, yeah, that's coming up last week of the month. ways and means is-- help me -- when is the markup in some in thank you, bob. i know that markup was any day now. we've had scheduling issues lately so ways and means marking it up tomorrow, we are going to have it on the floor. we're not on the floor next week, week after next. to make the individual provisions permanent. >> and so, again, given that cbo, we can aboard that? >> you think the academy could use a big huge tax increase? i don't know if your businesses or-- if we were to let the tax increases occur, then we would be taking the small business pass-through tax rate up to 44.6 while corporations

the overhaul of dodd-frank, do you think that's a risk?you have to be careful how far that goes. know there's a lot of pressure rule. volcker things like stress testing are absolutely necessary. very good things after the effect happen, even though the people in the treasury and the fed didn't believe as i did know that we were going to have a blow up. happened, they took very good steps in recapitalizing the off the bad loans and i think that that's keephing that we have to in mind going forward. one of the reasons you're european banks haven't come back quickly, they took their time in raising capital and writing off bad loans. also a sign, i think for asia. chance two years ago it talk about culture and conduct offront of the people's bank china. andiscussed culture conduct. conduct is key. partve bad conduct on the of banks, you see it in many this really falls out into how they deal with customers, their staff. that's what you have to watch for very carefully. made progress from last time? yes. but there's still a lot of question mark

onlybeing said, dodd-frank got is halfway there. , banks constitute a third of credit mediation. trick -- bank centric regulatory structure. two thirds of that is happening outside of the banking system. this is something we have yet to address in a comprehensive fashion at the federal level. david: we will talk about what comes next, but my question for both of you is did we learn a lesson when it comes to corporate governance? could it happen again? nonsense of the huge downturn, there was a huge downturn triggering both of these -- not in the sense of the huge downturn, there was a huge downturn triggering both of these. other companies out there today but don't have the systems in place to protect themselves? find outk we will only when the tide goes out, who is failing to protect themselves. risk management practices in the financial industry have improved . nothing like a good crisis to scare management and boards into improving their systems. david: let me ask steve, how long does the scare last? have we forgotten that lesson? >> i don't think with quite forgotten it yet,

dodd-frank took that away. we don't have some protections, but we have some important new ones.avid: when you lost some of the legal provisions, what about political? one of the things you had going for you and it was difficult and not in a straight line, but you got congress. do we still have the same political capital or confidence given what happened last time? hank: yes, that is a key question. i want to begin by saying when i 2006, president bush was in a low point of his approval rating, high 20's. it was a very poisonous atmosphere in congress. i had a president that really encouraged me to develop relationships with democrats as well as republicans. fortunately, i had a year to do that before the crisis to get some things done, stimulus with nancy pelosi and with john boehner and to some trade deals and so on. i developed a relationship with the president. congress come together in a bipartisan basis to give treasury unprecedented authorities for fannie and freddie and for tarp. i am proud of that, and i am proud of the policy cut moving across administrations. i am neve

that is not permitted anymore under dodd-frank. provided market to the mutual funds.t of an alternate way to save and invest. that would not be permitted. show -- of therr crucial firefighting tools. exist. talking tobeen well-known investors during the financial crisis. you did too. what were his observations? >> he does not think we are on the verge of a crisis. he has several indicators that are not flashing. bridgewater has the depression in 2007, 2008. one, many years from now, he shares the concern of people like tim geithner. >> one of the influential folks -- founded bridgewater, the world's biggest hedge fund and he is one of the most influential voices on all things --ancial and all things we wanted to hear more. >> he doesn't think that we are in a bubble right now. he does see the growing financial and political risks. >> i don't think we are in the midst right now. when you hit zero interest rate skew have a different type of debt crisis. i think the period we are in is similar to the 1935, 1941. 1929 to 1932, we had a debt crisis on interest rates. that

came into being with dodd-frank, which they are trying to dismantle as there is the bureau they're trying to water down. they would not allow her to become the director. obama was forced to select someone else and they tried some finagling to make it work, but it didn't work. for some people now say is it's probably the last time that her political enemies could none because she didn't get to become the direct or at the bureau. she's a lot more powerful than the director that agency. >> let's talk about that. >> she still lives on. that gets into the whole campaign to become senator when the incumbent scott brown used the false claim during a debate, and accused her of getting jobs by falsely stating that she was native american. that's been debunked the week before "the boston globe" had a major investigation where they interviewed every living faculty member from every school that she applied to as a law professor about whether or not she had used the claim that she was of native american descent and every single individual said no she did not. they should put that to rest. >> will it?