so essentially here's what happened in this really comes out of the dodd frank bill going all the way back 220072009 remember when dodd frank was 1st put into action essentially with that legislation came rules where the fed has to annually stress test banks around the country to make sure that they're able to weather certain economic scenarios essentially and so the fed ran these stress tests and what they found was there was kind of a general sense of economic conditions being rough and then they ran stress tests on 3 different coronavirus related or specific scenarios one would be a you shaped recovery one is a v. shaped recovery and one is a w. shaped recovery meaning that you come out of a recession and then you go right back into it and so essentially they look at these banks and they found that there were at least 30 banks that failed this stress test and what they found was that these banks under certain conditions are right at the minimum level of capital that they're allowed to have under dog frank in order to not become insolvent and go under and so what the fed is essentia

is all of this well it is simply it's because it is what the fed is finding is that under that dodd frank legislation these banks are not holding on to the capital they need to hold on to right now what they're doing is they're essentially playing too loose with the capital that they have the whole point of dodd frank was to say let's not go back into another situation where banks find themselves insolvent and where and where taxpayers find themselves having to bail out huge financial institutions that are unavailable to take care of themselves so god frank was essentially designed to say that's require that banks prove that they are being response. in the way they're behaving and that they don't have to get bailed out and what essentially the fed found 4 was 30 of those banks are not being that responsible and they're really in a position especially with coronavirus related economics at play they could find themselves in a very serious position so again as you said there they're capping these dividends they're saying you can't be paying out the shareholders right now you've got to really

used now with the approval of the secretary of the treasury under statute passed by congress under dodd-frank. we do use those tools and they are powerful. they have quite a limited use. the treasury secretary as part of the administration. and it is not for general fines. the tools that we are using our lending tools, not spending tools. we don't have the ability to make rants of money to particular groups of people no matter how directly they are affected. companies affected by the pandemic. that is a job for elected spending and taxation. it is not a job for officials like us. it is not a need to underscore the limits of the powers. authorities are very strong and that week like this you see how strong they can be. >> to make, let me say, to be paid back. with 100% certainty if there was such a thing in the world. you have been directed during the pandemic to make loans in places where a fed has not gone before and they are not 100% guaranteed to pay back. do you see that. does this worry you? >> at the beginning of this my colleagues and i needed to be using tools to the fullest extent th

that was all growing out of dodd-frank. be the fed's job to hold back on capital distribution, if they felt the banks were week. two separate issues but in general the markets have accepted the capital issue, limits they put on. nobody seems to be too upset with what the fed has done so far. vonnie: michael mckee, thank you. cogent and simple explanations, as always. the last of the emergency lending programs becoming operational. up next, we will speak to peter which justf sprott, listed on the nyse. this is bloomberg. ♪ amanda: i'm amanda lang in toronto. as we have been discussing, the fed continues its credit easing position in the market, leaving some longtime market watchers to conclude not only will it continue but it may have a devaluing effect. phrase "cashd the is trash." peter grosskopf is the ceo of sprott, which is now trading on the new york stock exchange. let's start right there. you are listing on the nyse. you had been otc, but now your common shares are listed. what does that mean for you in terms of mile

this is under dodd frank. we do use the tools. they're very powerful. but they have kuwait a limited use and, again, only to be used in unusual and other circumstances with the permission of the treasury secretary who, of course, is part of the administration. i think we need to stress and try to stress all the time that we have tools that we can use but they're not for general times. particularly now what i would say is the tools that we're using now are lending tools, not spending tools. so we don't have the ability to make grants of money to particular groups of people no matter how directly they're affected by companies or affected by the pandemic. that is a job for elected officials. they control spending and taxation. it's not a job for appointed officials like us. so there is a need to underscore the limits of our powers. although, our authorities are very strong. you're seeing how strong they can be. >> one of the ways to draw a line between lending and spending is put it is to make, let me say, only loan that's will be paid back. you might say

this is under statute passed by congress and under dodd frank. so use those tools and they are very powerful. but they have quite a limited use. again, only to be used in unusual and exigent circumstances with the permission of the treasury secretary, who is part of the administration. we need to stress and retry distress all the time, that we have tools we can use, but they are not for general times. particularly now, i would say the tools we are using now are lending tools, not spending tools. we do not have the ability to make grants of money to particular groups of people, no matter how directly they are affected, or companies affected by the pandemic. that is a job for elected officials, who control spending and taxation. it is not a job for appointed officials like us. there is a need to underscore the limits of our powers, although our authorities are strong. and at a time like this you're seeing how strong they can be. one of the ways to draw a line between lending and to make only loans that will be paid back, you might say with 100% cer

sheila: there could be, and that is another lesson that there were controls with dodd-frank that weresed very aggressively. there are regulatory tools that you can use as bank regulators in terms of the intersection of large banks with hedge funds, private equity, that are the source of, frankly, some systemic risk in the system. we have not use those tools very well. isck on wood, the fed papering over a lot of the problems that we are experiencing. how long that will last, i don't know, fingers crossed that the fed can keep it up. but longer-term, we need to say it again, we need a holistic approach to financial oversight. if somebody is acting like a bank, using a lot of leverage to get short-term liabilities and long-term assets, they need at safety in terms of capital requirements which should not apply to most of them right now. do you think, sheila, that on that note, we need to think more about the way government policy, particularly fed policy, works right now? the fed has done an awful lot since the start of this pandemic, and in some ways, as you alluded to earlier, it is e

powell, in response to a letter from , requested that congress consider modifying section 171 of the dodd frankct, otherwise known as the collins amendment. do you agree with the vice chair that congress should revisit the collins amendment to ensure that banks are able to adequately respond to increased credit demand? chair powell: yes, so, what we are looking for in a lot of the things we are doing is temporary relief during the pandemic, so that the banks can use their balance sheets to support their household and business customers. it is no more complicated band that appeared as they have taken in more deposits and as they engaged in forbearance on things like credit card balances and things like that, their balance sheets grow, so they have been supporting their customers and borrowers, and this is simply a matter of allowing them to do that. it would be a temporary measure. rep. wagner: so you are in favor of at least a temporary measure to modify 171, the collins amendment, to allow them to handle the increased credit demand? chair powell: yes, and we would be happy to work with you on

reserve vice chair, randall quarrels, requested that congress consider modifying seconds 171 of the dodd-frank act, otherwise known to all of us as the collins amendment. do you agree with vice chair quarrels that congress should revisit the collins amendment to ensure that banks are able to adequately respond to increased credit demands >> yes so what we're looking for in a lot of these things we're doing is temporary relief during the pandemic so that the banks can use their balance sheet to support their household and business customers it's no more complicated than that so as they have taken in more deposits and as they have engaged in forbearance on things like credit card balances and things like that, their balance sheets grow. so they have been supporting their customers and borrowers and this is simply a matter after louing them to -- of allo that. >> so you are in favor of at least a temporary measure to modify section 171, the collins amendment, to allow them to handle these increased credit demands? >> yes, and we'll be happy to work with you on the details of that. >> that would b

./0 going tow much you're pull back from the dodd-frank reforms.some requirements on proprietary trading and made it easier for banks to put their own capital into the ring and trade that. paul voelker was legendary fed chair that put in this rule, and people have been pushing against it for a while. again, banks will be able to invest again in venture capital funds. that would have to hold margin on those derivative trades. that is going to bring in about $40 billion, people estimate. this was approved across the board, federal reserve, fdic, occ, etc. another thing to consider is that there has been a question about liquidity, and this easing of the rules may make more liquidity available to banks at a time when the pandemic can cause stress is in credit markets, as it did earlier this year. bloomberg global economics and policy editor kathleen hays with the update. let's check latest business flash is. searching coronavirus numbers mean apple is preparing to close more stores in the u.s., with at least 14 outlets set to shut in florida. 34,000 c

have been saying by this bipartisan bill we passed in january of 2018 prior to that, because of dodd-frank we killed 4,000 community banks and we went from 800 approved lenders to 5,000 in a matter of a few weeks and they put out over 5 million loans averaging $116,000, $510 billion is in that ppp program, that's already been disseminated and we haven't put any money out yet in the main street program so half the money is still to come in the current allocation, so i think there's enough energy in here. now we may have to pump up the ppp program a little bit if we have some future need but we've extended the time that they can use it from eight weeks to 24 weeks, and the time to pay it back from two months or two years to five years, and it's much more flexible now, and we can see that there's a possibility that we might be able to reprogram some main street money back into the pppp program without having to appropriate new funds but the biggest problem we have to reopening the economy charles is the liability issue and that's what we're debating in congress. we've been fully functional no

it was dodd-frank. but for the most part it wasn't a far left agenda. about with joe biden, particularly as his poll numbers start to widen over donald trump, but again, it is still early. they worry about him elizabeth warren will make her way into the white house, will be impacting fiscal policy in some way, maybe even becoming treasury secretary. a lot of, a lot of people believe she is not going to be his vice president running mate. that he is likely to pick an african-american woman for that, but she will have a role in the administration. treasury secretary could be it. so they're worried about how that will impact fiscal policy. how that will impact regulation as lot more. how that will impact taxes. a lot more of them, on companies and individuals and how that might impact the stock market. again, it is very early. here is what weigh do know. brokerages for these presidential analysis on their clients portfolios the research teams wait until the fall sometime, maybe, late august, definitely into september where they start to sort of reassess ho

regulators on april 8, vice chairman coral has noted that congress should consider modifying part of the dodd frank act, the collins amendment, to allow regulators to provide flexibility as things respond to increased credit demand. there are also several proposed rules of the agencies have been working on since before covid-19. and i encourage the agencies to finalize these as soon as possible, such as the covered .unds rule during this hearing to my look forward to hearing more on the state of the economy, including its response to the cares act, an update on the status of the 13th street emergency lending facilities, how the facilities have provided or stand to provide necessary credit to households, businesses, states, local governments -- and local governments. and changes at that could increase credit and liquidity in the market place to further support the economy. chairman powell, i thank you for joining us. senator brown: thank you for holding this hearing. thanks to mr. powell for participating remotely, to practice social distancing and prevent the potential spread of coronavirus. we kno

president obama did dodd-frank and he did the affordable care act, doing immigration reform should haved a group of eight who actually worked it but we just could never get there. at the beginning he said we have to take care of all the dreamers who did early. he did it with executive order, kept it going like a hot potato. there is no question that our country needs immigration reform but i think you have parties that look at it very differently. you have president trump who looks at border, porter kemp a border. you remember what he called mexicans and so forth when he walked down the escalator, and you are the party of diversity. the facts don't lie. of the 105 women in congress, 90 are democrats. of the 54 black in congress, three are democrats. of the 46 hispanic in congress, 37 are democrats. so there's a party of diversity that is looking to the future, which is why today republican senators are saying it's not a good day. how could this not be a great day for this country? >> sandra: and of course you are referring back to, we just read off a tweet from senator hawley who just c

over banks, credit unions, security firms, spearheaded of course by elizabeth warren, part of that dodd-frankcrisis but it was just headed by one individual who can only be fired for a very narrow range of causes. and now looks like the supreme court the president now has the authority to fire and remove the head of this institution if he feels like it. stuart: i chalk that up as a defeat for senator elizabeth warren. that is the way i see it. susan: yep. stuart: thanks, susan. where is joe biden? he sure does make the occasional wayward speech? for the most part he has been holed up in his home? kind of gaffe-free i guess. i think his campaign wants him to stay that way. i thought we would take a look back at some of the gaffe machine's greatest hits. roll the tape please. >> look, tomorrow is super thursday, tuesday, i want to thank you all. i'm rushing ahead, aren't i? we hold these truths to be self-evident. all men and created by, you know the thing. my name is joe biden. i'm a democratic candidate for the united states senate. look me over. if you like what you see, help out. if you agr

regulators unemployed, vice chairman noted that congress should continue modifying section 171 of the dodd frank act . the following was the moment to allow regulators to provide flexibility under tier one leverage requirements as banks respond to increase credit demand. there also several proposed rules of the agencies have been working on since before covid-19. i encourage the agencies to finalize these rules as soon as possible. the recovered funds rule. during this hearing i look forward to hearing more on the state of the economy including its response to the cares act an update on the state of the 133 emergency lending facilities and how the facilities have provided necessary credit to households, businesses state and local governments. an additional regulatory and legislative changes and increase credit and liquidity in the marketplace and further support the economy. chairman powell, i think you for joining us today. senatorin brown. thank you y mr. chairman for holding this hearing. thanks to chair howell for participating in this meeting remotely. we know the virus is still spreading,