through a lot of the structural changes which are inimportanted basically many the dodd frank bill. i don't think there's been any legislation in other countries as comprehensive as the dodd frank bill. they all have the problem. all the governments and regulators are worried about the same thing. this has been a worldwide break down of finance in the united states i do think i can fairly say it's been in a league of national legislative changes. it deals one way or another in almost all the factors bearing on relevant structural changes. first of all, it deals indirectly to reduce the risks involved. senator, you're absolutely correct. it making loans are the riskier thing in banks. it becomes riskier when they lose credit controls. it shouldn't be all that risky. but you're making sub prime mortgages and farming them off to other people is indeed exceedingly risky proposition. look at other activities. dodd frank dealing with derivatives. everything is real vent. $700 trillion of derivatives outstanding in the world today. wow wonder if they're all directed towards some explicit pr

central issue that runs through a lot of the structural changes which are incorporated basically in dodd-frank bill. i don't think there's been any legislation in other countries as comprehensive as the dodd-frank bill. they all have the same problem. all regulators and governments are worried about the same thing because this has been a worldwide

central issue that runs through a lot of the structural changes which are incorporated basically in dodd-frank bill. i don't think there's been any legislation in other countries as comprehensive as the dodd-frank bill. they all have the same problem. all regulators and governments are worried about the same thing because this has been a worldwide break down of finance. the united states can fairly say it's been in the lead by national legislative changes. it deals one way or another and almost all of the factors bearing on it, relative structural changes. first of all, it deal, indirectly, to reduce the risks involved. senator you're absolutely correct that making loans can be the most risky thing to banks and it becomes riskier when they can lose a relationship one on one without credit controls. shouldn't necessarily be all this risky. but you are making sub prime mortgages and farming them off to other people, there is indeed an exceedingly risky proposition. and let's take that, bank must make loans as essential to the economy but look at other activities in recent years. d dodd-frank deals wi

are gone what that's about no one's ever asked that question dodd frank bill passes and both dodd frank are gone interesting turn away saying right now he really means the campaign coffers didn't have quite as much money as they did they kevin thanks so much for joining us tonight on. our it's time for a quick break but on the other side of the break we'll have you started i read it and then it looks like someone is finally taking the f. twenty two health issues seriously but maybe not seriously enough.

and jamie dimon weakened critical aspects of the frank dodd bill. don't be fooled by what he said on "meet the press"." >> sec should look at this. that's their jobs. they'll come to their own conclusion. we have supported 70% of dodd. we support too baggy to fail. we want the government to be age to take down a bank like jp morgan. i think a lot of dodd frank will accomplish that purpose. >> don't be fooled. he fought against the important stuff. his overall success while admitting it's trading failure would cost more than money. >> the company is going to earn a lot of money this quarter. we made a terrible egregious mistake. there is no excuse for it. we hurt ourselves and our credibility, we'll pay the price for that. >> to senator carl levin the cries will be closing the loophole the banking industry created to allow jp morgan to make it's risky trade. >> the question is whether we'll tick to the law as written which would prevent us were bailing out banks again. they will lose their battle in washington to weaken the rule. that is the real pri

. >> one of the things that i quite frankly like about the dodd frank bill is that each one of these agencies -- or entities will have to put together a living will. would you describe to me what would be in a living will that would be important for you to see that were florithere and ho would operate? >> it requires that the company describe how it could be resolved under the bankruptcy code. so for companies that are very complicated, the lisk will nevi needs to have a description of how different legal entities within the company interact with one another so that if different legal entities are subject to different procedures or different regulatory procedures, how exposures of one entity aren't so tied in with another that it creates an intractable situation. by having that information in advance or especially by requiring the companies to produce that information and understand what those impediments to resolution could be, we could then use our supervisory process to push the companies to reduce them. >> living will basically lays out the connectivity of all the things going on

while we should not have needed a catastrophe to learn this lesson, the dodd frank bill or act now gives the fed and the financial stability oversight council responsibility for financial stability and new tools with which to help achieve it. the dual mandate is not inconsistent with strong emphasis on controlling inflation when proper and even with an explicit target for inflation. indeed last january the fed confirmed a long run inflation goal of 2%. operating under the dual mandate the fed has successfully controlled inflation for three decades. to change the language of the law to imply that the feds only concern should be inflation would send a misleading signal to a public rightly concerned with jobs and growth as well as inflation. it would i'm ply that serious -- that inflation is a serious current threat to american prosperity, which seems to me unwarranted. what we need now is a continuation of accommodative monetary policy, plus fiscal policy that combines additional investment in long run growth and jobs with credible long run action to stabilize the debt. in short, monetary

dodd-frank is in place to do that. it is an excellent framework. it put the fcoc in there so it could marshall our efforts for stability. there is no assignation for sifis within the dodd-frank bill. we leave those kind of threats in identification to the fcoc. and i believe the crisis we had a few years ago, the jpmorgan situation got to be avoided. but we got to make sure that any additional regulation for our financial institutions including both banks and nonbanks, will not stifle the growth of our economy. and the creation of american jobs. that the most important thing before us today. we've got to create jobs. we've got to get this economy better. we've got to also make sure that the forces that generate the capital, that test purse the capital. that lend and keep this economy going, disburse -- is not put in a straigtjacket. we've got to make sure that the abuses don't happen. all i'm simply saying is it's got to pass that delicate balance test, foremost, as economic growth, that not be five stifled. >> we're making great progress, jobless rate is coming down. let's move forward with jaundiced eye on this and do it correctly. >> thank you. mr. royce for one minute? >> mor

companies like exxon mobil and bp are particularly concerned about the dodd-frank bill's requirementthey disclose information on payments to foreign governments. proponents of that rule that they disclose include bill gates, george soros, secretary of state hilary clinton. they said disclosure would reduce corruption. but oil companies say that it would hurt their business model, which, i guess, including perhaps endemic corruption. but exxon's vice president called the rules excessively burdensome disclosure would have an effect on the global competitiveness of u.s. companies. now joining us from washington to discuss just how international corruption affects our is steve coll. new american foundation and the author of "private empire: exxon mobil and american power," his newest book. steve, so glad to welcome you inside "the war room." >> thank for having me. >> you bet. so you have written that exxon essentially operates like an independent country with its own diplomats. how does that impact u.s. foreign policy? >> well, in many place in the world where they operate particularly

there is no assign yaigs for sfis in the dodd-frank bill. we're leaving those kind of threats and identification up to the fcoc, and i agree that the crisis that we had a few years ago, the j.p. morgan situation, certainly got to be avoided but we got to make sure that any additional regulation for our financial institutions, including both banks and non-banks will not stifle the growth of our economy and the creation of american jobs. that is the most important thing before us today. we have got to create jobs. we have to get this economy better. we got to also make sure that the forces that generate the capital that, disburse the capital, that lend and keep this economy going is not put in a straight jacket. i say that as a proud sponsor of dodd-frank and also as one who understands we got to make sure that the abuses don't happen, but all i am simply saying is it has got to pass that delicate balance test foremost economic growth, not be stifled. now, we're making great progress here. jobless rate is coming down, all of this, so all i am

one of my greatest regrets in the dodd/frank bill is we had a proposal that didn't affect the cftc but affected the ftc that would have allowed all the little levy on transactions that is supposed to fund the s.e.c. to actually fund the s.e.c. and unfortunately, we had an a fight in the appropriations committee and they incysisted on not doin that. so could you talk for a minute about the funding issue and how vital it is, especially in relationship to the oversight that you are being asked to do by everyone on both sides of the aisle? >> sure. as you point out, we've been asked to take on very significant responsibilities. not just over-the-counter derivatives but hedge funds now registered and overseen by the s.e.c. municipal advisers which will add many new registrants, specialized corporate disclosure, a whistleblower program, quite a lot of new responsibilities. in fiscal year '12, we asked for 116 new positions for dodd/frank implementation. we did get a very good budget for fy '12. again, not as good as had we been self-funded. but we were very grateful to get an increase at a t

this big dodd-frank bill really doesn't address realtime issues, and that what you're going to do is end up causing the volcker rule to it be something it was never intended to be. i would like for you to respond to that, and in the process, possibly, making these highly complex organizations even more risky than they already are. just a couple of comments in that regard. >> i think our job, that you delegated or asked us to do is to be -- >> punt was the word i used. >> i always try to be more respectful to fful to congress. >> you don't need to be, and i appreciate that. i think was to ensure that american public gets the benefit of transparency and lower risk. firms will fail in the future as in the past. they have a freedom to fail and america doesn't stand behind them. the one industry we do this around the globe, and that's why i'm so committed permanently to getting this rear foform done. this is a reminder in one area. i look at it more about cross-border application than the volcker area, if i can say respectfully, because whether it was lehman brothers, aig, long-term capit

mitt romney in every stump speech says this -- >> dodd-frank another piece of the president's agenda. dodd-frank. this was the regulatory reform billes. about an 848-page bill. i don't like any bills that are that long. >> dodd-frank. this was designed apparently to try and keep the big bank, the too big to fail banks from getting bigger. guess what's happened over the last 3.5 years. they've gotten bigger. >> guess what happened today? he talks in every stump speech about repealing dodd-frank and ladies and gentlemen, today he didn't mention it at all. >> you know what, though? this could be an opportunity for romney. that last quote talking about the banks have gotten bigger on obama's watch. a lot of critics on the far left and right, even in between, are saying that dodd-frank did not take care of too big to fail. imagine if romney came up with a plan like jon huntsman that addressed that. i'm a republican but i have a plan to break up the banks. a conservative plan that broke up the banks. >> he won't. >> i don't think he will either. >> no way for him to do that. the problem for romney, he hasn't mentioned it, because he's ta

the news of the moment, which is the republican effort to repeal a critical provision of the dodd frank billdation authority. why are they doing this, and how significant of a blow would that be to the entirety of dodd frank. >> that would an incredibly serious blow. a requirement that people who secure loans retain some of the risk. one thing, i would say the single most important. loans people made and then didn't care if they were paid back were a terrible problem. then the regulation derivatives, but what this would do incredibly to me is put us back where we were in september of 2008. the provision was strongly strongly advocated by the bush administration. the head of the fdic, and head of treasury and person benber any can i, what the bush administration said, the large constitution going out of business, they had according to the law two choices. they could pay all of the debilities and keep the organization in business or pay none of the debts and let it collapse. so they let the lehman brothers collapse and people would remember that froze up the economy everywhere. when aig got in

bill. for instance, amy friend was a general council ever the senate banking committee during bailouts and dodd-frankdd thanked her repeatedly from the senate floor for her work on the bill. in january 2011 she left capitol hill for a financial group a politically connected consulting firm for big banks and other financial companies. when they hired amy friend they noted her work on dod franks and explained she would work for the firm's client on quote the regulatory implementation of the dodd-frank wall street reform which is the 2300 page says one of the most complex and wide ranging overhauls of the financial regulatory framework in decades. next through the revolving door came daniel need chief council to barney franks financial services committee. need cashed out to k street firm hogan lufls in march 211. the firm described him as quote a principal draft person of the dodd-frank wall street reform, unquote. hogan explained that need would represent financial firms quote impacted by dodd-frank. mega bank credit swooes and other firms are lobbying client. friend and need are only two of the exampl

an effort to get it into dodd/frank in the 2010 bill. that effort failed. need that kind of separation. we need to go back to boring banking. the people who want to take risks need to take risks with their own money and do it somewhere else, not in the banking system. >> potentially as a result of all of this according to bloomberg news they are reporting this morning the entire london jpmorgan chase, the chief investment office, may be dismissed. obviously, jamie dimon could be at risk here. i think the problem is from moving people from key positions. what is the solution? >> well, the root of the problem is the largest financial institutions don't want any government regulation. and washington is a place where money talks. and wall street has plenty of money to spread around. they have hired a army of lobbyists to make sure the rules are friendlier to wall street than the rest of the country. as a consequence of that it's a case of middle class families getting nothing, where the taxpayers are the ones who are left behind to pick up. and, yet, the larges

so these derivative trades were again, derivative trades and the dodd-frank bill said let's bring themng them out so everyone can see what is happening. and this is a strong argument for let's get derivatives regulated. >> if the voelker rule regulations had been in effect this still would have been able to go on or not? >> well if the law -- what congress passed -- if the rule that was proposed adhered to that law, then jpmorgan shouldn't be doing it. the regulator's proposed rule was weaker than the law. so if you go by the letter of dodd-frank jpmorgan shouldn't and couldn't have done this, but the rule proposed was weaker than the law, so this is a clairian call to say this is a lesson that we need a tougher rule. >> do you think jamie dimon will step down? >> he has been running around the country talking about regulations being too tough. bragging about jpmorgan's fortress balance sheet, and this wasn't a rogue trader. i just think it shows why we need regular legislation of these two big to fail banks that if something goes wrong, we pay the price. i loved when you introduced th

a case in point: the'sage of the financial reform bill dubbed dodd frank. here's an excerpt. >> on july 21, 2010, president barack obama signed what became known tass the dodd-frank bill. >> finally because of this law, the american people will never again be asked to foot the bill for wall street's mistakes. there will be no more tax-funded bailouts, period. ( applause ) >> reporter: the bill included some rules against risk-taking by banks, limited consumer protections, and new powers for regulators. but even some at the white house admitted the reforms may not be enough. >> the weakness is that in order topr%@ get it over legislative hurdles, there were so many eyes and... i's and t's left undotted and crossed that big decisions that are actually of great importance are still being made. and they're being made in a climate where they're not necessarily under public scrutiny, where the lobbyists have a chance to get in and sway things their way. i very much worry that we haven't learned the lessons that this crash should have taught us. in an era of this l

look, i'm just worried that we just passed as you know what was it, about a year or two ago, the dodd-frank bill, which was supposed to stop this kind of behavior. and dodd-frank imposed a lot of new costs on these financial institutions. >> they haven't put brakes on them. jamie dime sn fighting against it. >> you need the right regulation. you need to streamline all the different entities in washington, put them all together and have one mass reg later. that's not more regulation. the other point. >> i agree on that one. >> the ones that gotten the deepest suit going back to the financial wipeout, which is to say the united states, the uk and iceland. so less regulation is riskier. >> i love an iceland mention. they're back, by the way. >> iceland. >> when you've got so many regulators looking at these banks, we agree there. transactions these kinds of things continue, i mean, look. the one thing we have to make sure we don't do is continue to bail out banks when they make bad decisions because i think that's the ultimate safety net and hammock for bad decisions. >> let me just put this as you

the president took a bold step with the dodd-frank bill. that's the first major reform in our financial system since the 30s which was closer to our civil war which was to the time that we are in today. so this is a complex thing. we're going to go through a number of years to try to get these changes and rates and rules right. we have to keep doing that. but it's a tough business and it's a tough time for a lot of businesses in the u.s. and around the world with the complexity of financial services. >> and i think we should mention, the fortress balance sheet. you didn't hear the profitability -- >> and you have to remember, this was not customer's money. this was not client's money. this was the bank's money. albeit important to the shareholders and i think they have a pretty good track record of returning bottom line figures for the investors over the long period bau it was a mistake and a serious one and jamie has acknowledged that. i'm not making light of the dil tea that it's created for the company, for the industry, or for jamie. bu

so in this congress is a bill in the finance reform bill, the huge big dodd-frank bill.endment which actually makes it law that any company published on the united states stock exchange, the new york stock exchange, has to publish what it pays for those mining rights. this is huge, bigger than anything you can imagine. hosteling us that? africans are telling us that. they're saying bring some daylight, transparency and we won't be as dependent on. >> you this is such a novel idea. the europeans are pushing back against this saying whoa, we don't have these same rules, we don't want these rules for our companies. this would really tell the people in africa exactly what money is being transferred and what their resources are going for. >> then they can hold their own governments to account. now, the british are looking at this. there's some discussion about whether it should be project by project or country by country. it has to be project by project. i think we're meeting with david cameron later. i'm hopeful to convince him to do that. french are there on this. i spoke w

jp morgan's jamie dimon has been doing and wall street as a whole has been trying to erode the dodd/frank billying to provide even more license for what they were doing before. the so-called boca rule under the dodd/frank law is sort of glass steigle act, the old glass steigle from the 1930s, separate commercial investment banking, it was thrown out in 1989, and a lot of people felt it had to come back. the dodd/frank act is a great act as far as it goes, but it did not resurrect glass steigle. wall street has been trying to get rid of the boca rule, and now i think there is a political possibility -- barney frank knows better than i do -- but i think there is a possibility to come on much tougher at least for democrats and the obama administration to say, now is the time to bring back glass steigle. >> you are avil villain to the guys, i think. do you feel like that, that the big business tycoons that love as much cowboy license as possible, to make as much money with as much risk as possible, who are you to them? >> chris, i came to be the greatest fundraiser candidate of anybody in america.

it's not in the dodd/frank bill reform. what are we going to do, bill isaac?uld agree that we have a number of banks in the country that are just too big to fail, because they generally don't get in trouble alone. they get in trouble at the same time. and they comprise about half the economy, about half the financial system. so we really can't let these banks fail right now. what we do about it is a very different issue. i, frankly, think that if we had the right regulatory policies in place, these banks wouldn't dominate the way they do now. i also think that there are some things that the regulators can do to make these -- make the market imposed more disciplined on these banks. >> bill, wouldn't you agree that the fastest way to getting right sizing in market share would be actually making sure we have a regulatory environment that creates a fairly dynamic competitive environment so some of those structural benefits that a big bank gets, they lose, because people nipping at their heels in the growth? >> dave, if can i respond to that, the key to being succe

that it violated the previous law, but it is clearly inconsistent with what we did in so-called dodd frank bill or the volcker rule, which is to say to these big banks, you cannot take these big proprietary bets. you cannot bet on the direction of the economy. you can hedge, but this was not a hedge. >> okay. well, that was senator carl levin today on capitol hill speaking with our very own john harwood. we still have our round table here with us. eliot spitzer out of new york and here at hq, scott ja cobson and frank. scott, let me get to you first of all, what's your reaction to what mr. levin was saying a moment ago? >> whether it's hedging or not part of the global or macro parts that large institutions have to take. large institutions are important to grease the wheels of the economy, and we rely on that. but there is an asymmetric playing field with risk/reward. let's say jpmorgan is the new york knicks. if they lose the series against the heat, should they get another chance to play? that may not be fair to all the other teams in the league or the taxpayers. so the taxpayers and society

dodd-frank act. that legislation passed in 2010 aimed to overhaul many of the wall street practices that caused the financial collapse. as part of the dodd-frank bill and the commodities futures trading commission imposed new regulations on companies that deal extensively in derivative products. as a result of that action, credit default swaps now clear through exchanges or clearing houses, but they're still exempt from insurance regulatory oversight. [ticking] coming up, the harsh reality of state finances. the state's a deadbeat. >> yeah, i mean, the state of illinois is known as a deadbeat state. you know, this is a reputation that has taken us years to earn, and we've reached, you know, the heights of, i think, becoming the worst in the country. >> it's the day of reckoning when 60 minutes on cnbc returns. it's gonna be a casual thing. ♪ ♪ ♪ [ male announcer ] the tight-turning, space-saving, eco-friendly smart. escape your stuff. ♪ escape your stuff. high schools in six states enrolled in the national math and science initiative... ...which helped students and teachers get better results in ap courses. together, they raised ap test scores 138%

that it violated the previous law, but it is clearly inconsistent with what we did in so-called dodd frank bill or the volcker rule, which is to say to the big banks, you cannot take these big proprietaries. you cannot bet on the direction of the economy. you can hedge. but this was not a hedge. this was a bet on the direction of the entire economy. a hedge as we define in our law, this is not a matter of debate or argument, this is what is in the law. a hedge must relate to a specific asset in somebody's account. and if you want to reduce the risk of that asset, you can take out a hedge or buy a hedge. that's fine. we protect that. but what you cannot do is bet on a general direction of the economy, because that's the kind of bet that can lead to a bank getting in big trouble. and if it's a big, big bank, if it is too big to fail and if it did fail drag the entire economy down with it, then we end up bailing out the banks. >> i talked earlier to an official in president obama's treasury department who said we don't know enough about the trade how it would fit in with the volcker rule as it has

. >> narrator: on july 21, 2010, president barack obama signed what became known as the dodd-frank bill and finally, because of this law, the american people will never again be asked to foot the bill for walstre's miskes. there will be no more tax-funded bailouts. period. >> narrator: the bill included some rules against risk taking by banks, limited consumer protections, and new powers for regulators. but even some at the white house admitted the reforms may not be enough. >> i think the weakness is that in order to get it over legislative hurdles, there were so many is and ts left dotted and crossed that big decisions that are actually of great importance are still being made. and they're being made in a climate where they're not necessarily under public scrutiny, where the lobbyists have a chance to get in and sway things their way. i very much worry that we haven't learned the lessons that this crash should have taught us. in an era of this level of interconnectedness, yeah, i worry, i worry that we haven't learned the lessons. >> narrator: the president's supporters say his greate

look, i'm just worried that we just passed as you know what was it about a year or two ago the dodd-frank bill which was supposed to stop this behavior and it's imposed a lot of costs on the financial institutions. >> jamie dimon is down there in washington fighting against it. >> you need to streamline all of these different entities in washington, put them all together and have one master regulator. i don't think that's more regulation. the other point i'd like to make is the least regulated countries -- >> i agree. >> the united states, the u.k. and iceland, so let regulation is riskier. >> i love an iceland mention. >> yeah. i'm not going to defend iceland here. when you have so many regulators looking at the banks -- >> we agree there. >> transactions, these kind of things continue. i mean, look, the one thing we have to make sure we don't do is continue to bail out banks when they make bad decisions because i think that's the ultimate safety net and hammock for bad decisions. >> let me put this to you then. what we have here in the introduction. jp morgan is 40% bigger than before the cr

of course, regulators would like to do something about that although the dodd-frank bill, lukas you probably know is what, 2300 pages and counting. the volcker rule which is not even in place yet is a couple hundred pages and counting. i mean, who knows what's going to be in there because the lobbying is pretty hard on the banking side, as well. >> there has been a move to weaken it as each house and senate vote goes on and on. one question i want to ask you, elizabeth warren running for senate in massachusetts said jamie dimon should step down from his position on the new york fed. do you think that will happen in any capacity? and give us a lehman's explanation of what the new york fed does in this regard and why his position there could look fishy to an average investor. >> yeah, it doesn't look good. i understand that. right? you think why is somebody dpr one of the biggest banks in the world sitting on the board of the new york area representative, the u.s. federal reserve? of it probably is not going to resonate vet positivetively with parts of your audience. maybe it's not jamie dimon

dodd frank. mitt romney put out a statement saying he supports common sense regulation of derivatives and that the jpmorgan loss underscores the need for that. carl levin said the dodd frank bill is the only law we have to protect against this and it's urgently needed because we can't bail out banks again. here's carl levin. >> we don't ever want to bail out banks again. we never should have to bail out banks again. but if they get away with this kind of bet, then we're going to be right back in the soup again. we're going to end up either facing economic disaster, a depression or having to bail out banks again. we don't want to be put in that position. >> so, sue, this is engaging all parts of the governmental system. you're going to see a debate in washington on capitol hill among the regulators and also in the middle of this presidential campaign. >> oh, i'm sure we will, john, thank you very much. now, fresh off of those comments from senator levin, let's get the other side of this debate. robert albertson joins us, chief strategist at sandler o kneel. a lot of people think the volcker rule would have prevented this particular situation with jpmorgan. you disagree. >> the