the chair of the fdic. this legislation is going to go beyond that. the bottom line is you are granding discretion that as long as they can look themselves in the mirror and say we are going to treat creditors differently because we believe it will balance the financial things of people. that is a big hole to drive through. we are going to frant the ability of the fdic to have this huge pot of money.. and again, we didn't get a clear answer on exactly what that money was going to be used for in the bailout fund, but we know how it was used in cries -- chrysler and g.m. in chrysler, secured creditors got 29 cents on the dollar, and the u.a.w. pension fund, an unsecured creditor, got 43 cents on the dollar. look at the equity. the u.a.w. ended up with 55% of the equity of the new chrysler. it is not a death panel. it is a resurrection panel. it plays favorites, picks winners and losers. here's a good one. fiat got 20%, who i don't believe was an additional creditor, and an additional 15% if they could manufac

let's not do this fdic language. while you're at it, let's confirm the fact that, when we terminate tarp, that the money from the terminated card funds will go to debt reduction. this fall -- some of this will be spent in 2019. we can do it. we can find those dollars. let's terminate tarp and put the money to rent -- put the money to debt. >> senator shelby and then senator saxby. >> i support the brady amendment. it makes sense. but everybody here in the house and senate knows that senator greg has deep interest. he is the top republican and is a member of the appropriations committee and the banking committee. when he is talking like this, i think he is making a lot of sense. i would urge my colleagues to support his amendment. >> i always think he makes sense, by the way. >> mr. chairman, thank you. i am not a member of the banking committee. i have not engaged on the number of these issues that involves exclusively banking amendments, but this is so egregious. you cannot sit here and let this happen. this is tarp

but please understand that the republicans want to preserve the fdic for depositors. without this, you are simply creating systemic risk companies that don't have fdic- insured depositors, and yet they're being treated that way. as so many people before me the served on the financial services committee articulate, other differences, you are missing the apples and oranges. i strongly suggest you reconsider your potential opposition to the amendment, accept the amendment, give further refinement either here or and the judiciary. we certainly can expand bankruptcy law and modernize it to allow for funds, but not o strip away ordinary bankruptcy protection, which mr. smith has already spoken on, is critical. financial services was never intended to preempt the history of successful bankruptcy, and i think a successful bankruptcy because they provide the maximum protection to the creditor, while giving the stockholder the opportunity not to be wiped out. for everyone of us who has invested in stocks or has a pension plan that invests in stock, we are not creditors. we want

with we do model some of this after the fdic. the fdic, run by an able appointee, a republican, appoint to the job by president bush, had a major role in helping us decide how to do this. it is to say, first of all, the institutions that get too far into debt will die. my republican colleagues were actually right in the wrong place. earlier this year. which is better than their usual average when they talked about death tanls -- death panels. we are legislating death panels this year but they're for financial institutions, not elderly women. we don't havehem in the health care bill, we have them in the financial bill. there is no too big to fail institution. some things that were done were not done as well as they should have been. that's why we go to a final conference. to the extent there are discussions that some of these might survive, we'll clean them out. the senate bill has some provisions i don't like. 202 of the senate bill, i hope to change. on the other hand, the notion that in this very complex system we have with the

those resources will be held at the fdic. cannot be used for bailouts are any other thing of all. so there's no danger of this money creating some sort of a tiny plot, as some talk about it, to be used for other purposes. it is a fraction of what the bonus payments have been that these major institutions over the last couple of years. when people tell me about the money that could have been used for lending and for the means to that argument was not terribly appealing i guess for the leadership of those institutions who decided to take bonuses in the face of everything else that was going on. they have to meet the requirements. nothing we come up with is necessarily going to win across the states. these are difficult choices. but we have to meet the obligations. what the house has come up with is a combination of what we're able to keep without proposing any additional burden on any institution and dividual. except in those cases were we're asking the most well-off financial institutions that have demonstrated the ability to

disturbingly enough, and also says the fdic can decide -- the treasury can decide to pay other creditors off and to tell other creditors there are out of luck. that gives them tremendous discretion. we do not feel like the american people get that back. why pay them in the first place if you need to get it back? take the largest six connected companies and that is the no. $8 trillion exposure. the government is alreadd over committed. >> the bailout issue has been a central question about all this. what would be a better alternative beyond just a simple could go with lehman brothers. >> with lehman brotters, we said they were nottallowed to aat immediately. there were not allowed to issue a injunctive relief. we said, okay, we ill -- we will allow nhance bankruptcy. we went to experts and we addressed those by giving the bankruptcyy udge's more power. the primary differences i see to the general public about the differrnce in bankruptcy and this procedure is the democrat procedure. it was a procedure of the bush administration. that is what president bush did. and as the secretary paulso

with we do model some of this after the fdic.the fdicrun by an able appointee, a republican, appoint to the job by president bush, had a major role in helping us decide how to do this. it is to say, first of all, the institutions that get too far into debt will die. my republican colleags were actually right in the wrong place. earlier this year. which is better than their usual average when they talked about death tanls -- death nels. we are legislating death panels this yearut they're for financial institutions, not elderly women. we don't havehem in the health care bill, we have them in the financial bill. there is no too big to fail institution. some things that were done were not done as well as they should have been. that's why we go to a final conference. to the extent there are discussions that some of these might survive, we'll clean them out. the senate bill has some provisions i don't like. 202 of the senate bill, i hope to change. on the other hand, the notion that in this very complex system we have with the debts th

well, this bill authorizes the fdic to borrow 90% of that amount and farrin tee that the obligation -- guarantee the obligations of bank of america, buy their assets, loan them money and basically come in and mannge the company. it also, disturbingly enough, it says the fdic or the treasury can decide to pay certain creditors off and tell others you're out of luck, which gives tremendous discretion. government get it back? we will get it back from the creditors. why pay it to them in the first place if you're going to get it back? just take the largest six systemically connected companies. that is an over $8 trillion exposure, and the government is already overcommitted. >> on the bailout issue, and that has about a central question in all this, what would be a better alternative beyond just a simple bankruptcy, which we saw how that can go with lehman? >> with lehman, they said ok, they weren't allowed to act immediately. they weren't allowed to issue certain injunk tiff relief. -- we said ok, and we went to bankruptcy experts and corporate governance experts, and we addressed those

we'll enact what's called the volcker rule to make sure banks protected by a safety net like the fdic can't engage in risky trades for their own profit. we'll create what's called a resolution authority to help wind down firms whose collapse would threaten our entire financial system. put simply, we'll end the days of taxpayer-funded bailouts, and help make sure main street is never again held responsible for wall street's mistakes. beyond these reforms, we also need to address another piece of unfinished business. we need to impose a fee on the banks that were the biggest beneficiaries of taxpayer assistance at the height of our financial crisis -- so we can recover every dime of taxpayer money. getting this far on wall street reform hasn't been easy. there are those who've fought tooth and nail to preserve the status quo. in recent months, they've spent millions of dollars and hired an army of lobbyists to stop reform dead in its tracks. but because we refused to back down, and kept fighting, we now stand on the verge of victory. and i urge congress to take us over the finish line,

they said at many of them do not know the differenceetween the fed, the sec, the fdic, or the occ, but they do know that they want someone to show up to work every day with their primary focus on protecting consumers. our system nee a strg, viable cfta to restore trust in the financial-services sector. we should work in this nference to ensure strong consumer protectns and to esve the historical an important role the state of play in protecting their own citizens from abusive financial pducts and practices. fourth, regarding diversity in the financial-services sector, if we are honest with ourselves, the voting rights and civil rights gains we made as a country since the 1960's still have not found their weight to the financial services sector. there is no racial diversity amonthe regulators. literally any among the board or management of the institutions being regulated, and not a heck of lot even in the employment ranks. some people characterized the industry a "the good old boys club that y be well on the way to giving way to the whiz kids young boys club." i am especially intereste

that's the fdic. make sure that the management is removed. ensure that members of the board of direct ortiz are removed. so -- directors are removed. so it's quite the opposite of what the gentleman talked about. it says if an institution has gotten so indebted that it should not be able to pay its debts we step in and put it out of business. totally opposite what happened to a.i.g. it does say, yes, in some circumstances there may be an inability to do these things. but only after the institution has been liquidated. the gentleman talks about it and talks about it and never mentions that this is only as the institution is being put out of business. it is very clear elsewhere in here that any funds expended will come from the financial institutions, not from the taxpayers. now, we have a piece of legislation that we adopted in conference to try to do that. here, unfortunately, to get the republican votes necessary in the senate for an otherwise good bill we had to back that down, but it didn't change in here. so, yes, there is a provision --

that is an issue where the fdic's basic framework is the most reliable resource we have had. >> so we are all clear, the numbers come from the bank's examiners. they're not numbers we generated. >> i am a great about the challenges, i just did not want my agreement to be about the numbers. we have a very elaborate the country for dealing with the challenges facing our nation of 9000 commmnity banks. that process was designed in the wake of a series of past crises. that gives it government the ability to help those banks manage through, and help facilitate the restructuring ahead those banks that are uuder pressure have a lot of options. they can raise capital. they can shrink lending. you also have to point out that the programs we designed from the beginning are only available for banks that we believe would be viable. these are important programs because they will help the banks face less need for shrinking balance sheet. >> i am over. i just want to make sure that there is no reason to change anything, we will stay steady on the same course? >> i am a very careful, pragmatic person

and they can even sell and transfer to the fdic the assets of a failing firm. now, how do they do that? well, they have to borrow money. you can't buy something for free. you can't guarantee things without money. under the house bill you can borrow 90% of the fair value of the failed firm's total consolidated assets, you're going to borrow it. in order, the government, the taxpayers are going to borrow 90% of that amount. what are we talking about? potentially, with just the largest six companies in america, bank of america, morgan-chase, citi, wells fargo, goadman sax, the so-called wall street bank, most of which, including goldman sachs has said, we like this provision, it's a great provision. the federal government can borrow for those six firms $8.5 trillion, yet we do not ask, where are you going to borrow this money from? are you going to go back to the chinese? what will it cost? how will it affect when the taxpayers borrow this kind of money the fdic, how will it affect our ability to pay the depositors that we guaranteed those obligations? how will it

-like failing company will be put in an fdic supervised resolution authority. mr. frank is correct when he says, wait a minute. wait a minute this only occurs when these firms are being placed in liquidation. they have to -- they're being liquidated. well, now, i agree with him. now, now, is there no bailout of anyone on wall street? well, of course there is. there's a very expensive bailout. the dodd-frank bill promotes in section 204-d 1,-6. go write this down and go and read it. it says the fdic can lend to a failing firm, two, purchase the asset offings a failing firm, three, guarantee the obligations of a failing firm, four, take a security interest in the assets of a failing firm, five, and/or sell the assets the fdic has acquired from a failing firm. why would you lend a failing firm money sni keep asking that. and the second thing is, where is the bailout fund in this bill? there is no bailout fund in this bill. there's $19 billion that's assessed toward community banks, fdic assessments that are raised about $9 billion. and there's the tarp program that's

the senate bill allows the fdic to borrow money to wind down the is a institutions. who ultimately pay for these mechanisms? the taxpayer. enough is enough. we can do better by creating an enhanced chapter of the bankruptcy code with a resolution of 40 to prevent future bailouts and create better transparency -- resolution of failed entities to prevent future bailouts and create better transparency. as we know in the conservatorship of fannie and freddie, we have $145 billion of taxpayer dollars already at stake. the time has come for sensitive reform of the gse's. we still have plenty of time. we have the will to tackle the enormous exposure to the taxpayers of fannie and freddie. i look forward to an open and transparent conference and the type of financial reform that will hold wall street accountable and permits main street to thrive. >> the chairman of the agriculture committee will be next. the gentleman from minnesota. >> thank you, mr. chairman. thank you for your leadership on this issue of financial reform. we have been working together on this legislation

yet we still have the fed, the fdic, the occ3 them will expand and power and scope. these s also add new lette to alphabet soup. so much for streamlining. this legislation reflects series of deals made by the executive brch along with the existing financial regulators who failed to do their jobs during the last crisis. the bill we are considering is filled with undefined terms leading up to the film regulators to deeerminehether a company is a threat to the financial stability of the ited states or is in danger of deult. therefore eligible for special resolution proceedings. these are just two of the vague and undefine ttrms with in this bill. i am sure there are others. the mostgregious example of why this legislation has to do with absolute neglect of any series treatment offthe government sponsored enterprise as we know as fannie and freddie. there were intervaa players a the collapse of the housing market that precipitated fear, panic, lack of trust and aaa ratings and ultimately the freezing of financial markets and economic activity around the globe. the ensuin

secondly, it strengthens the fdic insurance fund, amending title 3. it would increase the statutory minimum target for the fdic loss insurance fund from 1.5% to 1.35% for estimated insured deposits. the fdic would have an additional four years until the year 2020 to meet a higher minimum targets. in setting the assessment necessary to raise the minimum target from 1.5% to 1.35%, the fbi's i shall -- the fdic sell- off offset this on depository institutions that have less than $10 million in assets. banks with under $2 billion in assets will not pay for this increase. the last time the conference met, we adopted an offset by proposing a financial crisis assessment. we've heard from another -- a number of our colleagues about concerned with that provision. and so we have proposed a strike that. -- we have proposed to strike it.

instead of making the fdic and other regulators send a clear and consistent message to our nation's banks, this congress feels throwing more money at the problem will fix it. in february, bank regulators both state and federal, issued a joint statement providing guidance to banks and to credit unions, encouraging them to make loans to creditworthy small business borrowers. the regulators described the guidance as intended to quote, emphasize the financial institutions engaging in prude intersmall business lending after performance -- prudent small business lending after performing a review of the borrower's financial condition -- however reports from the field show a much different picture. i hear from bankers in my district and across our state that there is capital to lend. however i also hear from those same banks that they are nervous and anxious about the unpredictible regulators' response and scrutiny of their regulatory capital rishos and loan requirements. . for many banks it's easier and better to ride out the storm by hoarding their cash than to justify every penny they lend to

that is an issue where the fdic's basic framework is the most reliable resource we have had. >> so we are all clear, the numbers come from the bank's examiners. they're not numbers we%- generated. >> i am a great about the challenges, i just did not want my agreemmnt to be about the numbers. we have a very elaborate the country for dealing with the challenges facing our nation of 9000 community banks. that process was designed in th% wake of a series of past crises. that gives it government the ability to help%those banks manage through, and help facilitate the restructuring ahead those banks that are uuder pressure have a lot of options. they can raise capital. they can shrink lending. you also have to point out that the programs we designed from the beginning are only available for banks that we believe would be viable. these are important programs because they will help the banks face less need for shrinking balance sheet. >> i am over. i just want to make sure that there is no reason to change anything, we will stay steady on the same course? >> i am a very careful, pragmatic pers

under the pending financial reform legislation help to solve this problemm where did treachery, the fdic, the sec, and the cftc expect to find these super-regulators who are competent to call out systemic risk that others have missed? even though systemic regulators have timely call about risk, how will they convince other regulators, the global financial -- the global financial community and congress that the worries are significant and could be a great cost to taxpayers and the financial community? why it former federal reserve chairman paul volcker in an interview state that the resolution authority provided in the proposed financial package is a "workable proposition for anything short of the biggest banks." does chairman volcker believe it will be all but impossible to liquidate in an effective manner? does he believe that tarp, too, will be required? why did treasury released a press release and pine that the tarp program has been profitable, -- implying that the tarp program has been profitable, even though the congressional budget office expects taxpayers to lose approximately $1

the cost of fdic insurance premiums are skyrocketing for community banks. higher insurance rates mean less lending. small businesses could crawl the job -- could grow the job that our nation desperately needs. individuals and small businessee are also paying the price. the ftse reported that into the asinine, the bank industry reduced lending by 7.4%, the biggest decrease since 1942. i am a strong believer that we will build an economic recovery from the ground up and small and business -- and a small and medium-size businesses and not getting the capital they need, something is wrong. the economy simply will not recover unless we free up lending. americans are demanding transparency and accountability from thhir government and from their financial system. we are here on their behalf and i know we all take that responsibility very seriously. america's consumers and businesses to serve on ron -- deserve strong reform and the most honest and reliable financial markets in the world and i look forward very much to working with all of my colleagues today to reac

i mean, fdic covers our savings, correct? they got to go back and separate the bank system. my brother-in-law used to work for lehman brothers, and they made a lot of money years ago. but i don't know if they did this bull -- host. . whoa. let's move on to dallas, texas. good morning. good morning, sir. caller: thanks for taking my call. host: good morning. caller: my call goes to the situation with fannie and freddie, who used to be one of the cornerstones of many, many mutual funds and were one of the rocks that helped the new york stock exchange in place for many, many years. now they're derided for this morning crisis. my comment goes to the conservatorship of the government since they've taken over. it seems they've done almost everything in their power to run both of these agencies straight into the ground, all this legislation that they just passed to control these mortgages. they've been continuing to do it and spending billions and billions of dollars and driving these companies farther and farther into history, and i'm just wondering what the purpose of their conse

have no tools or legal ability to prevent it, we would have a set of rules and procedures whereby the fdicwould be able to come in and close down that company in a way that was safe for the system. that is absolutely critical. the third idea would be that every company would have to have a living will which says it tomorrow morning they cannot make their payments and this company is on the border bankruptcy, here is a detailed description of how this company will be disassembled and broken down and put into receivership in a way that will be quick, clear, clean, but will not destroy the financial system. too big to fail is the acid test and if we can make sure that does not exist, we will have eliminated the most dangerous aspect of this. >> you think this will be more helpful overall? >> i do. there are many different parts to it. i would not deny that there are some things i would change. overall, i think it does address the too big to fail problem. part of this is the legislation but there is also what the regular as are doing and they are working right now to raise the amount of capita

the premiums that the agency collects from the company's -- companies are like the fdic. it is insufficient to cover the deficits. the bush should ministration and congress back in 2006 -- the bush administration and congress passed a bill intended to improve the status of pension plans. they wanted to make sure they got to fully funded status over seven years so if there were distresses with the corporate parent that there were negative implicationn on pensions or burdens on taxpayers. the problem is we have the more recent economic doonturn in the markets. they have deteriorated substantially. companies have come back to congress and said they cannot this environment. otherwise we will have to close plants, cut jobs, etc. please allow was some more latitude to not make those more stringen obligations.3 down the road. the economy turns around and trust us to make good. host: we have an e-mail rom san diego. our e-mail is journal@cspan.org. "the entire narrative of how this happened it is a cautionary tale of nearly epic proportions." guest: it really is. another way to l

the systemic council that is made up of all banking regulators, including the fed and the fdic and others, will have veto power over some of its decisions. if it threatens the financial stability -- which is not an easy -- it is a high board to set. -- high bar to said. the agency will be independent and it -- another compromise was that it will not regulate the smallest banks directly. that the bank regulators will be looking at their consumer products. but all of those -- the consumer protection bureau is coming to life. and it idea behind that one is that the subprime products, the heart of the crisis, will not be any longer allow the because a different regulator will look at how these consumers are being tricked into such products and will stop banks from doing so. so, it sounds like a good thing. host: yalman onaran from bloomberg is our guest. the topic is the deal were reached on the financial regulations bill. of the first call comes from palm coast, florida, jackie. caller: first of all, i enjoy your show. it is really sad -- yes. first of all -- host: we are listening. go ahead

that is an issue where the fdic's basic framework is the most reliable resource we have had. >> so we are all clear, the numbers come from the bank's examiners. they're not numbers we generated. >> i am a great about the challenges, i just did not want my agreement to be about the numbers. we have a very elaborate the country for dealing with the challenges facing our nation of 9000 community banks. that process was designed in the wake of a series of past crises. that gives it government the ability to help those banks manage through, and help facilitate the restructuring ahead those banks that are uuder pressure have a lot of options. they can raise capital. they can shrink lending. you also have to point out that the programs we designed from the beginning are only available for banks that we believe would be viable. these are important programs because they will help the banks face less need for shrinking balance sheet. >> i am over. i just want to make sure that there is no reason to change anything, we will stay steady on the same course? >> i am a very careful, pragmatic person

reserve people, including chairman bernanke, we've had meetings with people in the o.c.c., and from the fdic , we've had a number of meetings. and what we hear from people who are trying to borrow money to stay in business or people that have had lines of credit at their local bank for 20 years are now being told, we're not going to continue your line of credit. and when they ask, have i ever been late, have i missed a payment? what is the problem? well, our banking regulators have told us that they're going to be all other our bank and we can't handle the pressure -- all over our bank and we can't handle the pressure. if we keep loaning you money, extending your line of credit. when we versed that subject with chairman bernanke, that some of the regulators are requiring more capital and more money in reserve than is required under the law and they're putting pressure on the bank not to make loans that they've made for years and that it's loans that make banks most of their money and if you don't allow them to loan money then they're not going it make money and they're going to go under and

for example, the fdic has established an alliance for economic conclusion that is a broad-based coalition of institutions currently based organizations -- to bring all underserved populations into the financial mainstream. there are similar efforts aimed at low-income, minority, -- the examination council, it includes major regulatory bodies. moreover, an entirely new title was added to the senate bill that sets up a number of new programs for underserved communities. we can debate whether more resources is sufficient in the existing programs or whether the new title in the senate bill is necessary. those are certainly valid issues and consideration to debate. but those issues i would submit to you are not pertinent to the title that we are presently considering. macro provincial or systemic risk regulation is a subject matter of title 1. systemic risk regulation is intended to focus on matters that influence the financial stability of our entire financial system and all participants in the system throughout the country. systemic risk detection and regulation can be done at all, there is

the bank was closed down by the fdic. all accounts were frozen. i had two pennies in my pocket, a payroll to meet, kids to feed, a business to run, bank loans to pay even though the bank was closed by the fdic. opened up the next monday by new owners. i know how that thing works. you step up to your responsibilities, but i sat at my desk with my legal pad and calculator trying to make it work. i know what it feels like when you feel like there's something wrong with your brain because you can't solve a problem. there's something wrong with the people's brain that are dealing with this problem. they can't present a budget to the congress because they created an intractable budget problem, not by getting caught in an economic downward spiral exclusively but by going into a downward spiral where federal revenues are being reduced in proportion to the downward economic spiral while increasing the spending like they were in an upward economic spiral. these things are going in opposite directions. federal revenue going down, federal spending going up. t

the fdic reportee that in 2009, the bank industry reduced lending by 7.4%, the biggest decrease since1942. i'm a strong believer that we will build an economic recovery from the ground up. if small and medium-sized businesses are not getting the capital they need to grow their businesses, someehing is wrong. the economy simply will not recover unless we free up lending. americans are demanding transparency and accountability ffom their government and from their financial system. we are here on their behalf, and i know we all take that responsibility very seriously. america's consumers and businessessrequire strong reform that will ensure that we promote and foster the most honest, open, and reeiable financial markets in the world, and i look forward very much to working with all of my colleagues today to reach that goal. >> think it, senator. -- thank you, senator. i will now recognize the representative from alabama. >> thank you for conveying this conference. republicans are glad to be here to share ouu views with the american people. the legislation we are considering is not based

it is like the fdic for pension plans.n is on employers in a defined benefit world. , e 401 k plan, the risks and rewards are on the employees themselves. they often find their own peasants with our own pre-tax dollars which may not be matched by the employer. if their accounts do well, they do well. if they do not do well, then they do not collect. host: republican line, good morning. caller: i have a question about the airlines. i retired at age 58 from an airline. for the 20 years i was there i heard that they were doing me a favor by contributing to the pension. i thought i earned that pension over the course of 20 years. is it true that a non-bankrupt airline must fund the pension? my second question is that while i invest conservatively, isn't it true that pension funds like the one i am talking about invest in high-risk the emerging-market stack? guest: with respect to funding by non-bankrupt employers, the answer is complicated. there are rules on what it takes to be adequately funded. there is great flexibility i

there were banks that said creating the fdic would destroy the industry. of they said that forcin!!thered that forcing automobile companies to install seat belts was unnecessary. that clean water and air would bankrupt the economy. all of these claims were false. all of these reforms will lead to greater security and prosperity for our people and our economy. what was true then it is true today. november approaches and leaders of the of the party will campaign fiercely on the same arguments that they have been making for decades. fortunately, we don't have to look back too far to see how their agenda turns out. much of the last 10 years, we have tried it their way. they gave tax cuts to millionaires that did not need it. they put industry insiders in charge of industry oversight. they shortchanged investments in education, research, technology. despite all of their current moralize in about the need to curb spending, this is the same crowd that took the surplus that president clinton left them and turned it into a deficit. we know where those ideas lead us. we have a choice as a nat

allowing it to fail because we do not have the ability to prevent it, we have a set of rules whereby the fdiculd be able to come in and close down that company in a way that was safe for the system. and a third idea would be that every company would have to have a living will that says if tomorrow morning i cannot make my payments and this company is on the border of bankruptcy, this is a detailed description of how this company will be disassembled and broken down and put into receivership in a way that will be quick and clean and not destroy the financial system. too big to fail is the acid test. then we will have eliminated by far the most dangerous aspect. >> so you believe the bill overall will be more helpful than not. >> yes, i do. there are lots of different parts to it, and i would not deny that there are some things that i would change, but overall, i think it does address the too big to fail problem. part of this is the legislation, but there is also what the regulators are doing. the regulators are working right now to have liquidity that they have to hold. and the regulators can

part of his estate was taken over by the fdic. it seemed, for a while, that's kirk had -- that kirk had a good shot at winning. now, because of his misstatements, all of the focus has been on his embellishments. now he has had this news conference and has apologized, but there are questions about why you would do this. are there things beyond your military record? on the floor of the congress, he said as a teacher, seeing some of the kids in our country coming to school looking like they might bring guns to school. it turns out he never thought anybody above grade school. so we are still ironing out the bumps. host: what impact will this apology have? >> he had plenty of military people and other supporters cheering him on. he needed to confront this. the score may be even now between him and his opponent. i expect the lead to shift back and forth until november. host: does that mean, if democrats see an opportunity, that you might see president obama or other big democrat names come to this state? >> absolutely. i think you will

meanwhile the treasury department, federal reserve and the fdic engaged in unprecedented and coordinte efforts to sve to the cost of listings and the system by injecting liquidity, capital, people see things in securing peoples savings requiring banks to raise more capital we focus on the economic recovery we've also been aware of the need to restore fiscal responsibility. we want to see the economy and budget recover step by step. like the previous administration that inherited $5.6 trillion surplus er ten years and turned it into a large deficit the current administration was handed a $1.3 trillion deficit for 2010 alone and 8 trillion-dollar deficit over the next ten years. the recession recovery efforts have taken an unavoidable told the budget and we focus on bringing this down as the economy recovers. wheat has the statutory paygo and require mandatory spending to be paid for. the established bipartisan commission now and work to make recommendations to bring the deficit down to a sustainable level by 2015. the president is also propod to freeze long security discretionary spendi

the systemic council that is made up of all banking regulators, including the fed and the fdic and others, will have veto power over some of its decisions. if it threatens the financial stability -- which is not an easy -- it is a high board to set. -- high bar to said. the agency will be independent and it -- another compromise was that it will not regulate the smallest banks directly. that the bank regulators will be looking at their consumer products. but all of those -- the consumer protection bureau is coming to life. and it idea behind that one is that the subprime products, the heart of the crisis, will not be any longer allow the because a different regulator will look at how these consumers are being tricked into such products and will stop banks from doing so. so, it sounds like a good thing. host: yalman onaran from bloomberg is our guest. the topic is the deal were reached on the financial regulations bill. of the first call comes from palm coast, florida, jackie. caller: first of all, i enjoy your show. it is really sad -- yes. first of all -- host: we are listening. go ahead

the fdic is on track to take over more than 100 banks this year because of the lingering economic problems. many are real estate-related and it will take a while before that worked through the system, and there can be general health beyond the beltway. host: of the were saying that bankruptcy is almost synonymous with unpayable costs. how are we dealing with this issue? guest: it is part of the overall debt burden that individuals are facing. many hope that the health care bill will make health care more affordable and will reduce the incidences of the uninsured and medical expenses that can lead a family to seek bankruptcy protection. host: we have a link on c- span.org if you want to get more information from the american bankruptcy institute. charlene, republican line. caller: good morning. how are you? host: good. caller: in the early 2000's, i had a bankruptcy. host: walk us through the numbers. how much were you earning, what was your debt load -- caller: well, it was against my belief to file bankruptcy, because i work for equifax. i told people to not file bankruptcy. so what i had

fail and with no legal ability to prevent it, we will have a set of rules and procedures whereby the fdicmuch the same way it closes down failing banks, will be able to come in and close down that company that is a way -- in a way that is safe for the system for data is critical. and a third idea among many others is that every company would have to have a living well which says -- a living will which says that if they are on the border of bankruptcy, a detailed description of how the company would be disassembled and broken down and put into receivership in no way that would be quick, clear, clean, and will not restore the financial system. too big to fail is the acid test. if we can make sure that there is no concern over too big to fail, then we will limit the aspects of this. >> so you see this as being more helpful than not. >> i do. there are lots of different parts to it. i would not denied that there are some things that i would change, but overall i think it does address the too big to fail problem and it does -- and i think i should say that part of this is the legislation, but

institution should be shaky or deemed shaky, then the secretary of the treasury with the assent of the fdic and the fed, can close down an institution, they can turn it and sell it, they can take it other themselves and run it and operate it as a federally operated institution simply by determining that. maybe it's not too big to fail, although they will make that determination too, but it might be an agency a company that is essential to the low income communities, low income minority or underserved communities that gives them the latitude to treat it differently than any other financial institution. when government gets involved, huge money gets lost. and when liberals get involved and progressives get involved, huge principles of liberty and freedom are sacrificed away to try to reach some kind of formula of what they think that america should be like. martin luther king never asked for this i read almost every one of these speeches and many of his writings. i can think of nothing in his writings or speemps that i disagree with. he stuck to american principles. but this congress, under p

you're a creditor and you make that loan to a major financial institution that's too big to fail, the fdics likely going toive you back 100 cents on the dollar or very near it, you're going to do much, much better than your competitors out there. so you're going to loan at a lower cost, you're gng to loan at one full point of interest less. you're going to balloon up these large financial institution perhaps that's why the investment banks like this bill. except for this amendment that might ask them to share part of the cost. i think this is posing the problem with the underlying premise and why we should instead look at the republican alternative which is enhanced bankruptcy. >> is there further debate? >> . chairman, could i respond to one point he made? >> the gentle woman has not been recognized. she's recognized for five minutes. >> thank you very much, mr. chairman. i did want to respond to my colleague's statement on the home purccase and refinancing of mortgages. the private market has not recovered from the financial crisis and his numbers were from 2002. i happen to have the num

we will enact the volcker rule to make sure the banks protected by the safety net of the fdic tdo not engage in risky trades for their own profit. we will create resolution authority to help wind down firms whose collapse would threaten our entire financial system. no longer will we have companies that are "too big to fail." or the last 17 months,we have pass an economic -- over the last 17 months, we have passed an economic recovery act, health insurance reform, education reform, and now we're on the brink of passing wall street reform. at the g-20 summit this weekend, i will work with other nations to coordinate our financial reform efforts and promote global economic growth, while ensuring that each nation can pursue a path that is sustainable for its own public finances. at the main forum for -- as the main forum for international economic cooperation, the g-20 is the right place to discuss those issues. over the last few days, i hope we can build on our past progress and strengthen the global economy for a long time to come. thank you very much, everybody >> can you get the bill

the fedeeal reserve nd the fdic have engaged in an unprecedented and coordinated efforts to stabilize the system by injecting liquidity, capital, savings, and requiring banks to raise capital. but we, as democrats, have been focused on the economic recovery. we're also aware of the need for responsibility. we want to see the economy and the budget recover step-by-step. unlike the previous a administration, which inherited a surplus over 10 years and turned it into large deficits, the current administration was handed a $1.30 trillion deficits and more deficits over the next years. this has taken an unavoidable toll. the president has also proposed to frreze not discretionary spending for three years. there was a bill to add to our fiscal toolbox, which allows the president to sign a bill into recommend to us and the congress the elimination of some items in the building offa budgetary cost. we will continue to pursue these and other steps to pursue fiscal responsibility. we are continuing to work on legislation to address this situation. we're pleased to read chairman ben bernanke her

we will enact the volcker rule to make sure the banks protected by the safety net of the fdic to not engage in risky trades for their own profit. we will create resolution of 40 to help wind down firms whose collapse would threaten our entire financial system.