chairman of the federal deposit insurance corporation, fdic. happy new year. jamie dimon tried to fight back and basically got his face ripped off and jpmorgan is at the top of the heap. now it seems like the banks are defenseless and the government will have their way with them. what's your take on this? >> i don't think there's much that the banks can do. they would like to fight. in many cases they believe they clearly have the better side of the argument but just can't afford to take on the government. there's way too much at stake and the government has too much control over them and their future activities. it's just not feasible and economically start for the banks to fight the government. they might as well pay what the government is asking for. put it behind you. that's what they are doing right now. >> josh, you disagree with that? >> well, i agree that they have little choice but to move forward. and i think bill didn't answer and i think rightly so whether the banks actually violated and gave reason for the fines and penalties. at t

by the same token, there's a lot of discussion right now within the fdic and doj about online lending and those sorts of things, and we've actually found people within those agencies who, because of personal bias, have tried to, basically, shut down those industries. and they have admitted such to us, and we have them on record to that effect and have had lengthy discussions with the fdic and doj. and both of them have as a result of those discussions and the investigations of the oversight committee, or i should say potential investigations, have given us a letter to not only us, but the industries saying that they are going to allow these industries to continue. they believe that they're worthwhile. any abuse that's been, that has taken place will stop. these are legitimate industries as long as they behave within the confines of the law. they will be allowed to continue to do so. and i would like your opinion on that, and if we could perhaps get you to also do a letter similar to that, as what they've done, to say as long as these lenders are behaving within the law, that they have

have talked about dodd frank and all the regulators, the fed, the controller, the currency of the fdicregulatory people are met for cally standing over the shoulders of the bank people and stopping them from offering traditional banking services, lending services, credit card services. that can't be a good thing. is that what you're saying? >> that's exactly right. in other words, what happened is that the cost of this regulation has passed to the consumer and to small businesses. a simple example. there was a thought under the legislation that they were going to empower small banks and weaken big banks. the fact is that every 21 hours for the last 27 years we've lost one small bank in the united states. that's 11,200. no one, as i said, wants to open a small bank. if you look at small businesses, we've seen the economy grow since 2008. we've seen bank assets grow but loans to small businesses if the fdic numbers are correct have gone down. so the net effect is what we're doing is we're so overregulating the system that the money which is being created by the fed is not getting to the

the changes made by fdic -- >> you argue that this will make banks more like utilities.why is that a bad thing? >> the thing i worry about with the volcker rule is that we told the banks they cannot trade for their own account. we sequester that capital in the bank. if you want to go down that road, let's divide the bank. >> one only -- >> we are. >> we are not charging them. we are paying them. >> you are charging them more than you used to. it is punitive for a bank to make a mortgage and hold a portfolio. >> i want to get in front of a number of pundits. can you predict this year or next year the goldman sachs will be different? >> their strength is that they change quickly. the other broker-dealers have to -- >> will they stay a bank? >> is ultimately a legal and financial decision. >> dodd frank says they will stay a bank. >> the question is will they have time? -- willatering down this have material impact on earnings? >> it already is. thanks can take a dollar of capital and put it behind a single family home loan. or you can buy four dollars -- what will they do?

the occ and fdic in 2013 issuing stern warnings to financial institutions over such predatory lending practices. both agencies argue advanced deposits with their steep interest rates and short pay back windows pose big risks to consumers. many of those consumers would agree. just ask the handful who are suing cincinnati-based fitz third bank over its program. the third service lets the customer take out an emergency loan, up to $2,000, charging $1 for every ten borrowed. the bank then pays itself back no later than a month afterward when the next paycheck hits. it seems simple enough. banks warn it's expensive credit, up to 120% annualized. but advocacy groups say it's actually far higher since these loans are outstanding for just an average of ten days, the center for responsible lending says the real interest rate, 365%. at the end of this month, fitz third will end is access program. similarly wells fargo, leige legions financial and bank of america. they acknowledge the alternative is risky. >> the customers who value and use these products will have to go to unregulated or underr

former fdic chairman from never80's, a fellow who got on a high moral horse. heving the ,ecame the chairman of a bank definitely a critic of legislation, and one of the things that happened after he got there, fifth third got in trouble for violations by the security and exchange commission . nobody says he is associating himself with this fraud outfit. "what a shame he would do that." but sheila bair is different. profile in courage awards by the kennedy center. we not want something with her experience and expertise? this is what we wanted all of the time, and now we are getting it. is what ir a break, say. >> something happened here. we all ended up agreeing. is a positive. thank you for joining us. >> when we come back, ups. we just got off the phone with the company cfo, and we will bring you that conversation when "market makers" returns. ♪ >> welcome back to "market makers." i am stephanie ruhle. profits fell, thanks to issues with holiday delivery. carol massar just got off the phone with the company's cfo. i love seeing you in the brown uniform. >> he

how will you assess the regs put out, the higher capital standards by the fed and occ, and fdic? how will you assess as they go into effect if you need higher capital requirements, not just, i mean certainly the surcharges but how will you assess the effectiveness of those? >> there are, you know, studies of an attempt to estimate what the too big to fail subsidy is in the market. while there are a lot of question marks around those studies we can look to see what's happening there. >> you believe there is a subsidy as -- >> will the senator wrap it up? >> that is my next question. do you believe there is subsidy as bloomberg pointed out, some others, 10 of billions of dollars a year for the largest banks? >> i think there are different methodology that is are used in different studies and it's hard to be definitive, but yes most, i would say most sudden did is point to on some sub is i did i that -- subsidy that may reflect too big to fail although other factors may account for part of the reason that larger firms tend to face lower borrowing costs. >> thank you. i'm sorry, mr.

maybe we shouldn't federally subsidize the banks with fdic insurance.u want insurance you have to separate out your securities part from your banking part. adam: going back to 1998. >> what is wrong with that? we didn't have a financial crisis then? adam: that will be part two, charlie just said. lori: while you gentlemen were talking, while we were talking, the dow moved higher, up 10 points now. turning positive moments ago. keith bliss of cute tone and company on the floor of the new york stock exchange. lot of action today. state of the union and what is on your radar? >> volatility is creeping back into the market and for us the 20 level on the vix is always an important benchmark level we take a look at and we monitor and we're getting close to that. the bottom line on the markets we had such vast volatility we're vastly oversold on s&p and dow and vastly overbought on the vix level if you call it that, keep an eye on the vix if it moves up to 20. vix tells you implied volatility inside the market the next 30 days. what that implies, neither movin

and the fdic is smart to answer the question. about out criminal referrals, they look at what crosses the door, which is criminal referrals from the banks aiming at little people, the minnows. >> those of us at the tail end of things who end up paying, either in your taxes or anything else. we appreciate you being with us, phil black, professor of economics and law at the university of missouri. he said the best way to rob a bank is to own one. and we appreciate you being with us. thanks. >> thank you. >> after the break, the cold shoulder, everyone got it. the wrath of the polar vortex, next. >> you probably didn't realize this already, but we're already living through the most brutal winter snap in decades, every place in the country frosted over by the super cold. 17 deaths have been blamed on the cold on tuesday alone. thousands of people living without power, and rolling blackouts. the deep freeze has put all of us out in the cold. >> this is no ordinary winter storm. it's a brutal biting, a potentially deadly arctic blast.

towards over a period of years having a fund that banks contribute to that is loosely modeled on our fdic. we don't think it's big enough or fast enough. as i look to the future, the challenges of 2014 and beyond have to deal not with what were the risks in 2008, but what are the risks in 2014 and beyond? we are focusing heavily on shadow banking. >> banking that happens outside of the regulated banking system. >> money sloshing around that is not -- >> there is a natural shift of money from the more controlled environment to the less controlled environment and the risks are not always as visible because of a lighter regulatory presence and because of a lower set of requirements. so that is an area that we are focusing on. my international colleagues also are focusing on it. we have made progress. we can make more. cross border resolution. this gets to your question about the differences of standards. we learned from the collapse that the problems when a major financial institution fails don't respect international boundaries, the transactions don't live within one country. the implicatio

that an investor puts in is not fdic protected. deposit so you could potentially lose your investment but you have to adhere as the same regulations as a bank in lendings correct? i'm curious why the big banks afraid of you? wells fargo prohibits any of their employees to invest personal money with you. >> investors make a investment. it is not deposit or fdi insure. they can lose money if the investment doesn't perform. it is important for investors understand the risks and reward attached to the investment. we invite investors to diversify as possible. so any default doesn't have a big impact on their portfolio but, generally i think the reason why it becomes better for borrowers and investors, it is generally a better deal than what the banks and credit card companies can offer just because we operate as a marketplace. we're fully online as well. we have lower cost structure than the banks. in terms of regulations it's, the investors side is regulated by the sec. so it is a public offering of notes. we just registered with the s

and the fdic is smart to answer the question. about out criminal referrals, they look at what crosses the door, which is criminal referrals from the banks aiming at little people, the minnows. >> those of us at the tail end of things who end up paying, either in your taxes or anything else. we appreciate you being with us, phil black, professor of economics and law at the university of missouri. he said the best way to rob a bank is to own one. and we appreciate you being with us. thanks. >> thank you. >> after the break, the cold shoulder, everyone got it. the wrath of the polar vortex, next. consider this: the news of the day plus so much more. >> we begin with the government shutdown. >> answers to the questions no one else will ask. >> it seems like they can't agree to anything in washington no matter what. >> antonio mora, award winning and hard hitting. >> we've heard you talk about the history of suicide in your family. >> there's no status quo, just the bottom line. >> but, what about buying shares in a professional athle

and the fdic is smart to answer the question. about out criminal referrals, they look at what crosses the door, which is criminal referrals from the banks aiming at little people, the minnows. >> those of us at the tail end of things who end up paying, either in your taxes or anything else. we appreciate you being with us, phil black, professor of economics and law at the university of missouri. he said the best way to rob a bank is to own one. and we appreciate you being with us. thanks. >> thank you. >> after the break, the cold shoulder, everyone got it. the wrath of the polar vortex, next. the stream is uniquely interactive television. in fact, we depend on you, your ideas, your concerns. >> all these folks are making a whole lot of money. >> you are one of the voices of this show. >> i think you've offended everyone with that kathy. >> hold on, there's some room to offend people, i'm here. >> we have a right to know what's in our food and monsanto do not have the right to hide it from us. >> so join the conversation and make

essentially speaking for all the regulators, the federal reserve and the fdic and others, said that more than 99% of american banks were highly capitalized at the highest of standards. it would have been very difficult to get any form of legislation through that would have raised the capital requirements. and so the problem basically is as we are sitting there as a central bank knowing that we have just been in 2005 in and 2006 a period of extraordinary stability and the euphoria is starting to build because it's not altogether crazy to believe this long period of stability, that the next six months are going to be stable. in other words it's not craziness. the problem unfortunately is how it happens is that the system not only breaks down the necessary condition for when it breaks down is that nobody expects it to happen. there were an awful lot of people who were out there saying no, we forecast where they forecast what everybody forecast. we were in a bubble and it was going to break. i know of nobody who got september 15, 2008. as i go in the book i explain why that happened that way

how will you assess the regs put out, the higher capital standards by the fed and occ, and fdic?

there is a bigger investment, but it's really not too much, and the iras are federally insured by the fdic're a better deal, much more flexible for the typical investor. that stuff is already there and in place. >> the president says you can make it easier with this my r.a. because of automatic deductions from your paycheck. listen to this. >> workers contribute through automatic deductions in your paychecks, just like those of you who have an employer-sponsored pension. >> it would make it easier. go ahead. >> isn't that great? he's going to ask employers, particularly small employers, guys like me, i have ten people in my company, to help administer and get the plans ouz bought we don't have mf to do, we're not filling out tax forms and paperwork and going through health care reform and all the other bureaucracy. we have plenty of time to administer new pension-kind of plans that the government is asking us to do when there are plans in place. most of the customers i have have 401(k)s in place. for employees to get an ira, it's simple to do. don't make the business owners go through more

towards over a period of years having a fund that banks contribute to that is loosely modeled on our fdic we don't think it's big enough or fast enough. as i look to the future, the challenges of 2014 and beyond have to deal not with what were the risks in 2008, but what are the risks in 2014 and beyond? we are focusing heavily on shadow banking. >> banking that happens outside the regulated banking system. >> money sloshing around that is not -- >> there is a natural shift of money from the more controlled environment to the less controlled environment and the risks are not always as visible because of a lighter regulatory presence and because of a lower set of requirements. so that is an area that we are focusing on. my international colleagues also are focusing on it. we have made progress. we can make more. cross border resolution. this gets to your question about the differences of standards. we learned from the collapse of leam that the problems when a lehman that the problems when a major financial institution fails don't respect international boundaries, the transactions don't liv

treasury, fed, fdic, other financial regulators, dodd-frank, post-financial reform and crisis.the matter doesn't deny reports that fsoc is in early stages to whether to designate warren buffett's berkshire hathaway a nonbank sifi, systematically morn financial institution and so big and interconnected they have to give it more oversight an regulation. in fact berkshire hathaway as you know has billions in financial operations an investments. owns out right geico auto insurance. general re insurance and big takes? american express an wells fargo. the f zock gone affirms like berkshire hathaway last year -- fsoc. designated 3:00 nonbank financial firms as sifis. aig, ge capital and prudential financial. so mom meant from the fed tore -- comment from the fed and treasury on the story and no comment from berkshire hathaway. david: you heard hit here first through peter barnes. thank you very much. we asked you on twitter if you thought herbalife is a solid company or a pyramid scheme as some senators are now saying. at crime busters saying amazing chasm between pyramid and solid co

>> well, the concern is, obviously, that it's still an illegal drug under federal law, so the fdic hasions about banks not engaging with businesses that deal in that kind of stuff, but there's so much cash involved with this business, that there's got to be a solution somewhere, and so that's why denver is really feeling the urgency of help us out with this and act more like normal businesses, as denver has been treating them. >> we're just starting to get a sense of the broader implications of this. there was one dispensary owner who said denver will become the napa valley of pot, and i think some hotels are looking into cash in on tourism for pot. take a look. >> publicly, just saying, hey, this is what we do, and advertising it now may start to change because the laws are changing. it's a new dawn right now for all of this. >> so, i guess hotels that wouldn't allow cigarette smoking are encouraging people to come and smoke pot there. i mean, what are you seeing in terms of the breadth of businesses trying to cash in on this? >> well, it runs the gamut, if you think about it. i did i

that of course piques the interest of the fdic.re issued against such predatory tactics. banks threw in the towel. this was a high revenue generating product for them. think about the interest rates, you don't get those anywhere else. but it's not really safe practice, sound advertising. there were problems with it. >> it was too hot, sounds like to me. too sensitive. another sensitive area along these lines, wells fargo apparently banning its employees from lending their own money on peer-to-peer lending networks. tell me about this, and why they are taking this step. >> we talk all the time about looking for yield, looking to find a return on your investment and it appears that some of the employees at wells fargo were putting their own money into some of these peer-to-peer lending platforms. you think of the popular ones, they are lending club which google owns a stake in, you think of prosper. there is even one called sofi which is short for social finance which helps students refinance student loans. >> what's their objection

to deposit ratio, harvesting more deposits than any other bank in america according to the fdic. loans it has outstanding keeps dropping. should we be outraged like a number of 57%? >> i am not sure we should be outraged. things are also a lot of -- under a lot of treasure. thanks should be lending money. companieshe larger trying to thwart small businesses. there are many things that do a good job on this. clearly the banking industry has not been as helpful. >> interest rates at record lows. if i am a bank, white take that chance? -- why take that chance? anything, you will be extra cautious. you have extra regulation. >> the fact that there is not much of the spread in terms of the profits on loans. are a lot of structural reasons. that is why the community is rising. >> the lending business is bad, what about investment banking? if you take a look at investment bank compensation ratios, they are running a low 2012 levels. third quarter jpmorgan the lowest. we heard the compensation trunk just over four percent. the question is how you incentivize people to work hard and do a

we will talk to the former chairman of the fdic, sheila bair.im shall use it in him hi >> how long has it been since the volcker rule was finalized? in only a matter weeks, but others are preparing to roll parts of the bag. this is all very technical and has to do with cbo's and trust preferred securities. it does point to the challenge in reining in the type of trading that dodd frank was designed to prevent. sheila bair knows this as well as anybody. she is with us from d.c.. i would love to know where you come down on this issue. is it reasonable that banks should be pushing back on parts of the volcker rule which it admittedly in the eyes of some was tougher in its final version and many people expected? >> well, when they did finalize the rule, they simplified it, they made it a bit stronger. that was a good thing. a lot of the controversy now, i think it is kind of a sideshow. it deals with some of the smaller banks and the holdings that they have. they are not nice securities. dodd frank set a plan to face them. changing the culture of cu

fdic, credit union association, fhfa, justice, me.ou're going to see more deals. >> what is taking so long? 5 years, 6 years. >> the president created our task force in january 2012, we are moving along. >> thank you very much, new york attorney general eric schneiderman. filling us in on the details of the latest investigations. will be back with of the jobs report coming up. what is your number? ♪ >> you are watching the jobs day edition of "in the loop." life on bloomberg television and streaming on bloomberg.com. i am michael mckee with stephanie ruhle and adam johnson. >> moments away from the december jobs report, this is big. taking a look at futures, up. typically ahead of a big number, you see markets flat, today, optimists. s&p futures up 8.5 points, dow futures up 65, nasdaq futures up on must 1/3 of a percent. of a percent,/3 there is a chance we could go below 7%. imagine 6.8%. >> normally you don't do this much movement ahead of a jobs report. you must think it is going to be good. sense iss to make robert wolf, former c

i was told by the fdic that there is not a single community bank that has been launched since 2010. the systemic risk to the economy is way overboard. i hope you will make an effort to diminish that burden. >> i promise to do so. >> senator warren? >> there's been a lot of talk today about the fed's use of quantitative easing to help the economy get on its feet. the truth is, if the regulators had done their jobs and reigned in the banks, we would not need to be talking about quantitative easing. we could've avoided the 2008 crisis altogether. i want to focus on the fed's regulatory responsibilities to keep the big banks and check. i am concerned that those responsibilities are just not a top priority for the board of governors. earlier this year, the fed reached a settlement with 13 mortgage servicers in a long list of illegal foreclosure activity. the settlement was for the sum of $9 million and directly affected more than 4 million families. they never voted on whether to accept the settlement. the fed has smart, hard-working staff, but the board of governors would never delegate

reasonably quick of theh a combination fed liquidity provision, tarp, fiscal injections and actions by the fdicand other agencies as well. describedulson sleepless nights at that time, agonizing he would go down in history as the herbert hoover of the fsa and -- of the episode. described you as the buddha of central bank. did you have sleepless nights? >> sure. absolutely. think, toature, i focus on the problem. i was so absorbed in what was happening and trying to find response to it that i was not really in that reflect the mode. later on, if you are in a car wreck, you are mostly involved in trying to avoid going off the bridge and later on you say oh my god. crisis, there were very intense times during october 2000 eight times. not only were we trying to address the crisis, but trying to deal with international colleagues across the world and constantly testifying or otherwise trying to keep the world informed about what was happening. again, i was focused on the task. >> now, your partnership with secretary paulson and secretary geithner was clearly central to solving the crisis. outsider,

fdic chairman and the world bank executive committee. bob will speak on innovative public private partnerships. >> i will try to keep it brief to get back your programming but this follows so closely to what secretary donovan said. it is an evolution in the way that we and other financial institutions work on community development the way we are increasingly heading. we have now for years housing has been a cornerstone of the work that many banks have done with community development and to with teeeighteen we're not the largest but the largest provider of affordable housing in the united states what many institutions have done that has ben supported by the community investment act 70 have benefited from but where the ndp is enormous importance as it is that sometimes trapped geography it may well be needed but we cannot go beyond that. figgie in terms of a evolution of the interagency discussion of how that can happen in some institutions go to that investing where it is the greatest need not just the regulatory incentives. but housing h

quickly with a combination of fed easley quiddity provision -- fed's liquidity provision, actions by the fdic other agencies as well. >> now, hank paulsen describes having sleepless nights at that time, agonizing as he would go down in history as the herbert hoover of this episode. and i think tim geithner once described you as the buddha of central banks which -- [laughter] implies a certain level of enlightened detachment. [laughter] did you have, did you have sleepless nights? >> oh, sure, absolutely. but it's my nature, i think, to kind of focus on the problem, you know? and i was so absorbed in what was happening in trying to find response to it that i wasn't really in that kind of reflective mode. i mean, later on, you know, i was kind of like, you know, if you're in a car wreck or something, you're mostly involved in trying to avoid going off the bridge, and later on you say, oh, my god, you know? [laughter] but during the crisis, as i said, there were some very intense periods during the september/october 2008 period. not only were we, you know, trying to address the crisis, we were t

winner, the mayor of hattiesburg, whose summer youth employer program will provide youth access to the fdic money smarter:. we also have the mayor of the city of kansas city, whose bright future internship program will offer a literacy program. mayor is the mayor of tacoma. she has a program called the summer youth employment program which develops facility to the mobile app. can we give all five of those mayors a round of applause. [applause] talks that heys gets awards, but no money associated with it. these mayors are all owing to get $4000. you just got a nice placket trophy, though. plaque and trophy, though. this summer we want all mayors to encourage young people to participate. the kids win prizes after competing with financial literacy online. last summer we had 15,000 youth participate in 15 cities. this year we want to double it. 30 cities and 3000 youth. are encouraged to harm or youth in 2014. we want to thank you for that. we did a poll, and only 30% of businesses higher summer youth. we know we can do better than that. our second annual publication, partnership view, provides

focused on rebuilding the public's confidence, notably including public guarantees of bank debt by the fdic and of money market funds by the treasury department as well as the injection of public capital into the banking system. the bank stress test of the federal reserve lead in the spring of 2000 nine which included detailed public disclosure of information regarding the solvency of our largest banks further buttressed confidence in the banking system. the success of the stress test disclosures by the way was yet another example of the benefits of transparency. the subsequent efforts to reform focusedework had been on limiting the reemergence of the vulnerabilities that precipitated an exasperated the crisis. the federal reserve conference of capital analysis and review requires that large financial institutions maintain sufficient capital to weather extreme financial shocks and demonstrate that their internal processes are effective. in addition, public disclosure of the results facilitates market discipline. the basel three framework includes liquidity requirements designed to mitigate

that led the fdic to weigh in in november. underwriting standards for these loans that they do for say mortgages. look at the creditworthiness and make sure they can afford the interest you're charging them. when this came out, the banks decided they would shutter this product which leads you to believe they knew this wasn't such a healthy product all along. >> you think? >> no comment. >> dick bove has a point that just because you change regulations that the need is changed. >> what are some of the nontraditional lateenders that a lot of customers will need to go to? the regulators weren't trying to block them out. they just said look at the borrowing patterns of some of the customers, look at the creditworthiness and you see what they did. >> what a concept. thanks kayla. see you later. >>> our next guest says investors might not have it as easy as they did in 2013 when good news and bad news was good news for stocks. >> joining us right now adam parker from morgan stanley. welcome back my friend. i mean you were the high p

i have fdic and the state of ohio. if they find i'm doing something incorrectly, unfair and deceptive practices can pull that into to look at those institutions. we have to look at those regulators to be able to control that situation going forward versus trying to regulate it because when you try to regulate it, if i were to write a qm rule today, it would exclude people. i couldn't write it without excludeing. unless you tier that regulation and say portfolio lenders we're going to give you a tier to allow you to make those and take those responsibilities, i think it's a great solution. >> one other piece of legislation i introduced i would love the panel to comment on is a legislation called cfpb rule. one of the concerns i have with the qm rule as currently constructed is impact it will have on rural communities. as you may know in rural communities, access to balloon loans for example can be particularly important in agricultural context and other places. these loans will go away if they continue to be designated

i think there has been progress made by some of the steps that the fdic and the federal reserve haveplace a lot of emphasis on the so-called living wills, resolution and recovery plans that major financial institutions have to prepare. i think if that is done well and if the regulators really insist that it be done well and they get bank board of directors involved, we can rein in, not eliminate, but we can rein in too big to fail, diminish the scale of the problem, reduce the probability of severe financial crises going forward. >> his argument is it's less about how the institution sees -- leaves a will and more about knowing who is he can posed to that institution. which pension funds, which global money market funds are exposed to that. we still don't have that level of transparency. >> no, but the living wills do require that. he's quite right, we have to pay attention to who the counter parties are, who has the exposure, which markets do these institutions rely on for funding and so forth. now, those are issues that require a fair amount of resources to really get your arms aro

based in london, welcome back sits on -- bob sits on a number of committees including the fdic chairman's committee on economic empowerment and the world's bank cgap executive committee. bob will speak on innovative public/private partnerships. bob? >> thank you. thank you very much, mayor. and i'll speak -- try to be brief so we can get back to your programming. and in a way, this follows so tightly to what secretary donovan said. and i think of it as a bit of an evolution in the way we at citi and i think, i hope, other financial institutions that work on community development can are increasing hi heading. and part of -- increasingly heading. and part of that is you know for years housing has been a cornerstone of the work that many banks have done in community development. and for citi it's been an anchor. i mean, we are not by far the largest bank in terms of footprint in the united states, but we're the largest arranger of affordable housing in the united states. and part of that, i think, in terms of the work that many institutions have done have been for years also supported by th

focused on rebuilding the public's confidence, notably including public guarantees of bank debt by the fdic and of money market funds by the treasury department as well as the injection of public capital into the banking system. the bank stress test that the federal reserve led in the spring of 2009 which included detailed public disclosure of information regarding the solvency of our largest banks further buttressed conferred in theback -- confidence in the banking system. the stress test was yet another way -- example of the benefits of transparency. the sub p subsequent efforts to reform our regulatory framework have been focused on limiting the reemergence of the vulnerabilities that exacerbated the crisis. changes in bank capital regulation under basel iii has significantly increased requirements for loss-absorbing banking firms including a surcharge for systemically-important be institutions and is a ceiling on leverage. the federal reserve's comprehensive capital analysis and review or ccar, a descendant of the 2009 stress test, requires that large financial institutions maintain suf

familiar with all the programs but they're talking about making it more of an insurance program like fdicie got into trouble is when they started owning loans and taking risk as opposed to being an insurance company, insuring bonds for repayment. >> so how much of the mortgage rate is based on what these three credit agencies depend your actual value is as a human being? >> that matters a lot. once you start rates for conforming very good credit borrowers are normally what we talk about. but then after that, it is truly your credit score. its your credit score, the loan to value ratio and the debt to ratio on the property. your credit score matters a lot. it matters more and more. >> does elizabeth warren, they are the most outrageous actor. have you tried to deal with them? >> in terms of trying to -- >> they are -- you can't -- they just say no, no matter what. the cpfb, whatever it is, have you had experience? you know what i'm talking about? how do they run a business like that? >> here's the thing. >> who are their clients that don't hold them accountable to be better at what they do

well, actually there was a , posal by many economists led by an fdic former chair named isaacs, who made a proposal in late 2008, an alternative to tarp, and it could have been used to do a more effective job of getting the auto industry on its feet. the proposal was, instead of nationalizing wall street, having the government buy private assets, which is nationalizing, government takeover, by another means, rather than the government nationalizing the auto industry, taking a big hunk of the auto industry, telling dealers which ones had to close their doors without due process of law, they were an unconstitutional taking, and to the embarrassment of this country and the great judges, those who were great, on the supreme court, and the ones that are great on there now, to their total humiliation, this urt stood by and watched unconstitutional takings and did nothing. now, now it is true that during the unconstitutional illegal turning of the bankruptcy code upside down during the so-called saving of the auto industry, that ruth bader ginsburg to her credit but an auto deal on that was pro

towards over a period of years having a fund that banks contribute to that is loosely modeled on our fdic. we don't think it's big enough or fast enough. as i look to the future, the challenges of 2014 and beyond have to deal not with what were the risks in 2008, but what are the risks in 2014 and beyond? we are focusing heavily on shadow banking. >> banking that happens outside of decpwhrsh outside of the regulated banking system. >> money sloshing around that is not -- >> there is a natural shift of money from the more controlled environment to the less controlled environment and the risks are not always as visible because of a lighter regulatory presence and because of a lower set of requirements. so that is an area that we are focusing on. my international colleagues also are focusing on it. we have made progress. we can make more. cross border resolution. this gets to your question about the differences of standards. we learned from the collapse that the problems when a major financial institution fails don't respect international boundaries, the transactions don't live within one co