title 2 will fully protect investors who otherwise would have lost almost everything in the fdic bank resolution and a bank holding company bankruptcy. title 2 reduces bankruptcy systemic risk by extending a larger government guarantee and bailing out investors who have not -- would not have taken loss in bankruptcy. in the midst of a crisis, the fdic will have to use unseasoned judgment to decide how large the government bailout must be to maintain financial stability. if receivership proceeds and a title 2 resolution do not fully cover the bailout cost, the largest financial institutions will be assessed to recover expenses. but the dodd/frank requirement to repay title 2 bailout costs is less binding than it seems. what if title 2 were used in the past criseis? in the last crisis, the federal reserve began paying banks interest on their excess reserves. and they earned quite a lot on that. these payments channel taxpayer funds directly into banks. there is nothing in dodd/frank that precludes the government from using this channel to provide the largest institutions with funds they

the board of governor and the fdic has to a prove the plans. if in their judgment the plans don't facilitate a bankruptcy they have the right to say. these plans are nothing of the sort. the key to pre-package bankruptcy is creditor acceptance of the debt restructuring plans. but creditors don't approve the plans and are not obligated to follow the plans should they enter bankruptcy. if title one doesn't do the job, dodd-frank has title two. it is supposed to remove the risk that the failure of a large institution will cause financial instability without government guarantees or bailouts. but title two doesn't do this. using the fdic strategy, it will make tranquility by ensuring all of the subsidaries. in other words, title two will fully protect investors who would have lost everything in an fdic bank resolution and bankruptcy. title two reduces bankruptcy risk by extended a larger government guarantee and bailing out investors who don't take loss in the bankruptcy. they will have to use their judgment to decide how large the government bailo

he was at the fdic, on the fdic board. was one of great frustration. there were a lot of disagreements, and i felt as opposed to being a partner in trying to make sure these banks were stable, it was an impediment. i also think just having so many regulators can complicate supervisory response in rule writing, and so having a framework where you had the fed as holding company regulator and the fdic as regulator of insured banks seems to me to headache some sense, that -- make some sense. that it was done before tom got here, i think tom's showed tremendous leadership here. i think occ examiners are some of the best in the country, you know? they really have been topnotch. i don't think we should abolish the occ anytime soon, but let me tell you something else which i think would make occ a stronger agency, dealing with their funding base. they have to rely on examination of fees which is difficult, especially as the industry has become more and more concentrated. the fed and the fdic have the advantage of having separate funding sources from institutio

he was at fdic, on the fdic board, was one of great frustration. there were a lot of disagreements. and i felt, as opposed to being a partner in trying to make sure these banks were stable, it was an impediment. i also think just, having so many regulators can complicate supervisory response and rule writing. so having a framework where you had the fed basically holding company regulator and fdic regulator of insured banks. that would be a merged fdic, occ entity seems to me to make some sense. it was done before tom got here. i think tom made, showed tremendous leadership here. i think occ examiners are some of the best in the country. you know, they really have been top-notch. and i don't think the congress is going to abolish occ anytime soon but let me tell you something else i think would make occ a stronger agency which i think most of the occ folks agree with, dealing with their funding phase. they have to rely on examination fees which is difficult, especially as industries become more and more concentrated. the fed and fdic have advantage of separate funding sources from in

i wanted to follow up on a letter that i sent to the federal reserve, the occ and the fdic. it's regarding the liquidity coverage ratio standard. i've heard from a number of -- i've heard a number of concerns from communities in north carolina about the exclusion of the municipal securities from the high quality liquid assets designation. in particular, i'm concerned that this exclusion of the municipal securities could restrict the ability of state and local governments to raise the capital that they need to finance these public investments in schools and hospitals and roads, airport, and all the other infrastructure systems. and these projects are really the cornerstone of the u.s. economy. what is the justification for excludeing these knmunicipal securities, which other types of debt, including foreign sovereign debt, are covered? it seems like a strange outcome to me for the debt of some foreign countries to be treated more favorably than the aaa-rated debt of states like north carolina. >> so let me say, this is a proposal we've put out for comment, and we'll look very

this subsequently caused me significant difficulties in the fdic. >> dr. kubiak let me ask you who stop you from doing this analysis? >> there was never meeting to plan how they would even be an analysis of how the basel implementation of basel iii should even be measured. a paper fully drafted appeared in my mailbox for me essentially to agree to. >> would you say that they were trying to inflate the benefits or underestimate the cost? >> absolutely and i can give you specific examples of that. my comments are exactly to that effect. it's interesting that subsequently in the fall when there was a negotiation among the basel committee membership to try to get to figure out where the capital ratio should be chairman bear was trying to get the ratio higher. the fed wanted a lower lenient ratio and chairman baer referred to this basel study as evidence that it didn't hurt things to raise the ratio. governor trujillo called chairman baer that my critique of the paper asking her how she could use that discussion to strong arm for higher capital when her own ban

i wanted to follow up on a letter that i sent to the federal reserve, the occ and the fdic. it's regarding the liquidity coverage ratio standard. i've heard from a number of -- i've heard a number of concerns from communities in north carolina about the exclusion of the municipal securities from the high quality liquid assets designation. in particular, i'm concerned that this exclusion of the municipal securities could restrict the ability of state and local governments to raise the capital that they need to finance these public investments in schools and hospitals and roads, airport, and all the other infrastructure systems. and these projects are really the cornerstone of the u.s. economy. what is the justification for excludeing these knmunicipal securities, which other types of debt, including foreign sovereign debt, are covered? it seems like a strange outcome to me for the debt of some foreign countries to be treated more favorably than the aaa-rated debt of states like north carolina. >> so let me say, this is a proposal we've put out for comment, and we'll look very

and my understanding is that neither the fed nor the fdic said that those plans were not credible. it then submitted plans in 2013, and neither the fed nor the fdic said they were not credible and it has smitted plans in 2014. so i'm not quite sure on whether you're seaying the plans are not credible and you're continuing to talk with them and asking them to change your plans? is that the case? >> well, we're working to give these firms feedback on their second round of submissions, and i think what we need to do is to give them a road map for where we see obstacles to orderly resolution under the bankruptcy code. >> well -- >> and -- and to give them and opportunity to address those obstacles. >> i appreciate that you're doing that, but the statute, it seems to me, is pretty clear here. that it's mandatory that these plans be submitted each year, and that each year you determine whether or not the plans are credible. and i guess the question i'm asking is, have they ever gotten to a plan that you can say with a straight face is credible? >> well, i've understood this to be a proce

it then submitted plans in 2013, and neither the fed nor the fdic said they were not credible.s submitted plans in 2014. so i'm not quite sure on whether you're saying the plans are not credible and you're continuing to talk with them and asking them to change their plans. is that the case? >> well, we're working to give

and this subsequently caused me significant difficulties in the fdic. >> dr. kupiec, let me ask you, who stopped you from doing this analysis? >> there was never -- there was never a meeting to plan how there would even be an analysis of how the implementation of basel-3 should even be measured, how it should even be measured. a paper fully drafted appeared in my mailbox in june for me essentially to agree to. i don't work like that. >> so would you say that they were trying to inflate the benefits and underestimate -- >> oh, absolutely, and i could give you many specific examples of that if you wanted to go into details. and my comments were exactly to that effect. and it's interesting that subsequently in the fall, when there was a negotiation among the basel committee membership to try to get the cap -- to figure out what the capital ratio should be in the final rule, that chairman bair was trying to get the fed to get the ratio higher than they wanted. the fed wanted a lower, more lenient ratio. and chairman bair referred to this basel study as evidence th

because the fdic would use money borrowed from treasury to facilitate a wind-down if you needed it. i remember when the financial reform bill was in this committee, it was the democrats on the committee that wanted to avoid the need for the fdic to borrow from treasury by creating an up-front resolution fund paid through assessments on financial institutions rather than taxpayers. but i also remember that it was the other side of the aisle who demanded that the up-front resolution fund be removed because they claimed it was -- you guessed it -- a bailout fund. now, i would like you to go back to the financial bailouts of 2008 and 2009 and tell us if there was any such action that we did back then that we could do now under the new rules of dodd-frank. dodd-frank actually said that there is no legal authority to use public money to keep a failing entity in business. the law actually forbids it. and it repeals the power the federal reserve had to extend funds to any financial institution as with the bailouts with aig. so would you go back to this point? because this is a point we hear

i wanted to follow up on a letter that i sent to the federal reserve, the occ and the fdic. it's regarding the liquidity coverage ratio standard. i've heard from a number of -- i've heard a number of concerns from communities in north carolina about the exclusion of the municipal securities from the high quality liquid assets designation. in particular, i'm concerned that this exclusion of the municipal securities could restrict the ability of state and local governments to raise the capital that they need to finance these public investments in schools and hospitals and roads, airport, and all the other infrastructure systems. and these projects are really the cornerstone of the u.s. economy. what is the justification for excludeing these knmunicipal securities, which other types of debt, including foreign sovereign debt, are covered? it seems like a strange outcome to me for the debt of some foreign countries to be treated more favorably than the aaa-rated debt of states like north carolina. >> so let me say, this is a proposal we've put out for comment, and we'll look very

we also have sheila bear who is a former chairman of the fdic and currently serves as a senior adviser to the charitable trust and finally we have a partner at the law firm and formerly served as the council of the occ. i would like to kick off the discussion by asking each of the panelists to provide ten minutes is a very brief amount of time, ten minutes for opening remarks and then the remainder will be devoted to the discussion followed by a few questions in the audience. the backdrop for this panel is the paper from 1982 titled our special. so we welcome your views. >> thank you all for joining us today for a very full agenda over the course of the day. i will not succeed. first of all i want to say that i have made copies of the bank special available out here someplace and i also made available a follow-up paper that i wrote a succeeded as president and asked me to write a sequel in terms of how does the world look now compared to where i wrote the original piece in 1981 and 82. i think i can summarize what the essential philosophy of the special asset was and what it basically

fdic and fed in certain way had similar variations in price. if you look at bank holding companies that were originating subprime loans, they were not being originated in the depository institutions. prime example might be countrywide. the largest originator of subprime loans at both national bank and later a thrift, the loans were originated in a nonbank, state-regulated affiliate, holding company level. now i'm not criticizing my good friends in the state banking system because these were not banks. they were being state regulated. at the time there was very little authority to state banking regulators to regulate these activities. now there is a lot of authority and we'll see improvements but at time the loans were being originated it was being originated in state institutions that had very little regulatory authority. now why is it important to have preemption? we've heard the controller state of national standards, more effective, less costly, they're beneficial but there is also an important factor involving safety and soundness. the indi

the fdic did a study. it shows that the 3200 counties in this nation, 1200 of those counties, roughly one in three counties is only served by a community they. that's the only source of commercial banking services to the citizens of those counties. if you add up the populations of the counties, it is short of 20 million people. the only physical presence in that county as community bank. so asset constant creation is a driver of consolidation and mass diminishes access to banking services for millions of americans. as americans and as 1200 counties. asset concentration taken to an extreme view stories free market capitalist system. our free market capitalist is based on competition and diversity. as you take asset concentration to the extreme, there is no diversity. you become a cyclops. we have the coptic banking system, one giant i stomping around. that doesn't promote diversity. right now we have an oligopoly. we are headed to a monopoly. and how does that encourage competition and diversity? short answ

fdic [captioning made possible by the national captioning institute, inc., in cooperation with the united states house of representatives. any use of the closed-captioned coverage of the house proceedings for political or commercial purposes is expressly prohibited by the u.s. house of representatives.] the speaker pro tempore: on this vote the yeas are 367 and the nays are 55. the bill is passed. without objection, the motion to reconsider is laid on the table.

we welcome former fdic chairwoman, sheila bair. thanks for coming in. no concrete plan how to shrink the fed's huge portfolio. does that concern you? >> i think it is going to be a challenge for them. overall i'm glad they're thinking about how to get back to a more normal interest rate environment and that includes somehow dealing with this massive portfolio they have amassed but i think they need to be very careful. i hope they look at conventional tools they have to raise interest rates before they start for raying into potentially new facilities. i think it creates potential instability. david: this may sound like simplistic question and it is but the answer is anything but sim policetic. how will they eventually raise rates? it is not like oil days when they literally raised rates. now there may be new mechanisms to do that. explain. >> traditionally they have done it through the open market operations which basically means they sell treasurys to get what they call the overnight fed fund rate up. whether they can do that, given the massive excess r

he was at the fdic on the fdic board, was one of of great frustration. i felt that opposed being a partner, it was an impediment. i also think having so be regulators can compromise supervisory response. and you hadded holding company regulator. that would be a merged fdic/occ entity, seems to me to make some sense. i think tom showed tremendous leadership here. i think occ examiners are some of the best in the country. they really have been topnotch. and i don't think the congress is going to abolish occ any time soon. i think most of the occ folks here would agree with, dealing with the funding base. they have to rely on examination fees which is difficult especially as the industry has become more and more concentrated. the fed and the fdic have the advantage of having different funding sources. some combination of shared fed fdic funding i think would make it a stronger and more independent agency. that's something i would hope would be in the short term doable. i think tom has done tremendous work here. i do think the examiners are some of the best

dp deposits usually stay with the bank you can go to the fdic website. insurance total deposits have increased throughout the financial crisis. yes, people were taking their deposits out of these troubled institutions. they were not putting them under their pillows. they were putting them in banks that were safe. it means the business shifts from miss mmanaged banks to oth banks. the blue line is auto sails and the housing starts. they followed each other down during the recession. they are subject to a lot of the same economic forces that drive them. the big spike in the auto is cash for clunkers. we basically went back to trend. it didn't change things in the long run. the point being here is despite the fact that we don't have a gsc for auto loans. i recognize we did bail out a couple of auto companies. that said it doesn't affect the finance side as much. we saw autos recover the same rate with the economy. this is a similar chart with the mortgage market being the hump shape and the other chart is consumer borrowing not including autos so short term

the fdic board. it was one of great frustration. there were a lot of disagreements. i felt as opposed to being a partner, he was an impediment. i think having so many regulators can complicate supervisory response. having a framework where you had the fed and the regulator over the insured banks, that would be a merged fdic-occ. it seemed to make some sense. i think tom shared tremendous leadership here. the examiners are some of the best in the country. they have been top-notch. i don't think congress will abolish it anytime soon. something else is dealing with their funding base. they have to rely on examination of these which is difficult, especially as the industry has become more concentrated. they have the advantage of having separate funding sources. trying to figure out a new structure, there is some combination of shared funding that would make it a more strong and independent agency. that is something i hope would be doable. if you want me to complement tom, i think he has done tremendous work here. i do think the examiners are some of the best and most sop

we also have sheila bair, the former chairman of the fdic and currently serves as a senior advisor. was ay, we have ray nater partner at his firm. he formerly served as a deputy chief counsel. i would like to kick off the discussion by asking each of our panel is to provide 10 minutes for opening remarks and the remainder will be devoted to a discussion followed by a few questions from our audience. the back drug for this panel is a seminal papers that were penned in 1982 titled "our banks special?" special?"nks we welcome your views. >> thank you very much. somewhat provocative agenda over the course of the day. i will deviate from my usual pattern and not be provocative. i probably will not succeed. all, i have made copies available someplace at here. 2010 imade available our think it was? me. stern succeeded he asked me to write a sequel in terms in how did the world look now compared to when i wrote the original piece. think i can summarize it maybe a minute and a half with the the bank philosophy of essay was. trying to come up with a coherent and tight definition of deliberate

so the fdic and the fed certainly had similar regulations in place. so when you have -- if you look at bank holding companies that were originating subprime loans, they were not being originated in the depository institution. prime example might be countrywide, the largest originator of subprime loans had the national bank and later thrift, the loans were being originated in a nonbank, state regulated affiliated holding company level. now, i'm not criticizing my good friends in the state banking system because these were not banks. they were being state regulated. they were, at the time, there was very little authority of the state banking regulators to regulate these activities. now there is a lot of authority, and we'll see improvements. but at the time loans were being originated, it was being originated in state institutions that had very little regulatory authority. now, why is it important to have preemption? we've heard of the controller state national standards, they're more effective, less costly, they're beneficial. but there's also an impor

we received a letter from a incoming head of the fdic and other questions have been raised. two questions, as quickly as i can. why did you not come to congress to seek authority to create that facility? >> this is a repurchase agreement, which is a standard tool that we use in open market operations. it's long been -- >> true, but this is a dramatic expansio expansions. which is why you're doing it on a test basis. this is a new facility for you. so, i guess the answer is, you didn't think you needed author to go to to congress? >> we do have authority under the federal reserve act to purchase and sell securities, and i believe it falls under standing authority that the federal reserve has. and we will use this facility only for the purpose of -- >> fair enough, and do you think that this facility needs to be limited in its size and application? >> we have discussed this, and if it can be expanded and contracted. and we absolutely intend to make sure we address the risks. >> now, mr. horseford. >> thank you. thank you madam chair for being here today. it's been a very infor

now the fed and fdic must review these plans, and if they don't buy that the plan would actually resultn the rapid and orderly liquidation of the company, then they must order the company to submit a new plan, and here's the key part. as part of the order to submit a new plan, the fed and the fundamental can require the company to simplify its structure or sell off some of its assets. in other words, break up the bank so that it could be more easily liquidated and not pose a risk to the economy. so let's consider what happened during the lehman brothers bankruptcy in 2008. that's the one that sparked the financial crisis, nearly melted down the economy, and triggered the bailout by the taxpayers. the court proceedings took three years, clearly not rapid or orderly. but lehman was tiny compared to today's biggest banks. when it failed, lehman had $639 billion in assets. today, jpmorgan has nearly $2.5 trillion in assets. that's four times as big as lehman was when it failed. lehman had 209

that's who the fdic represents. but most of the money is going to consumers. some of it is going to real estate construction. my suspicion most of the money going to consumers who are with citibank already, and it will be recognition of loans that they're not going to recover any how. they're going to do a reduction on a loan that we're not going to get back any how. to me it sounds bigger than it is. the civil money penalty is the big item. of course part of that is actually tax deductible. how much of that will they pay out in cash is an open question. probably closer to $2 billion in cash, but again it bothers me that most of this--there is more money going to the government than to investors or consumers, which are supposed to be the parties harmed here. >> put it in context for us. how significant of a chunk of change is this for citigroup itself? >> i think it actually is pretty significant. this morning citigroup reported earnings for the second quarter, and they fell off some--their profits fell 96% from second quarter last year. they only earned $131

appropriate for the securities trading operations in our country to enjoy the taxpayer support implicit in fdic insurance companies. so the first thing i do is pull the securities businesses out of the banking system. i would, in a sense, debank goldman sachs and morgan stanley. >> that notion becomes particularly interesting in an environment like this one where a bank like the embattled credit suisse is looking at selling off a substantial piece of its banking business. and citi just reported another down turn on monday are seeing flagging revenue amid higher capital requirements. citi, by the way, has been a major holding of citadel for some time. they're always in the market for compelling longer term investments. >> we don't try to profit from calling the direction of the markets. we try to profit from picking individual companies that are going to outperform expectations of success. so we're really in the single stock story. which companies are going to have winning products, winning value propositions, but are going to create wealth of their shareholders that the rest of the market is no

will give relief to homeowners and an additional $5 million to states attorneys generalses and the fdic. just behind bank of america and j.p. morgan chase. the $7 billion accounts for a full half of citigroup's total revenue for all of 2013. experts say the aim to send a signal to all banks is working. >> there is a queue forming at the door, the department of justice, wants thesis banks to -- wants these banks to settle and avoid uncertainty just about how high the penalties could be. >> this is the largest several penalty. >> the bank's activities shattered lives and livelihoods throughout the country and also around the world. >> last month the justice department got fed up when it couldn't reach a deal with citigroup. wall street journal reported the government was ready to take them to court7ác but only postpd the filing so they could announce an arrest in the benghazi city bombing. that gave them just enough time to come back to the table and agree to this $7 billion fine rather than face prosecution in the courts. >> some financial analysts are warning that today's settlement cou

. $500 million to the fdic and less than $300 million to five u.s. states. the settlement reportedly signed this weekend caps months of talks during which the u.s. demanded $12 billion and threatened to sue. this interview also reports second quarter results today at 8:00 a.m. eastern. the bank is forecast to earn $1.08 a share versus $1.25 a year ago. they are expected to make $8.5 million. investors are also going to be listing comments on other legal issues including the broad investigation in mexico and progress on citi submitting their plan to the fed. >>> and now we'll look at the german market session high er around 25%. the second earnings forecast beat them at 5.3 billion krono. plans for the main opposition party to raise bank taxes could weigh on growth. jan erik back is joining us. thank you for joining us. a solid set of figures and take us through the highlights of the quarter. >> yes, good morning, i'm glad to. we have been trying to grow our bases over the past two years by attracting clients and we are doing that in all segments of where we

we really can address the issues of complexity over at the fdic. >> senator to me. >> thank you madam chair for joining us yet again. i think you know from our priebus conversations, i have been long of the view that the risks association with this experiment and monetary policy outweigh the meager benefits. so i have disclosed that upfront. better a understand different aspect of this. that is a movement towards normalization, which arguably is underway now. necessarily depends on the projections that the fed makes. we have discussed some of those inflation projections. -- theseerns me is things are very hard to project. the fed doesn't have a great track record of projecting these things. i don't think they anticipated the extent to which a decline in the workforce participation would drive unemployment rates lower. i have a little graph here, which i know you can't see, but i will ask you be included in the record. it simply to pick the fed's rejection of gdp one year out, and then compares it to where it actually was. it has been pretty terribly wrong for 10 years. it seems as tho

it then submitted plans in 2013, and neither the fed nor the fdic said they were not credible. and it has submitted plans in 2014. so i'm not quite sure on whether you're saying the plans are not credible and you're continuing to talk with them and asking them to change their plans. is that the case? >> well, we're working to give these firms feedback on their second round of submissions. and i think what we need to do is to give them a road map for where we see obstacles to orderly resolution under the bankruptcy code and to give them an opportunity to address those obstacles. >> i appreciate that you're doing that, but the statute, it seems to me, is pretty clear here. that it's mandatory these plans be submitted each year and that each year you determine whether or not the plans are credible. and i guess the question i'm asking is, have they ever gotten to a plan that you can say with a straight face is credible? >> well, i've understood this to be a process. these are extremely complex documents for these firms to produce. our second round of submissions we're looking at pl

as part of the settlement, citigroup will pay out $500 million for the state attorney general and fdic to address investor claims and add 2.5 billion for consumer relief. that will includes principal reduction. the justice department made clear this is far from the past -- last major settlement they plan on reaching. >> eric holder has been under pressure to bring financial crisis cases. do these mollify critics at all? >> not entirely. are of the reason is they civil, not criminal penalties. that said, inside the justice department there is hope ease high dollar figures are having more and affect than people realize. something the attorney general hinted that today in washington. >> i would think shareholders would ask questions of the leadership of the banks, the leadership of the banks need to ask questions about themselves and the practices they engaged in. i would think there is a deterrent impact from the very historic settlements we have worked out. not ceos and handcuffs. justice department officials believe there is a real impact to the settlements. >> what about the banks? ho

. $4 billion to the department of justice, less than to the fdic. >> this all goes back.isis,es back to morgan securities, bonding and not marketing them and actually lying. >> the volume of these sold ores that citi repackage is lower than some of their competitors. the reason why the justice department is going against them harshly it's because they had e-mails and things that wascated they knew it crummy, lousy packages. and yet today sold them. all of the slicing and dicing. >> and bank of america, as you be next.ld potentially the numbers in the story is adding up to $17 billion. it shows the quantum of what we are dealing with. these are huge fines. >> a massive fines. going back will we talked about bnp paribas what outrages and perhaps the u.s. is cracking down on a french bank. it is the department of justice that feel like they have to go after these banks. they really never had any before and now they are more intense and forceful and coming up with bigger numbers. $12 billion, $70 billion additionally for bank of america. -- 17 billion dollars additionally for

it is possible that in the future the fdic might have deposit insurance for those who hold bitcoins, would drive the cost up again. the real question is, if the cost of a bitcoin transfer can stay below two percent, then yes it is going to be very competitive and could provide a problem for visa, and in particular for transfer services. you know, for remittances. that is possibly a long-term problem. one of the things i'm sure is about that i would like to hear from tony is -- how high do we think ultimately transfer fees will go for bitcoin transfers? >> that is a great question. if the benchmark for you think is successful is two percent, i don't think we'll have a lot of problem. right now, the average industry is one percent and the transaction costs are going down from your because every company is able to add scale and enhanced features. when you look at a service like ours or others, the marginal cost, it is related to our overhead, salaries, servers. it is the distributive network that really helps to reduce the costs. you don't have to have a central data center like visa or

former fdic chair says you'll actually be better for it. bank on it. really? that's a little tough love. >> well, i think they should at least be thinking about it. all of the profits don't have to go into capital distributions, and there's some long-term benefit. it's been shown with a lot of different companies, historically and currently, if you pay your employees better, they'll be more loyal, they'll produce more, less absenteeism, and less turnover, it provides economic benefits. neil: i think you said in writing and elsewhere that we have the sledgehammer approach to it. the gap paying higher minimum wage isn't the same as anthony pizza parlor. >> that's right. neil: should we differentiate? for a lot of the guys hurting, they can't do it? >> as i said in the column, better if they took the lead on this. neil: you made a point of saying walmart should do it. >> yeah, a lot of good analysis showing that walmart could very easily and still pay their shareholders very good dividends, could significantly raise their wages. neil: they thought they would do t

. >> citi group will pay a record $4 billion penalty and $5 million to the state and fdic. billion will go to consumer relief. cbs business analyst says from the consumer's perspective that is too litling too late. >> so many people have last their homes already or had to make terrible decision about invading their retirement accounts to pay their bills. i think this is a little bit of a drop in the bucket and it certainly well later than most people needed help. >> he says the settlement amounts to about a year of earnings for a bank the size of citi group. >> just because you are driving at 100 miles an hour. the fact that you're art 75 now doesn't mean that you're safe. >> holder says despite the settlement, city group officials could still be hit with criminal charges. duncan, cbs news new york. >> home owners can city group mortgages could have their amount cut from their loan. others could have their interest rate reduced. >>> turns out the metal in your electronic device could make you itch. >>> medical journals report some people suffer allergic reactions to nickel.

big trouble and bank united here in the united states with fdic assistance. both of those investments return at least double your money, triple? what was it? >> well, northern rock is now part of virgin money it isn't public. it's doing very, very well. it made earnings in the very first year that we had it, which was pretty unusual. >> do you have to do anything or just buy it? >> well, there's a whole new management. >> right. so you got management and you delegate them to make sure you turn this thing around, basically? >> well, and also it was putting the virgin brand. virgin is a very, very powerful brand, especially in the uk. and between that and j.n. grardia who is the person running the bank they've done a good job. >> made him an equity guy too, right? >> john made quite a bit of money. >> and you did, too. >> yes. >> and all your partners did. >> indeed. >> what did you have to do there? >> well, first of all, you had to have the courage to buy it. >> right. >> that was when everybody thought florida was going to be the lost continent of "atlantis"

both of these are insured by fdic up to the legal limit of $250,000, but both of them may carry penaltyyou want your money before the end of the term and they may limit number of transactions within a stated time period to help you figure out where you can stash that cash i know ukee like his math the trust, we have a great web resource called deposit accounts.com. >> that do i, safe travels, jill, cheers talk to you soon. >>> well, worth toys day is a big day for fans of 50 shades of gray, we will break it down on the other side. >> plus coming up in the healthwatch when itchy skin could d be a warning sign of cancer. >>> and a story that will tug at your heart strings a sick little boy's wish to receive tons of cards for his birthday and these campers are making his dream come true. you can help as well, we will tell you more when we come right back. oh hey there! (laughs) hmm. you're that grumpy cat. well i know! how about some honey nut cheerios? humans love them. moms, dads, kids_well, all of 'em. not even a smile? huh... maybe someone should tell your face. ohhh that is your face.

, other fdic, other public sector and private sector institutions. each of your written statements will be made a part of the record after your oral remarks. for those who have not testifies there, and i'm somewhat uncertain whether chairman frank has ever testified from theitable, but i know he knows the system. the green, yellow, red lighting system. green means go, yellow means wrap it up, red means stop. and we have not improved the audio system since chairman frank's day so you'll need to take the microphone and bring it very, very close to your mouth so that all can hear you. mr. wilson, you are now recognized for a summary of your testimony. >> thank you, chairman hensarling -- >> regrettably, that is not close enough. pull it a little close eplease. >> my name is dale wilson. i'm the ceo of first state bank of san diego, a rural community bank serving a small south texas town. i appreciate the opportunity to be here to present the views of the texas bankers association on the impact of dodd/frank act. let me start by thanking my own congressm

they didn't have the fed or the fdic, but they did have about six banks that were well diversified across the country. as of again many of these intervention tried to substitute for the lack of geographic diversification and the lack of product diversification in the system so the plant would be i don't know i think the bank of america is at 49 states now that he sensually we havhe's in chilr of large banks and regional banks that are generally well diversified geographically. it's interesting enough if you look for instance at yes there are too big to fail issues with the big banks they are also. so i would argue to some extent the lack of access to the capital markets and the lack of the geographic diversification is the problem that we solved. of course we have other problems with this, too but those can be addressed and it's important to keep in mind is often presented if we get rid of fannie and freddie we have no backstop. we certainly need to remember the federal reserve purchased a trillion dollars in the mortgage-backed securities. the european central bank purchased 700 billion

a flar florida-chartered bank division and monitored by t fdic. no connection to the parent company, but we wanted people to know more about the relationship, the connection to the united states. here you can see what's happened to the portuguese ten-year yield over the last week or so. showing a big rise. suggesting concerns about the overall portuguese economy and whether or not the government will be able to pay back debt. show awe longer term chart, though. you would see in fact their yields of still remarkably low compared to the worst moments, were ut you can see to the right still of this chart, there's been a sharp rise here as well. a lot of the other banks in portugal selling off and seeing spreads to the other european countries as well. the key question we're asking -- is this just can a banco espirito problem or seen issues of bank and debt repayment? >> questions we've asked for many months, really. gosh, feels for many years. michelle caruso-cabrera with the latest. >>> back to competition. joe may be in the number one position now,

the justice fine to department, payouts to different state attorneys general plus the fbi -- fdic and the consumer interestingwhich is compared to jpmorgan. it's the actual number being paid to the justice department, a cache find that cannot be written off for tax purposes. it cannot be credited by other mortgage actions. this $4 billion in civil penalties is double what jpmorgan ended up having to pay to the justice department. what this underscores is that while they are using the same came toey used, when it citigroup, the justice department officials thought they held the higher ground and they pushed to increase that fine. >> who is next? >> right now, it looks like it will be bank of america. they are next in line and everybody knows it. negotiations between the bank and the justice department over these crisis error loans are not in a good place for the justice department is pushing hard not unlike what you saw with citigroup to increase the fines and increase the number. i think bank of america has been resisting to that to push back. when it comes to the justice department,

billion to the justice department, $3 million to the state attorney general, 2 million to the ft idc -- fdic. >> we're thrilled to have scarlet fu with us. a.m.? going to do at 8:00 >> i will be on the radio. >> the second story, "the wall ," they call it an arc of instability unseen since the 1970's. uncertainty in gaza and israel, ukraine and also iraq. about 17,000 residents of gaza you in shelters after israel warned it was going to attack. >> the back story is, ukraine overnight, some real instability there as ukrainian forces go into the hot scoop -- luhansk. report of one dead civilian in russia. a lot of unconfirmed, so we have to be careful. , afghanistan.ion people are still dying in afghanistan and syria. this arc instability you talk about, it is amazing when you think about how many countries are involved and how many hundreds and thousands of people are at risk. >> i will have that in my morning must-read. >> and also launching attacks nearby bad. >> a touch of sea salt. >> you are referring to m&a monday. chocolate maker -- adam johnson has one of these every morning. >> i'm t