so, if the fdic found the banks liquidation plans were not credible and the fed agreed with the fdic on the basic problems of each of these plans, why did fdiced refuse to join the and designate these plans as not credible? ms. yellen: looking back to the decision we made last year, we set back in the guidance and pertaining to these living wills that we expected to go through a few rounds of submissions to clarify. it's a completely new process and we felt the banks needed to understand what expectations were in terms of what we wanted to see and we felt we had not given sufficiently clear guidance to make the decision at that time. with the very closely fdic and we have given detailed guidance to these firms about what we want to see in this round of living wills. are spending a great deal of time. we have had seven full board meetings since august to discuss and work through these living wills, working closely with the fdic in evaluating them and we did make clear and it continues to be the case that if this round of living wills does not satisfactorily address the shortcomings we

so if the fdic found the plans were not credible and the fed agreed with the fdic on the basic problems with each of these plans, why did the fed refuse to join the fdic and designate these plans as fought credible? >> well, looking back to the decision we made last year, we had set out in the guidance pertaining to these living wills that we expected to go through a few rounds of submissions to clarify it, it's a completely new process. we felt the banks feed to understand what expectations were in terms of what we wanted to see and we felt that we had not given sufficiently clear guidance to make the decision at that time. we worked very closely with the fdic. as you noted, we have given detailed goinsz to these first about what we want to see in the round of living wills. >>> we are spending a great deal of time. we have had seven full board meetings. to discuss these living wills. we are working closely with the fdic in evaluating them. we did make clear the says if this round of living wills doesn't satisfactorily address the short comings we identified last year, we are prepared t

we have worked closely with the fdic. we have not made final determinations, so it's premature for me to give you a definite time, but we will make these determinations in the not too distant future. we are very actively engaged. and yes, we are smile committed, as i indicated to finding the plans that don't meet the specifications we outlined. we are certainly specifying what those deficiencies are. senator brown: does an aggressive living will process answer the question too big to fail? chair yellen: it certainly helps. we have also put in place re quirmentse for our tlac rules for adequate loss and sorp sensey and requiring that firms have workable plans how they would be resolved under bankruptcy. and dodd-frank -- so we want to make sure that there is a way they could be resolveable under bankruptcy and that the resources are there so that the taxpayer would not be at risk. and dodd-frank is a backup authority to title 2 which if it is necessary, an additional tool which we can use. i think it's premature to say we

if the fdic found the bank liquidation plans were not credible and the fed agreed with the fdic on theasic problems with each of these plans, why did the fed refused to join the fdic is and designate these plans as not credible? >> looking back to the decision we made last year, we set out in the guidance pertaining to these living wills that we expected to go through a few rounds of submissions to clarify it is a completely new process and we felt the banks needed to understand what expectations were in terms of what we wanted to see and we felt we had not given sufficient the clear guidance to make the decision at that time. we worked very closely with the fdic. as you noted we have given detailed guidance to these terms about what we want to see in this round of living wills. we are spending a great deal of time, we had seven board meetings so far since august to discuss and work through these living wills, we are working closely with the fdic, evaluating them and we make clear and it continues to be the case that if this round of living wills, it doesn't satisfactorily addressed th

who is the liberal to regret populace said we should have fdic insurance in taft said insurance krises moral hazard. those were the issues upon the table. so when the team than but italy passes to appease the community papers of the country because 85 percent will not go to the treasury. it is called the pores in spain to italy pays 2 percent with a cap of $500 this is back in the old days when they got interest for our money. these are not your customers and immediately it will become self sustaining with around 32 million in deposits. to say that system was extremely popular at was the immigrants. in and they recognize them from the countries they came from. and then they come with pamphlets. they fled the post office with all their money. even though they're on the 15 percent of the population. as the postal bank swelled with deposits and failing every year for three years. at the end of the great depression 1.2 billion dollars of deposits into this fund and this trend would have continued had they not chosen and fdic insurance. and was convinced it was a compromise but in the posta

you can do it through fdic or through the postal banks. we went through the fdic insurance route. for 30 years post office was the alternative of that and also was a central bank of sorts. poole the deposits and use them as liquidity is banks were facing a crunch. failed to notice. it becomes somethingit becomes something that only time magazine writes about. they get basically -- and i think that we should bring it back. for small savings, checking, money transfers, possibly small loans. this wouldthis would be filling that void that the payday lenders have filled in doing something that i did for a lot of our history and has been done in most every other country abroad. the people in the press call this revolutionary idea. it could not be further from revolutionary. we did this for a long time. the public forgot it seems like such a public intrusion. hell, this is big government. but it's not. we already have a already have a post office. is matted revenue stream. so again the government has created an fund and and maintained. they can also help start a small lending market. thi

it has given the fdic, for better or worse, powers. are you saying that in a crunch, the fed lawyers and treasury lawyers are so good they will find a way to evade the rules that congress set up? or are you suggesting that we will be once again in the middle of the night, chair of the fed, going to congress on bended knee, saying i need tarp 2.0? mr. kashkari: i know many of my fed colleagues has said this, the idea, we all hate forest fires so let's take that houses away from firefighters -- that is not the solution. the tools we used were crucial to stabilizing the economy. that is not the right solution. the right solution is to take action and make sure that the system is stronger, and to take bold action now in advance. when i ran for office, i used to joke that the first thing i would do as governor was banned traffic. it is easy to make a declaration, we ban this, there can be no bailouts. there can be no traffic. that is not how the world works. today, we need to be honest about what risks we face. mr. wessel: do we have anythi

and most importantly from the fdic which we should think about this from a bank aspect.he credit, sectoring the bonds in. this is going to be very important. making sure you choose the right sector of bonds and higher quality investment grade, as opposed to high yield at this point. that's probably the safer bet. >> jason, the problem with your argument, though, is that manufacturing is only a small part of this economy. and oil and gas jobs have been fall for the last year or two. the consumer has held up. we're at two-thirds economy. do you notes have-v as much faith as others who say growth is going to hold up? >> well, you're right, the u.s. manufactures about 13% of gdp. but it is the leading indicator of the entire economy. a lot has to do with access to capital. the investment in capx, so that's true. you see capx has been falling jobs have been cut. that's true. but there were hedges. with oil going forward, now you're going to see layoffs, bankruptcies, what happens to the financial sector that's overdisposed to this -- what happens when the first bankruptcy hap

it's all right here in the fdic supervisory insights. and it says that even though you're perfect -- you're a perfectly legal business, a perfectly legal business if we don't like you, we're going to crush you and there's nothing you can do about it because we're the federal government. mr. speaker, there is something we can do about it. we can pass h.r. 766 and the motion to recommit, all it says is that the justice department gets to decide whether the law is ever enacted. it's not worth the paper it's printed on. when is this body going to quit outsourcing its constitutional authority to unelected, unaccountable bureaucrats. it is an outrage, operation chokepoint is an outrage, it is an affront to the constitution, it is an affront to the rule of law, it is an affront to all of the hardworking mom and pop shops all across america, it strikes fear in the heart of americans, it is time to stand up for the constitution, it is time to stand up for the rule of law, it is time to stand up for those who do not have choice -- voice, for those

pay, there will be some sort of administrative regulation by the fcc or the federal reserve or the fdicbair did a wonderful job warning about pay. i think we will see more and more of that. that is the pressure. betty: should the bonus structure be taken away, for instance? >> look, i think the bonus structure, if it is one to remain, ought to be based on long-term company improvement, shareholder value, not personal, individual bonuses. when i was at treasury, as you know, what we did is we said, if you're going to pay a high-end corporate official, that high-end pay off to be tied directly to the overall financial performance of the ispany that she or he administering, and not personal benchmarks or objectives. it out to be paid out over 2, 3, 4, even five years. long-term, not short-term. and i think if you're going to have bonuses, that is the way it ought to work. betty: i've always think you're is a year your opinion, do you think the page structures of these wall street firms and also in europe, it is an incentive for people to do wrong. >> that's right. i still believe that. bet

we have worked closely with the fdic. we have not made final determinations.t is premature for me to give you a definite time. we will make these determinations in the not-too-distant future. we are very actively engaged and yes, we are still committed as i to finding that plans that don't meet the specifications we outlined, we are prepared to find them deficient and specify what those deficiencies are. does an aggressive living will process answer the question of too big to fail? >> it certainly helps. we have also put in place requirements for adequate plac rules for adequate loss observance a. requiring thaty firms have workable plans for how they would be resolved under bankruptcy. sure that there is a way they could be resolvable under bankruptcy and that the resources are there so that the taxpayer would not be at risk. authority is a backup , title ii, if it's necessary, it would be an additional we can use. i think it's premature to say that we have solvedtoo big to fail but we have made towardtial strides dealing with it and addressing it. >> thank y

it has given the fdic, for better or worse powers and the fdic developing powers. are you saying in a crunch the lawyers and treasury lawyers are so good they will find a way to evade the rules that congress set up, which is responsibility, or are you suggesting we will be once again in the middle of the night the chair of the fed, whoever it is going to congress on ben did me for a t.a.r.p. to point out. >> it will depend on the situation. i know many of my colleagues have said this. the idea we all hate horse isolate it causes away from the fire fighters. the tools we utilize and ultimately with a t.a.r.p. authority were crucial to stabilizing the u.s. economy. that is not the right solution. the right solution is to take action and make sure the system is stronger and to take what action now in advance. when i ran for office, i used to joke that the first thing as going to do is governor is dan traffic. it's easy to make a declaration that we banned this. there can be no bailout. it's actually how the world works? the reality is we live in today, we need to be h

we were close with the fdic. we have not made final determination, so it's premature for me to give you a definite time, but we will make these determinations in the not-too-distant future. we very actively engaged, and yes, we are still committed as i indicated to finding the plans that don't meet the specifications we outlined. we are certainly prepared to find them sufficient and to specify what those deficiencies are. >> one more quick question. and aggressive, thorough living will process answer the question of too big to fail? >> it certainly helps. we have also put in place requirements for adequate or so-called tlac rules, for adequate lost absorbency. we certainly are requiring that firms have a workable plans for how they would be resolved under bankruptcy. and dodd-frank. so we want to make sure that there is the way that they could be resolvable under bankruptcy and that the resources are there so that attacks they would not be at risk. and dodd-frank is a backup authority title ii which would be, if

i happen to like what sheila bair, the former head of the fdic, proposed, which was, let's hold a portionf elected officials' salaries in escrow and only release them when you hit certain metrics. >> but you know what? that's a brilliant idea because it turns the whole idea of money being a motivator on its head. you're actually channeling it in a positive way. >> but can i say this? most people hear the term "public corruption," they still don't see how it impacts their lives directly. we haven't necessarily quantified in dollars and cents at the end of the year to say, "this is how much public corruption costs us." because if you can get people invested and say, "wow, this money could have gone to "x," "y," and "z." why is it like this?" you have to start a campaign where it matters so people can feel it. >> who should do that? >> i think we could have -- i mean, we can have this as a private foundation that can work with that. because what you're talking about, it could be something that the schools could do -- the university of pennsylvania, for example, when you're looking at the fel

according to the fdic research study published in 2014, it was stated that the african-american banks are very successful in serving the african-american population of low and moderate income. it was also stated in that same study that over 60% of the loans made to individuals in these census tracts were made by african-american institutions. approximate 30% was made by non-banks, and the balance made by the mainstream financial institutions. we have a place in this economy. we have a place to help grow our economy, grow our community, and provide jobs. we have learned how to effectively serve disadvantaged communities, build credit worthiness, and expand economic opportunities for small businesses and young professionals. we understand that we have to be engaged in providing greater social, political, and economic opportunities for the people we serve. that is why we have invested in educating our youth, expanding home-buying opportunities, and have fought for greater inclusion of black businesses in mainstream economy. we can only survive and thrive when the people we serve are maki

the well-off and the less well-off, there will be attacks on pay, some sort of regulation, or on the fdicdid a wonderful job. i think we will see more and more of that. that is the pressure. betty: should the bonus structure be taken away, for instance? ken: i think if the bonus structure remains, it should be based on shareholder value, not personal, individual bonuses. when i was at treasury, as you we thought if you were going to pay a high-end corporate individual that should the tied to the overall financial performance of the company she or he is administering and not personal benchmarks or objectives. and it ought to be paid out over 2, 3, 4, even five years -- long-term. not short-term. and i think if you are going to have bonuses that is the way it ought to work. --ty: do you think though and i have always been curious to the euro opinion -- but do you think the pay structures of wall street firms and also in europe, that is an incentive for people to go long? ken: i do believe that. argument that you see on the other side is -- if wrong is not illegal or involves risk-taking or

there will be administrative regulation by the sec or the federal reserve, or the fdic.id a wonderful job warning about pay. we will see more and more of that. that is the pressure. betty: should the bonus structure be taken away? >> i think the bonus structure, if it is going to remain, ought to be based on long-term company improvement, shareholder value, not personal, individual bonuses. betty: that was my interview with kenneth feinberg, the administrator of the volkswagen victims compensation fund, currently. much more ahead on bloomberg markets. the close of trade is moments away. the dow is headed to his best percentage gain this month. as well as closing weekly losses an in half. ♪ ♪ bloombergcome back to markets. we're coming back up to our highs of the session. mark closing in less than 10 minutes time. ramy inocencio has more at the markets desk. ramy: we are seeing the rally holding onto to the greens we had been talking about. right now, all stocks are higher, and 90% of s&p docs are higher. financials,g led by and is interesting with a day makes, because it

and with the liquidation of authority both reported dead constructive way the head of the fdic the ability to unwind in a way that could be done without breaking down. cell to make them more costly is the advantages to be bigger than what you see as companies talk about drinking. so she capital talks about investing today there was the discussion that agee should prevent to avoid that extra capital and discussion and to simplify. of behalf of those living wills but the practical effect to show how they can be simplified and why is it a necessity? he did in the hands of regulators and are it intently focused on this problem this will move as soon the right direction. >> the pronouncements of ben bernanke in 2015 don't move the markets as they did. but give us a little prediction that the fed is looking at they say to them if you cannot be and want with allied governments to infusion end you will have to divest. and it did you think that lifting will will precipitate? does that happen? >> it does. but that alternative is the determination with the fed imposed a gag rule that says that only e

both the fdic and the fed. they have the authority to break them up on that basis.ost: denver, colorado. dean is next. caller: good morning. yes, i have a comment and a question. as long as i have watched the federal reserve q interest rates and keep them low, or beyond zero, it seems to me that they have only enabled banks to grow larger. between mergers and acquisitions. to do a lot of arbitrage investing. at the same time, at the consumer level, credit card rates are at 19%. student loan debt rates and interest rates have been climbing. as a small businessman, in 30 years, i have never been able to get a loan from a bank. money to be used in a certain way to stimulate the economy, if that is the true intent of qualitative using. and, issuing more funds for the bank. guest: that is a great question. it is complicated. let me try to piece couple of those things together. first of all, the federal reserve should not decide who does or does not get a loan. the problem of a small business getting a loan is that it is particularly acute in this economy. what you have s

we have worked closely with the pd fdic. it's premature for me to give you a definite time.but we will make these determinations in the not too distant future. we very actively engaging. and, yes, we are still committed as i indicated to finding the plans that don't meet the specifications we youtlined, we are certainly prepared to find them deficient and to speacifac what those deficiencies are. >> and is it anning a yes, sir sif thorough living will process answer the question of too big to tail? >> it certainly helps. he have also put this place requirements for adequate or so-called tlac rules for adequate loss aborbancy. and dodd-frank, so we want to make sure that there is a way that they could be resolvable under bankruptcy and that the resources are there so that the taxpayer would not be at risk. and dodd-frank provided as a backup authority title to which would be if it's necessary an additional tool that we can use. so i think it's premature to say we've solved too big to fail, but i do think we've made substantial strides toward dealing with it. >> thank you. >>

. >> it's taken half a decade for the regulators, you and the fdic and others, the second half a decade plus to do dodd frank rule making. can you guess what it could have taken if there was a cost benefit analysis like this? >> well, clearly, it would be much more burdensome and take much longer. there's no doubt about it. i can't give you a guess. attempting to kwaunquantify the benefits is very difficult. >> who would have wanted these regulations to take longer? >> we know that banging organizations are concerned with regulations and the burdens they impose. >> let me shift to another question. i want to talk about excess reserve. i'm concerned this is an attempt by those opposed to the unconventional steps to level the monetary policy tools. >> it's the most criminal tool to adjust interest rates and the stance of monetary policy. if we were denied the abilities to use that tool, first let me say it's because we had that tool that we are knowledge that we had that tool when the time came to raise interest rates was critical to the decisions we made throughout the financial crisis a

and the fdic have not addressed the issue at all. meanwhile, our local governments remain strapped for cash and cannot wait for a bureaucratic solution. our commonsense bill, h.r. 2209, fixes this arbitrary decision by federal regulators. the bill directs the fdic, the federal reserve system and the o.c.c. to classify investment-grade municipal securities as level 2-a high-quality liquid assets. put simply, our bill requires the federal government to recognize the obvious -- america's municipal bonds are some of the safest investments in the world, and we shouldn't have rules that give preferential treatment to corporate bonds or other countries' bonds over our own. i want to thank congresswoman maloney for working with me on this commonsense legislation. i urge all my colleagues to support this partisan bill, and i yield back the balance of my time to the chairman. the speaker pro tempore: the gentleman from indiana yields back. the gentleman from delaware is recognized. mr. carney: mr. speaker, i have no further requests for time s

neil: there are these fdic rules. >> that is what the government wants.rnment will make it for us. we will all be safe. neil: i appreciate that. the superhero stuff was one thing i never imagined. thank you very, very much. apple. you heard that tim cook is not really keen on sharing any of this. how you crack the code. the department of justice. accessing one device. that is what i said. surely, the guy down the street. just that one. can you just open this up? i want to see what's in it. it is one guy in a blue shirt that knows more than anyone combined. here you go. we are making this a bigger deal. what the white house is saying is essentially what i have been saying. it can be scary. it is a matter of getting that. what they are saying, kind of what i am saying is, just do it. shut up about all of this other stuff. if i can help you with this more, i will. we're the hottest young company around but if we want to keep the soda pop flowing we need fresh ideas! >>got it. we slow, we die. >>what about cashing out? no! i'm trying to build something here.

shumlin: that's exactly why i think hillary clinton will appoint an fdic -- in fda that's not in thet of big pharma but in the pocket of america. that's the way it should be. questioner: [inaudible] mr. shumlin: we can argue about that. all i can tell you is that in my view -- [applause] in my view, i would argue that the entire washington political establishment gives big pharma too much power. and that's why they spend $422,000 per congress person to lobby them. but i have to say, i'm proud of president obama. he's gone out and said, $10 million to fight this disease this week. he's just put his secretary in charge of bringing together rural communities to help solve rural problems. i think we're making some progress. what else is on your minds? yes? questioner: hello. my name's holly. i'm a person in long-term recovery. and i love the stuff you're doing in vermont. with the vermont recovery network. but i didn't hear in the five-point plan, what is hillary's plan or your plan to support the peer recovery support and protect the investment in treatment? mr. shumlin: that's a great

for instance, we changed the way the fdic collects insurance fees and shifted over a billion and a halfsmall banks. but the smaller banks under 10 billion are not examined by the consumer bureau. >> the point, congressman, i don't mean to interrupt, the point is that your moves, whatever the impact might be of this legislation now look centrist relly tif to what we're hearing, bernie sanders is saying the business model of wall street is fraud. he's talking about them effectively being fraud you lebt. >> madoff, that's a fraudulent business model. we should understand and i agree with mr. sanders specific objections to the practices but when he says the business model is fraud. he's not repudiating me and chris dodd but barack obama. barack obama's administration never operated under that premise. fortunately because what we have is a basically important need, financing businesses through the process of collecting money, et cetera and with a pattern of abuse s and lack of rules and that happened and we passed bills to change that. but i have to add this, senator sander was as member of

remember in 2009, the regulators here in the united states led by the treasury, but the fed insisted fdicthem insisted the u.s. banking system increase capital substantially, liquidity ratios were pushed up and a lot of bad debt was written off, sold off, et cetera. in the case of europe, it was only in october 2014 when ecb european central bank got control of the regulatory process that you got to get meaningful stress tests. so there was a big difference in timing there. and one of the reasons the u.s. is in much better shape u.s. banks better capitalize higher liquidity issues and done a awful lots of work on problem long book. all of that has come home to roost. >> sure. >> in europe at this particular point. some banks are under more stress than others. >> why is deutsche bank now the poster child when as was pointed out for a while it was banks in italy that had more nonperforming loans, germany has been one of the strongest economies throughout? >> john cryan did a lot of cleanup at ubs and inherited a difficult situation there. he said so right off the bat and restructuring plan

meaning they were going to go to work to try to stop the fed and weaken the fdic rules and do whatever they could do on behalf of wall street. so instead of conducting hearings to push for implementation of wall street reform, this committee instead is holding hearings on weakening the law for banks and nonbanks and how to make it impossible for regulators to finalize their rules. the banking committee has not in 13 months held a single hearing on strengthening consumer protections. we haven't talked about improving credit reporting and debt collection. we haven't examined how to curtail payday lending or make rental housing more accessible, affordable and safe. there's a lot of work to do to ensure we do not repeat the mistakes that led to the great recession. i sent a letter to the chair yellen this week urging the federal reserve to do more to reduce the risks posed by big banks' involvement in the commodities business. the fed and the fd irving c need to make public determinations if individual firms haven't provided credible living wills that demonstrate that they could go out of

like the fdic and s.e.c.inty that is there but they come back and they say, how do you stand on the constitution? you're going to pass a bill, show me where it is constitutional, where the federal government has the right to be into this or that activity. >> so we saw coming off that plane with donald trump, obviously, chris christie there who surprised so many people yesterday with his endorsement. if donald trump either runs super tuesday or comes close -- i'll hold that question. let's listen in now as he introduces donald trump. >> that he is going to work every minute he can to become the nominee for president. that will be a real switch for senator rubio since he doesn't work much at all. now, i'm not just making this stuff up. let me tell you exactly what marco rubio has done since he hack a united states senator. it seems to me when you're a senator and you're on some committees, you should actually show up for work. do you have to show up for work? well, let's see what marco rubio did. he says he has