sadly dodd-frank gets this wrong as well. dodd-frank actually increases barriers to entry in such as those found in section 936. so i give dodd-frank a very small amount of credit for recognizing the problem with the rating agencies but unfortunately they completely missed the ball on it and fell far short of where they needed to go. an area however, that dodd-frank gets completely wrong in my opinion is the role of consumer protection and the crisis in the subsequent creation of the consumer financial protection bureau. so while of course there was fraud, i don't think anybody would deny that. of course, there was abuse. i think it's more likely the case that acid bubbles generate fraud and abuse more than the other way around. i think it's also important to think about it in this way, asset bubbles come from credit being too cheap not too expensive. so let me maybe walk you through quickly what an example would be. if you assume a fixed monthly payment or expand a monthly payment when you bid for a house, the problem is borr

the dodd-frank act. which was one of the most restrictive regulatory laws since the new deal. they were attacking the stocks rather than the disease. if you have any interest in really understanding why we had a financial crisis it is in my book, which is called hidden in plain sight, published in january by encounter books. the result of all this unnecessary regulation is an historically slow recovery from the recession that followed the financial crisis, and we can see the slow recovery here you can see the red line which is the recovery from the 2009 recession that followed the financial crisis is a real outlier in terms of the other recoveries in financial crisis we've had before now why would this be? slow recoveries generally follow a financial crisis recent academic work has disproved this. two respected academics looked at all 27 recessions the u.s. has encountered since the 1800 and found that those that followed financial crisis recovered faster than those originated for other causes there were

and sadly dodd frank gets this wrong as well. whereas we should have ended the current nrs system that creates barriers to entry and limits competition. dodd frank actually increases barriers to entry in the rating agency such as those found in section 936. so let me say i give dodd frank a small, very small, amount of credit for recognizing the problem with the rating agencies. but unfortunately they completely missed the ball and fell far short of where they needed to go. an area however that dodd frank gets completely wrong in my opinion is the role of consumer protection in the crisis and subsequent creation of consumer financial protection bureau. so while of course there was fraud, i don't think anybody would deny that. of course there was abuse. i think it's more likely the case that acid bubbles generate from abuse more than the other way around. i think it's also important to think about it in this way acid bubbles historically come from credit being too cheap, not too expensive. and essentially the fundamental argument b

but we have a grand daddy of them all, the dodd-frank at you the dodd-frank asked is responsible for the slow recovery of the two got session just as. go to a heat is it is likely they will strangle it on the gross in the years to come. unfortunately dodd-frank has come an icon for progressives led by the business. they will not agree to changes, even small ones. most lawmakers have heard enough from constituents to know the act has been distraught they been impeded economic growth. democrats are variable but then to support any changes for fear of rising the progressive base. in today's conference my colleagues and i hear on the platform will discuss the most problematic provisions of the dodd-frank act. not all, but the most problematic was. the title i authority of the financial stability oversight council which i will call at sonic and the ability to designate important financial institutions which most of you. the vocal will entitle six derivatives and title vii in title viii come enforcement powers and title nine and qualified residential mortgage, rating agencies and consumer f

the dodd frank act was named after its authors, and senator chris dodd and barney frank. it was a massive bill that required federal agencies to write hundreds of new rules. here are some of the things that the dodd frank act did. it was signed into law by president obama on july joint first, 2010. it created the consumer financial protection bureau. it attempted to an too big to fail bailouts of financial firms. in eliminated loopholes of financial products, providing shareholders a say on executive compensation, and enforce regulations on the books. here are some polls that show just exactly the scope of this bill. a summary of the bill by a law firm shows that the bill was 22,290 six pages long. it has had 119 congressional hearings, and there have been 139 bills issued in congress to amend or repeal the act. the stats also give you a sense of exactly how much regulatory muscle has been used to implement this bill. it shows that the pages published over time actually total the same amount as 34 copies of moby dick. clearly this bill is one that has resulted in many new

and dodd-frank is the last example. jw, further comments? >> sure, i just want to touch on another issue that i see in dodd-frank perpetuated -- perpetuating a problem that long proceeds dodd-frank the inclusion of immaterial disclosures. conflict minerals or minerals developed in the congo. they finance the bad guys. they finance the good guys and they finance people completely uninvolveded in the war. but they decided that we should stop purchases of conflict minerals in the west, and so there's a mandatory requirement for disclosure of conflict minerals for firms not only firms getting the actual hard commodities there, but also for firms well down the supply chain, who have no idea where the aluminum in the electronic parts came from. so i think it's telling when a liberal law ultimately convinces the "washington post" editorial board that it was a bad idea, which they have come out against conflict minerals. it's time to revisit the motion all together of including immaterial disclosures in security laws. both by legislative fiat and by

that's what dodd-frank was. my friends on the republican side who have these incredible statements like the financial crisis was caused by washington's dumb regulations, failed to see that dodd-frank was actually a proportionate and targeted response to a devastating financial crisis that had real impact on an awful lot of families. i'm sorry about that. dodd-frank is not perfect. there are clearly issues around some things like fannie may and freddie mac. today, the vast mortgages are backstopped by the federal government because we didn't reform on freddie mae and fannie mack. and the republicans have been controlling this chamber. we should take that up. i'm very proud to be along with congressman delaney and congressman carney, sponsor of legislation that would do just that. there is still difficulty for americans who should probably qualify for getting that mortgage in getting that mortgage. they swung the pendulum a little far. at the core of the crisis in 2008 where mortgages that a lot of people shouldn't

dodd-frank is strangling the economy. and job growth by creating a compliance nightmare of over 400 now rules and regulations. i'm not anti-regulation. but the pendulum has swung too far. unfortunately, dodd-frank goes too far, fixing problems that don't exist and ignoring the root cause of the financial crisis which was the government requirement for easy credit for those who were a credit risk. we've all been told that dodd-frank ends too big to fail. this act did not end too big to fail. it glorified it into law and made middle income paychecks almost $12,000 less compared to the average post-war economic recovery. five years later our economy continues to sputter at a 2% growth rate while washington bureaucrats continue to burden american businesses. those small enterprises with never-ending regulations. dodd-frank is detering the entrepreneurship that's made this country great. dodd-frank is too big. it has failed the american people. thank you mr. speaker, and i yield back. pll hensarling: -- mr. hensarling: i thank

it seems to me that through dodd-frank that it is a matter of shoot, then aim. w we are tried to be reactive, but our people are feeling the pain of bad policy that has come out of dodd-frank. what are you going to be doing at the fed to alleviate this? are verylen: we focused on community banks. tipton: that is what they are worried about by the way. janet yellen: we formed a council that reaches community bankers and they come to see us twice a year. the entire board meets with them. the 12 federal onerve district versions of a regional scale of a counsel to advise these reserve banks on the factors affecting community banks. so we are listening. we are taking seriously the complaints that we hear and the specifics about our supervision and trying to be responsive. rep. tipton: i appreciate that. if i can put a little! on this. , i sat down with the community banks, they feel as if longer working with a banker but a federal government just to be able to comply with regulations that are currently in place. , theywe may have hearings do not feel that anyone is ac

so section 939 of dodd-frank gives a nod to this problem. it says you should remove statutory references to the rating agencies. unfortunately, that removal ended there. dodd-frank required, of course regulators to do a study. i forget the number of studies as many of you know, it'll almost 400 required rulemakings and almost a hundred studies. but that aside, what is required from the regulators and the rating agencies -- agencies is do studies about reliance on ratings. there's no requirement for the regulators to reach a certain conclusion, for the regulators to reduce that reliance and sadly, the regulators have largely chosen to continue that reliance and increase it in many instances. that would be not a big deal if most of the reliance on our laws came from statutory rather than regulation but that's not the case. the vast majority of reliance on rating agencies comes from the decisions of regulators, and dodd-frank doesn't change that. so to me, where we have a fig leaf where we needed a forest. we needed serious reform of the rating

dodd-frank is not directed at people. it's an outline directed at bureaucrats and instructs them to make still more regulations and to great more bureaucracies. two of the mower worrisome government entities are the aforementioned cfpb at the financial stability oversight council known as efsa. of operate largely out of public view and both are subject to virtually no checks and balances. old have been granted sweeping unilateral power to fundamentally control huge swaths of the u.s. economy. argue believe it is the cfpb that is the single most powerful and least accountable to agency in our entire nation's history. the cfpb, or more specifically it's one elected director, has almost absolute discretionary power to find any consumer product unfair or abusive and thus functionally outlaw it. when it comes to credit cards auto loans, mortgages of hard-working taxpayers, the cfpb not only is the unbridled power to make them less available and more expensive, but has the power to absolutely take them away. let's look at fsoc.

host: that was hillary clinton talking about the need to go beyond dodd frank. we are speaking with julia gordon and norbert. do you think we need to go beyond dodd-frank? guest: first i want to say hillary is absolutely right about what she says. there is still lots of work remaining to be done to make the system safer. i want to focus on one particular part of that clip, which is the travesty of justice that nobody went to jail. we didn't go up against the executives who we know knew what they were doing. they have built a system where it can be very, very hard to go after them. i know that there was certainly a lot of effort to go after them. but we have to make sure that in our system we have laws and rules of the road that are able not only to hold larger institutions accountable but that can hold individuals accountable for bad decisions. i would say one unfinished piece of business has to do with executive compensation. we just keep paying these people to rip us off. and that is something, even when you can't put somebody in jail, you should at least be ab

do you think dodd/frank has lifted the economy? >> i think dodd/frank has led to a stronger and more resilient financial system, and the years you showed on your previous graph that were negative and year over year negatives that was what we suffered in the financial crisis. a huge loss in output and in jobs. and to have a stronger, more resilient financial system means the odds of -- >> i yield back. >> time has expired. the chair recognizes the gentleman from washington. >> thank you chairman and madam chair, thank you for being here. there's an accumulating amount of research and scholarship tracking the declunine of entrepreneurship. fewer businesses are being started and few are surviving past the first year. as we all know there's a declining number of community banks in this country. so my question to you is, what's can you do, and what can we do to help community banks serve their local economies? >> well, community banks are really vital to local economies. i've seen this first hand when i was in san francisco and president

has dodd-frank made the system more unstable? rep. frank: of course not. does anyone want to go back to the fall of 2008? senator dodd: to stabilize financial institutions -- look what is happening in europe. taxpayers and citizens being pitted against each other. we have not exculpated lending expectations -- institutions. we now prohibit -- it is banned under the legislation to go back and ask the american taxpayer to do what we did in the fall of 2008. leverage is in so much better shape. stabilizing institutions. they have already dealt with a number of institutions pitting mutual funds and so forth, dealing with non-bank financial institutions. looking over the horizon to make sure they are not product lines are institutions that could cause difficulty. we now have the ability to spot crises early enough to coordinate -- two conduct quarter nation that did not exist in the past. we think it is going to work and we gave the responsibility to the fdic that has the history and record of how to do that. all of those major issues, it did not exist, today cl

ladies and gentlemen dodd-frank is the epitome of washington greed. it has made us less financially stable in many ways. since the passage of dodd frank the big banks are bigger and the small banks are fewer, and because washington can control a handful of firms much easier than many small zealous competitors this is likely an intended and not unintended consequence of the act. it codifies into law, too big to fail and taxpayer funded bailouts. the nonpartisan congressional budget office estimates it will cost taxpayers over $20 billion. dodd frank may not prove such a bad deal after all, it can shape regulations guaranteeing the taxpayer bailouts for themselves. it erodes market discipline and risks further bailouts to be paid mostly by lower and middle income taxpayer families. it becomes a self fulfilling prophecy helping to make firms bigger and riskier than they otherwise would be. let's look at two other prime examples of dodd-frank risks. first, the derivatives market. they were perceived to be at the heart of the crisis. they would mandate cert

dodd frank isn't perfect. it should have broken you into pieces. >> i hesitate to agree with elizabeth warren on anything. but i think there is a growing consensus that dodd frank didn't end too big to fail and too small to matter. >> critics point out five years later bank assets have grown 30% with the five largest financial institutions controlling 50% of the assets. barney frank is the co-author of the dodd frank act. the former democratic congressman if massachusetts is the author of frank, a life in politics from the great society to same-sex marriage. thanks for joining us today. >> welcome. >> so you tell me. is dodd frank working? do you think the average american is better off today? >> in that regard, absolutely. first of all, the single beggest cause of the terrible crisis we had was that mortgages were being granted to people who shouldn't have gotten the mortgages and couldn't repay them. this is bad for them, bad for everybody on the block, bad for the financial institutions and for the economy.

frank into law. is its job -- signing dodd frank into law. good morning. ♪ tom: good morning, everyone. to a single best chart. brendan: five years ago today, president obama signed dodd frank into law. that is five years of regulation and that's the story of our single best chart. this is the impact on how much tangible equity banks are holding. mark whitehouse can up with this chart. mark we are looking at this -- is this enough? mark: no, but i have to give tom mahoney credit for this chart. you can see capital has gone up about 20%. even if you double a small number, you still have a small number. we are at about 5%. what does that mean? it is as if you bought a house and put 5% down. the value of the house falls by 5% and you are out of equity. if that happens with the whole banking system, that's a problem for the economy and we have experienced that recently. brendan: i have seen evidence on the subject and they suggest equity would be as high as 25%. there's no political will to get near that, right? mark: yes, there isn't. is it regulatory capture are the regulators listening to

they're still feeling the impacts that are coming out of dodd frank. >> there are some things that dodd frank imposed on all firms, for example, the volka rule could envision their community banks being exempt from volka. we're trying to tailor our implication of volka to minimize the burden on community banks. thereabout there might -- >> we just introduced explanation for that. we've got to be able to get the economies moving in rural america and our minority communities. when we're looking at the 5.3% and talking about real unemployment level that 10.5%, it's part of the problem when you aren't raising interest rates right now is what you're really saying is our economy stinks right now. we are just not seeing real movement because -- what tools do you have left in the toolbox to be able to stimulate this? >> i would say we've gotten our economy -- our economy is in a much better state. low interest rates have facilitated it. and a decision on our part to raise rates won't -- the economy doesn't stink. we're close to where we want to be and we think the economy cannot only taolerate

do you think the dodd-frank has lifted the economy? >> i think the dodd-frank has led to a stronger and more resilient financial system. and this includes the year-over-year negatives, at a huge loss of output and in charge in this leads it for such a devastating facility to be medically reduced. >> paterno recognizes the gentleman from washington. >> thank you, mr. chairman. madam chair, thank you so much in this includes scholarship as well. kind of tracking the long-term decline of entrepreneurship and business formation, fewer businesses irvings darted and fewer are living past the first year and as we all know there is a declining number of community banks in this country and my question to you is what can you do and what can we do to help community banks serve the local economies. >> community banks are quite vital to local economies and i have seen this firsthand when i was in san francisco and president of the reserve bank they are. and it is something that we are focused on that the federal reserve wants to see community banks,

i am pleased you are hear as we commemorate the five-year anniversary of the enactment of the dodd frank wall street reform act. dodd frank was signed in the long just as we emerged from the worst economic collapse in a generation no one was destroyed nearly 16 trillion in household wealth and 9 million jobs: displaced 11 million americans from there homes and double the unemployment rate. we have seen improvement. significant progress has been made directing practices. delivered victimized consumers with greater transparency. putput in place clear rules of the road's. that stability along with the help of extraordinary monitor policy accommodation has led to growth including the creation of nearly 13 million private sector jobs, unemployment falling to its lowest rate since september 2008 recovery house market, housing market with significant increases in 401(k) balances and the s&p 500. these improvements, a picture of an economy that has recovered. the gap between communities of color and women versus the white male counterparts remains dramatic. aa lackluster 1st quarter and strong d

does dodd frank go too far. >> lending has still not recovered from the financial crisis. nding is still down, housing starts still haven't fully recovered. and part of that is the regulatory apparatus. >> dodd frank has spent thousands of pages of regulations. italians and new compliance officers inside the banks. and the regular utory burdens that undermines lending and economic growth. all that costs for a safer system which surely runs into the tens of billions of dollars, is weighed against the cost of the financial crisis itself. which ran into the tens of trillions of dollars. for nightly business report i'm steve liesman. >>> shares of starbucks pop on a strong quarter, that's where we begin tonight's market focus. the coffee reporting beat on the top and bottom lines topping it off, the firm announcing it will buy back 50 million shares as part of its buy back program. before the close the stock was off a fraction to 5656. investors are also cheering at&t's late report. result's top analyst estimates as the wireless carrier added customers. shares topped initially

cfpb, fsoc, the theme of dodd-frank is let's expand bank-like regulation to everybody else. so again, think about it that way. the notion of dodd-frank is that if only aig had been as regulated as well as citibank was regulated everything would have been fine. [laughter] [applause] >> thank you, mark. i'm going to let each of the panelists in order add something if he likes or take up something somebody else said or reiterate a point. maybe about two minutes each or so. peter? >> yeah, thanks. there were a couple of things that occurred to me that we might add a little bit. first of all, i've heard a lot about the costs of swaps and you didn't cover that as much as we might have covered it. but that and also the question of hedging under the volcker rule. that's also a problem where you talked about market making. market making is a problem. you can't distinguish market making from prop trailing very well but it's also -- trading very well, but it's also a problem with hedging. a lot of activity that banks engage in is hedging activity, hedging their risks. that also looks a

however, congress did amend section 13-3 in dodd-frank. it allows the federal reserve to extend emergency credit to the financial system, only through facilities that have broad-based answer is no,he we could not use those powers to address the needs of a single firm like the aig situation. >> several other firms, if an aig bailout was made available to a specific firm, as long as it was made to multiple forms, there is still nothing preventing the fed from injuring counterparties and creditors yet a hundred tenths on the dollar, is that correct? 13-3 was amended to state specifically -- >> i'm familiar with the statute, i'm try to figure if constrains creditors from getting 100 cents on the dollar. janet yellen: we have feeling financial firms that would not be able to put in place of broad-based facility that was intended -- ask you this question, there is obviously a difference of opinion. gave aeral reserve bank speech dealing with 13-3 and moral hazard. isder of last resort important but so is moral hazard in creating greater systemic

dodd frank confers sweeping new power. completely separate and apart from its traditional monetary pull. the fed continues to shield them through monetary independence. the fed has employed historically unprecedented methods, to paying interest on excess reserves, to keeping interest rates near zero for almost 7 years. by doing so, the fed has certainly blurred the lines. the fed has recently crossed the line by willfully ignoring a lawful congress ap subpoena for documents. this is inexecutivible. it cannot be allowed to stand. the feds refuseal to cooperate threatens both its reputation and its credibility. the fed is not above the law. it's a very serious matter, and must be resolve edd. the share now yields to the ranking member for three minutes. >> welcome back. i'm pleased to hear this month we commemorate the dodd flank reform act. it was signed into law just as we had emerged from the worst economic collapse in a generation. one which destroyed nearly $16 trillion in household wealth and 9 million jobs. this place

mark: if not dodd-frank, then what? i am sure you are not of the opinion that there should not be some regulation, but in your best guess, what would that look like? >> a lot less. it requires the regulators to issue 400 rules. five years later, they have only issued 60% of those, only proposed another 20%. the law is so complex that the regulators after five years cannot propose the other 20% of the rules. we have to simplify the system. betty: you hit the nail on the head at the beginning. ifreally do not know dodd-frank has worked until we get into the same situation as 2007. -- weare many of these could argue until we are blue in the face about whether they are necessary or not, to rigorous or not. we will not know until we have to pull those triggers. >> that's right. is boeing too big to fail? they are.gue they are not in any financial difficulty, but the conditions could come about that we would not let such a large u.s. defense contractor fail. you don't know the circumstances. we can say the banking industry ha

do you think that dodd-frank has lifted the economy? >> i think that dodd-frank has led to a stronger and more resilient financial system. the years that you showed on your previous graph that were negative and year-over-year negatives that was what we suffered in the financial crisis, a huge loss in output and in jobs. and to have a stronger, more resilient financial system, means the odds of such a devastating -- episode is dramatically reduced. >> the chair recognizes the gentleman from washington, mr. heck. >> i'm scott wopner live from delivering alpha. we're going to continue to monitor the q&a portion of janet yellen's testimony on capitol hill. but for the moment i want to jump back to our headquarters where steve liesman is standing by with the highlights thus far. there have been many. >> what you just saw right there was the way that statistics can be used for political purposes, the democrats showing growth year over year. the republicans want to show it quarter to quarter. which is how it's more often used by the market. tha

dodd-frank, five years later, where are we? e big question is the financial safer in the dodd-frank have anything to do with it? yes it is safer than it was feeding into the financial crisis. you have to ask questions about how much dodd-frank has to do with it. back in 2006, the financial or had 127% of debt compared to gdp. in the financial sector was more than the overall national output down to 80% of gdp today. assign there is less leverage them less prone to shocks. most of that happening before dodd-frank was passed. wall street takes itself before dodd-frank pass. >> look at the way things are structuring today and it's so different than what we saw five years ago. this has just changed the course of financial institutions in the country. dagen: john, you can agree or disagree. we won't know until the law works or not until the next crisis. i look at restrictions on proprietary trading in the financial community complaining about the ability to make markets on fixed income, lack of liquidity. until you see selling in the

that is what we are trying to drive at in the first place with dodd frank was eliminate some of the systemic risk. >> i think you've put your finger on a very important phenomenon, and we were well aware when we put these regulations in place in dodd frank that wherever you draw the regulatory perimeter that there will be a tendency for activity to migrate beyond it to what we call the shadow banking system. so we clearly need to be very vigilant about monitoring risks that are migrating to that system. certainly in the federal reserve, we have hugely ramped up our attention to shadow banking system. the fsoc is focused on risks developing broadly through the financial system in shadow banking. and the financial stability board has a large work program devoted to shadow banking. we are thinking about regulations that might address, like minimum margin requirements that would apply not only to banking organizations but more broadly that might address some potential risks in the shadow banking system. of course we have seen some height en d heightened attention to risks by the fcc in money mar

several years ago with the highly partisan vote with very little republican support the 2300 page dodd-frank bill was passed. and since then there have been mounds and mounds of regulations and rules that are starting to smother a financial services industry. and one part of dodd-frank is a great concern of mine is the too big to fail regulation. now, when fsoc is trying to identify what banks, and not financial institutions and asset managers should be designated as too big to fail it means that the taxpayers if they fail to step in and bail them out. now, we all know that there's a huge difference, chair yellen between large -- all kinds of chemicals going to our economy and asset managers, mutual funds, pension fund managers that have the retirement savings for millions of americans. with no systemic risk to the economy. now, the former director of the nonpartisan congressional budget office calculates that if asset managers have to comply with these too big to fail regulations with no systemic risk posed to the market it will drive up the cost of their operations to the extent with a lon

and you know what dodd-frank has created? dodd-frank has created more megabanks. and it's pushing more and more smaller banks to sell out. since the end of the first quarter of 2010, oklahoma, my state, has seen 33 community banks disappear through acquisition or merger. 33 of those. 29 of those 33 community banks that disappeared were under $100 million in total assets. when asked the most frequent reason why they were selling, it was the increasing cost of compliance. they could not keep up because they had to have so many compliance people. in oklahoma, 24% of the state's commercial banks no longer offer real estate mortgage loans it to their customers because of the litigation and regulatory rirvegz they face under the null ability to repay and qualified mortgage rules. let me run that past you again because a lot of people don't realize what's happening. the smallest community banks are selling out. they're disappearing. at the same time 24% of the banks in my state now no longer offer home loans. that means in these small towns across america you can't walk

last week we started an series of hearings for the dodd frank anniversary. in historically unprecedented ways. the evidence continues to mount that since the passage of dodd frank our nation is less stable, prosperous, and free. we continue to be mired in lackluster halting economic growth. middle income paychecks are less than post war recovery, and has ms. waters told us a month ago is that millions continue to teeter on the brink of poverty and collapse. one way that our economy can be healthier is for our federal re reserve to be more predictable. like the great moderation of 1987 to 2003 the fed followed a more clearly communicated, understandable, and conventional rule. america prospered. today we're left with guidance that remains opaque and improve vagsimprove -- improveizational. they create a healthier economy for themselves and us all. one former fed president say it creates inefficiency in the capital mark the fmoc gives lip service to policy predictability but it's statements are vague. the fmoc preaches that they are data dependent, but will not

frank hasn't solved too big to fail. so hope springs eternal. but if democrats are going to decide that dodd-frank is a brand to be protected or a legacy to be secured, notwithstanding the unintended consequences fraught in a 2300 page bill that forces 400 rules to be promulgated, i don't think we've quite had two-thirds of the rules finalized as of yet, then, yes, we'll be somewhat at a loggerheads. having said that, i'm thoroughly convinced that left was working on obama care before obama was even born. so this may be a long labor, and i'm a patient man and even by washington standards relatively young. >> i think there was another question right next to him? did you have a question here? no. all right. right over here please. >> core mactoews. our future.org. and my question is, you mentioned that by being declared significantly important financial institutions you are codifying too big to fail. and if this is true then why is our -- is met life suing its designation as too big to fail? >> well you would have to ask met life. i suppose as an insurance company they don't want to have a ban

potential risk involved here, because that is what we are trying to drive at in the first place with dodd frank, to eliminate the systemic risk. chair yellen: i think you have put your finger on a very important phenomena in, -- phenomena and we were well aware when we put these regulations in dodd frank that were ever you draw the regulatory parameters, they will be a tendency for activity to migrate beyond it to what we call the shadow banking system, so we clearly need to be very vigilant about monitoring risks that are migrating to that system, and certainly, in the federal reserve, we have usually wrapped up our attention to shadow banking systems. fsoc is focused on shadow banking, and the financial stability board has a large program devoted to shadow banking. we are thinking about regulations like minimum margin requirements that would apply not only to banking organizations, but more broadly, that might address some potential risks in the shadow banking system. of course, we have seen some heightened attention to risks are the sec in money market funds, which was an important piece of

that is what we are trying to drive out in the first place with dodd frank to eliminate some of the systemic risk. >> i think you have put your finger on a very important phenomenon. we were well well aware when we put these regulations in place in dodd frank that wherever you draw the regulatory perimeter there will be a tendency for activity to migrate beyond it to what we say the shadow banking system. we clearly need to be very vigilant about monitoring risks that are migrating to that system and certainly in the federal reserve we have hugely ramped up our attention to shadow banking system. the ex-stock is focused on risks developing broadly through the financial system in shadow banking and the financial stability board has a large work program devoted to shadow banking. we are thinking about regulations we might address like minimum margin requirements that would apply not only to banking organizations but more broadly. that might address some potential risks in the shadow banking system. of course we have seen some heightened attention to risks but the fcc and money market funds whi

. >> new mortgage rules have been put in place since the government passed the dodd frank act nearly five years ago as a response to the financial crisis. the protections that grew from it proposed a vast array of new regulations on lenders and borrowers but are we better off and safer when it comes to mortgage lending? >> the effect of loose lending during the last housing boom was abundantly clear. nearly 7 million u.s. homes lost to foreclosure. the response a credit lock down caused by new lending rules under dodd frank. >> for lenders, this is all about paperwork, verification and doing a lot of the grunt work that was ignored or passed over before the crisis. >> the rules fill thousands of pages but are pretty simple. highly risky loan products were banned. borrowers now have to document their employment and at the time level. lenders must disclose all the costs involved in each loan and most importantly lenders must verify a borrowers ability to repay. >> if you're a high credit quality consumer dodd frank just made it a much bigger pain in the butt to let a loan. you have to

stephanie: dodd-frank is not going to get scrapped this point. d be done to make it more effective and impactful and non-hurtful? mark: dodd-frank it has three very good ideas. one is to create a financial early warning system so regulators can understand when there are risks accumulating in the system. the second is in the case of a crisis you want banks to be resilient enough to survive. if banks do get into trouble, what regulators to be able to resolve them with minimal collateral damage to the rest of the economy. dodd-frank has made progress in these areas. it's not done in any of them. banks still have a hard time providing regulators with timely information on their exposures. regulars have a hard time understanding data they are getting from banks. as we see from these charts capital charts are still low. you want to ask managing their assets to justify thin capital. you want them to have enough capital so that they can take the risks that make the economy dynamic. erik: mark, thank you. it's good having you here. he is a columnist at blo

this is the problem with dodd-frank. tor dodd and president had to go to floor to cobble votes together as he could. retailers saw that as opportunity to force the durbin amendment. i didn't like the durbin amendment. i still don't like it. i doesn't think savings are packed on to walmart customers. i think they are costing bank customers more money. i don't like that provision of dodd-frank but really did nothing for system stability and to taint the whole law because of that i think is not quite right. there are many good provisions of dodd-frank too. melissa: you're new book, bullies of wall street. financial crisis. aimed at younger audience. i will pick it up. i have a younger audience at home. thank you so much. >> you bet. melissa: ashley? ashley: ibm under our belt but only just getting started. huge week for earnings, getting underway with apple, microsoft, yahoo! and chipolte on tap. that is just tomorrow. melissa: wow. from bone dry to drenched. california hit hard with rainfall. causing even more damage. full

one day before the anniversary of the signing of the dodd-frank law. jack lew would be speaking shortly. to hear ahead of that from chris dodd, former senator of connecticut, and representative barney frank of massachusetts, former chair of the house financial services committee. the current chair is a jeb hensarling and didn't opt they did in the wall street to he writes that tuesday will mark five years since president obama sign at the dodd-frank law. the most sweeping rewrite of the countries financial loss since the new deal. mr. obama told the coach of the legislation would quote lift our economy. the statute itself declared that he would quote into the ghetto and promote financial stability. jeb hensarling writes not of that has come to pass. too big to fail institutions have not disappeared. big banks are bigger small banks are few. some of the right to the chin of the house financial services committee. we will hear from barney frank and chris dodd and a bit. while we wait a look at some of the activities today. the state department, u.s. and c

chris dodd of dodd-frank. good morning. ♪ tom: good morning everyone. he senator from connecticut, former senator chris. dodd. your comments linking mr. sanders to mr. trump, that is the third rail across the political landscape. what are we going to do to jumpstart labor america? >> this is a point i wanted to make. one more person adding another adjective contributes much to the debate. even though they are different approaches to solving problems that level of frustration -- you will not surprise me that the people showing up for bernie and donald trump are neighbors. they are feeling >> the same effect of what they believe is stagnation and their ability to retire with enough income to take care of themselves and their kids will move up. to educate their grandchildren. that is critically important. it is not just creating the jobs, that has been the good news. with unemployment around 5.3% what are those jobs? are we providing jobs in the areas where they have health care benefits and pensions? i represent the motion picture industry as the head of t

that is what we are trying to drive out in the first place with dodd frank to eliminate some of the systemic risk. >> i think you have put your finger on a very important phenomenon. we were well well aware when we put these regulations in place in dodd frank that wherever you draw the regulatory perimeter there will be a tendency for activity to migrate beyond it to what we say the shadow banking system. we clearly need to be very vigilant about monitoring risks that are migrating to that system and certainly in the federal reserve we have hugely ramped up our attention to shadow banking system. the ex-stock is focused on risks developing broadly through the financial system in shadow banking and the financial stability board has a large work program devoted to shadow banking. we are thinking about regulations we might address like minimum margin requirements that would apply not only to banking organizations but more broadly. that might address some potential risks in the shadow banking system. of course we have seen some heightened attention to risks but the fcc and money market funds whi

yet dodd-frank says that the trigger is $50 billion. so i guess my question to you is the chairman of the financial -- of fsoc, is the framework of basel in conflict with dodd frank? >> i don't think it's a question of conflict. i think the question is do banks of all size pose the same risk and require the same exact treatment, the answer is no. and we have been very careful in designing rules to try and distinguish different levels of treatment for different firms of different size. that doesn't mean we have it perfect. there certainly is an openness to looking at issues there. but i have to say that the debate recently has taken on a kind of odd character. there's been discussion of exempting banks of $500 billion or less. do you know how many banks there are between $500 billion and the biggest banks? there's six banks. the largest financial institutions in the country in the world. so we have to be careful not to ask questions as if a $2 billion bank is like a $50 billion bank or a $50 billion bank is like a $500 billion bank. i wou