in the aftermath of the financial crisis, congress enacted dodd/frank. it created an agency driven process similar to the ftic's existing bank resolution process. in addition, the dodd/frank act called for an examination of how to improve the bankruptcy code to better handle large financial institutions. as a result, experts from financial regulatory legal and academic communities including those on the panel, sought a solution to better equip our bankruptcy laws to resolve failing institutions. their goal was to encourage greater self-policing in order to reduce the likelihood of another financial crisis and eliminate the possibility of using taxpayer dollars to bail out failing institutions. these exhaustive efforts resulted in a proposal to create an entirely new chapter 14 within the bankruptcy code to enhance the prospects of an efficient resolution of a financial institution through bankruptcy process. over the past several congresses, the proposal has been incorporated into bills introduced in both the senate and the house. senators cornyn and toom

dodd-frank. so, dodd-frank, or frank dodd is a prefer to call it because frank wrote it, not dodd. gave more powers to the fed which is why i'm stand hog saying we need to strip the power from the federal reserve. because look what they've done with it. nothing. that's what my book shows you they're deliberately choosing to not do their job and we are paying a lot of taxpayer money to them. the second question. credit exams. another way of asking has anything changed since -- in the ensuing years. look, the fact that david soilman bach the ceo of goldman sack is all i need know and all the american people need to notice. remember david very well. david is in the book and i have plenty of notes and recordings to remind me of david. if i happen to forget him. and he was one of those managers that, you know, one more from goldman. double speaking, lying, misrepresenting, the book makes it clear, i had a bunch of attorneys read it. they disagreed as to how many lies in the book but everybody was, there's at least one. so i would say the fact that the fed have the power to stop that fro

i think the fed and dodd-frank has always had the authority to do the tethering. i don't think it required the economic growth act to actually say, it raises the threshold from 50 to 100 and then has another threshold between 100-250, precludes the fed from think we will do further tailoring. i think that's actually, that's something the fed should've done a long time ago is to taser more. i'm just not sure they could do. they were working so hard and getting the basics down that i think it's now the time to look at tailoring. even the economic growth act came out and set the threshold i think you look at it more holistically to say -- looking at risk factors as opposed to only size, assets size, is a good idea. i'm not sure i agree the five risk factors including size are necessarily the right ones or equally weighted the way they are in this proposal, because i, but i think it's the right with going about it. it's more sophisticated than just size threshold. >> i was just going to say it's the question always of where you draw lines. if you look at the banks in

as we all know dodd-frank was enacted in 2010 to end the too big to fail. dodd-frank and congress created too small to succeed financial institutions which punished our community banks and credit unions. in the end, the financial nstitutions were shut down while consumers were staved from the access to credit when they needed it the most. with the passage and enactment status e bill 2155, the quo has changed for good. dodd-frank was a win for north carolina, small businesses, innovators, the economy as a whole. under this bill, the consumer and small business will get access to the credit they need whether it be used to buy a home or expand their businesses. i think this bill is arguably the most important legislative win in this congress. it will benefit all sectors of the economy and i'm excited we got this done. outside of dodd-frank reform, i have enjoyed the work at terrorism and finance subcommittee. under the leadership of steve pearce, my bipartisan bill, the national strategy for combatting terrorists is just one example of this work. i was able to

adjust several aspects of the post financial crisis, financial regulatory framework created by dodd-frank. vice chairman quarles continues to play a vital role in the implementation of those regulatory changes, which is one of the many reasons i look forward to his remarks today. vice chairman quarles brings to the federal reserve board decades of experience as a banking lawyer in both the public and private sector. directly prior to his appointment to the board, he was the founding managing director of -- and before that a partner at the carlyle group in washington. he also spent several years at the treasury department, first as assistant secretary for the treasury for district versus assistant secretary secretary for trade for international affairs, and later as under secretary of the treasury for domestic finance. given the interconnectedness of the global financial system, his experience in both domestic and international affairs is surely invaluable to his work at the federal reserve today. i'll close with a little bit of information on today's program. we will begin of course with

. >> so to answer your questions so with dodd/frank or frank died because frank wrote that not dodd togive more powers to the fed and then to take the power away from the federal reserve. that is what it shows you. and then the credit so has anything changed? look. is all i need to know. and if i happen to forget him. and one more from goldman. and then they disagreed as to how many. so the fact that the fed has the power to stop that from happening tells you everything you need to know. . >> and lehman brothers and bear stearns? . >> that is of a request one - - a very good one. to make them the executive and i think that will begin to change and i think i know this is the last question but so to go back to your question and then to advocate for more supposition and i could not agree more. and interestingly enough and to have those powers that is right. but that is enough of monetary policy and then we can make it happen. [applause] . >> i'm sorry we are out of time. we can do more questions during the signing. thank you very much. we have your book behind the register please form a s

to answer the question if i remember them if frank dodd we need to strip the power away from the federalreserve. we are paying a lot of taxpayer money for that. second question, credit exams which is another way of asking has anything changed in the ensuing years. the fact that david solomon became the ceo of goldman sachs is all that by the end of the american people need to know. i have plenty of recordings to remind me if i had to forget. why is it misrepresented when the books make it clear they would disagree as to how many livelies are in the book but ths at least one. i would say the fact that they have the power to stop that from happening and they didn't stop it from happening tells you everything that you need to know about the credibility of those exams if you will. and the third question asked >> your question is a good one should we make it a law of the land clicks yes. make them especially executives putting their money first. i think that will begin to change the behavior. i know this is the last question. and i promise to somebody that i would comment on this so i will go

glass steagall that was sort of redone partly as as this thing called the volcker rule as part of dodd frank that changing the difference between commercial and investment banking explain where that is well where that is is that the regulators did approve a rule that became final in two thousand and sixteen you worked on that i voted on it you voted on it it's a very complicated rule public citizen and the progressive organizations did not like that rule in particular it was overly complex again this rule says that banks should not gamble especially with taxpayer backed f.d.i.c deposits they should be engaged in the difficult boring business of making loans. the the the liquidity. that was threatened hasn't really appeared and yet the banks want this relaxed and as we speak the five agencies including your former agency are busy at work relaxing that rule i hope it doesn't happen i want to ask you about the future what do you think might be the next big crisis difficult to say. if i knew i would make a beeline to the regulators and make sure there is they are aware you're different such a di

even like barney frank who was very left, dodd frank, at least he understood i think the whole bankingystem and financial services. you may not agree with his politics, but i think there's a lack of experience and education coming with some of these people coming into government, even though they are young and everything, they don't have mba's they haven't worked in banking, i don't know if they understand the industry -- david: it's about politics. not only will this give her exposure, but they may want some of that to bring exposure to a committee. this is also by the way a committee that's going to be looking into donald trump's finances, so they will want as much attention, the democrats are to this committee as possible. because she is a rising star, like her policies or not, she is a rising star, i think that's one reason they may want to put her on the committee. even though she's only 29. >> i think you are right. the first thing they will demand is president trump's tax returns or try and demand it. we will see how far that goes. the second thing both ocasio cortez and maxine

regional banks, which have benefited from some of the regulations that were strangling them from dodd-frankly meant for the big guys. both of them, both the big guys and the little, as you can see, bank of america, up 65% since election day. these are the big ones. we will cycle through the regionals who have also done very well. why not go all in for the republicans? >> because it's a cautious, moderate group of people. the democrats will say oh, that's because they don't like the president. most of these people secretly do like the president, liz. the whisper rate on wall street is higher than ever before. people know i have been an outspoken proponent for the president and so they will come over to me and say by the way, i tell people i don't like the president but i do like him. but this is what goes on on wall street. it's hedging. it's making a bet that you need a divided government to be successful, and you can go back three or four -- liz: more regulations could get handed down. >> one of the pieces of legislation that the president's not getting celebrated for or the republican con

came into being as dodd frank. they were not allow her to become director. obama was forced to select someone else. they tried some finagling to make it work. what some people say now is probably the worst thing that her political enemies could of done as we all know elizabeth warren became a senator. and still is one. that gets into the whole campaign to become senator when the incumbents got down and used the false claim during a debate. and accused her of getting jobs by falsely stating that she was native american. they have a major investigation where they interviewed every from every school that she applied to as a law professor about whether or not she had use the claim of native american descent. and everything said no she did not. it should put that to rest. will it, now because these are american politics. that is an easy target that of course the president has made all the more use all of his vitriol's on that one aspect calling her pocahontas she came in february of this year with the big speech about her ancestry and that's it she grew up hearin

so much so that even barney frank, whose name is part of the dodd-frank act, came to support the reforms for community banking. i'm very proud to have participated in regulatory relief that helped thousands of community financial institutions help lend to their communities. it's making a difference today as we watch the impact on our economy. and indeed it is in some measure fitting that the title began as the creating hope and opportunity for investors, consumers and entrepreneurs. because that is what is happening in this amazing economy. there's more that's going to be -- there's more good news that's happening in our economy, that's probably going to get covered. some of it is out there for the c-span viewer to find. you might not see in the news that we have the strongest sanctions that have been imposed on russia since it's been russia. post the soviet union. we've never what stronger posture toward russia than we do today. our committee, the financial services committee, helps implement those. because the department of treasury has an asset of foreign -- has a department of foreig

simpler approach to implementing both the letter and spirit of the vocal role provision in the dodd frank act. i think that is eminently doable because there is universal agreement on the five relevant agencies are working together to process the comments, very thoughtful comments that we have received in response a proposal put out earlier this year. so i expect that that process will come to a successful conclusion. >> when you announced the tailoring process, there were some comments maybe some complaints, that you weren't doing anything for the g6. if the goal is to try to ease regulations to make money more available for businesses as willie sutton said, you go where the money is that that's a large extent, that's the g6. so if the capital requirements are about the same, would you relax those requirements maybe about the same, maybe we would simplify the stress test a little bit. but have you done enough to make sure that the large banks are able to play the role that they is needed in order for a growing economy to have access to funds. >> we are continuing to look at the framework

loosening regulations that were put in place storing the aftermath of the financial crisis and dodd frank so i think they're going to keep going in that direction let me let me ask you a question let me turn the tables a little bit i happen to think loosening the regulations is a good idea is to know if you agree no bad i mean the bottom line is democrats and not all of them but they actually push for these regulations that would have had they been acted before the crash circumvented that problem but we wouldn't had the big crash but the bottom line now is some of those regulations are being scaled back but what debate some of the specifically in the future i want to bring it hilary for to see you and mark hillary i thank you for being with us what do you think of this new political landscape and particularly with trade what are your thoughts about how the new congress may impact trade or pleasure to be back i think we need to look at with regard to trade particularly nafta what's going to happen now that the democrats have control of the house and as you mentioned obviously the senate ha

as far as the legal infrastructure in dodd frank, i'm very skeptical. what happens is almost agree crisis the rulebook gets thrown out and you have new legislation in the last crisis you had t.a.r.p., mostly used to prop up the big banks to the conservatorship now. you had the reconstruction corporation, the new law in the middle of a crisis. so i think whatever the legislative framework is right now, i wouldn't say that it's completely irrelevant but because when it comes you will probably have legislative change certainly not set in stone. >> this image we are talking about institutions and banks and bailouts, but i don't want to lose sight of the little guy. i'm thinking about a documentary made in 1970 and there is this image of a woman crying because her house is being repossessed by the bank over not a lot of money. you have that image of the markets and you are thinking of this very well known and respected banker who's a huge proponent of free enterprise. he loves to talk about it, write about it. you have this image but then you see the woman's

kennedy: that is a sell b that t that and dodd-frank?erican public voted to make sure we're protecting obamacare. kennedy: they did not, they wanted to protect their own health care, not obamacare, there is a big difference. republicans potentially backing nancy pelosi. >> it is possible, they would love to see her next speaker of the house. he does best with an enemy. and she is a phenomenal fundraising tool for republicans. and if you are contending democrat won house back because of work that nancy pelosi di would have a different opinion. but, you know she is ineffectual she has problem, she condition brincan't seemto bring caucus t. >> it will be difficult. i love she kept saying, i really like nancy then this is the worse human on the planet. she said -- >> i want to get on -- >> the republicans want pelosi, the whole pelosi schumer, waters thing was you know trump at every rally was crowing about how horrible they are. you want that, now logical thing would be a younger person with new centralist ideas that has a platform that peo

it allows our community banks to escape the worst of dodd-frank.-chairman corals has set up a goal of transparency, efficiency, supposedly. i think he has made some progress but we are not there with success. the volcker rule is still very convoluted. we have historic levels of volatility and liquidity that should we us ill, have times of market stress. unfortunately, i think the fed could have done a whole lot more with their other prudential regulators in trying to simplify the volcker rule. that is number one. number two, i still don't understand why we have a qualitative aspect and not just a quantitative aspect to scar, a thatthe stress tests leaves too much discretionary power in the hands of regulators. i want to understand why that is there. ofy dropped it for one tier banks but kept it in for three. a good first step, but if it is the only first step, it is not getting is where we need to go to ultimately help sustain three, perhaps 4% economy. thed: how much is up to discretion of the federal reserve and other regulators consistent with s

i think in the last -- since the dodd-frank,isis and hedge funds have moved to the family office spacend converted to family offices. there is really no typical family office. we always say if you have seen one family office, you have seen one family office. so it is not an easy sort of market to kind of go after because each family office has custom portfolios.they tend to be complex. they tend to use leverage differently.i think what they hedge funds have done is really they have a different flavor to them than the traditional family office that we might see coming out of a family business that had been sold after 100 years of being in existence or a family business that is basically maintained in the cash flow from the business being used to go into capital markets or other types of alternative investments. >> i just want to spend another second on the idea that the family offices are levering up a little bit more. what are they levering up for?what are they trying to accomplish ? jim: i don't know that they actually necessarily lever up more. i think part of it is they always want

dialing back the stress tests, so there is a chance to refine and tweak dodd-frank.ot of republicans are for this. haidi: in terms of the inflation outlook, it is number three on the list of indicators the fed does to gauge. the report from friday, is there guidance from what the consumer index might like -- look like? inhleen: it really jumped october. look at this chart from the bloomberg library, 0.6% was the monthly rise on top of 0.2% the month before, three times bigger than expected. gasoline prices played a part but even year-over-year the ppi oil up2.6% and food and 2.5%. bloomberg is pointing to services. they see bigger margins for wholesalers and retailers when they are paying for their inputs and getting paid for their outputs in services, trade in services. this is a services economy. maybe people are having to pay for a part of their product mostly made up of labor and services make up half of the consumer price index due later this week. 2.2consumer price index is percent, steady in october which could be a steady reading when it comes to the pce infl

included significant legislation that was supported or impacted by the investigations including dodd/frank where we had a critical role with wall street abuse including sweepstakes reform credit card reform the bill that following enron , that those legislative reforms draft a significant part of the money laundering piece that i think was drafted by our staff on the subcommittee. even though they don't directly have legislative power to draft proposed legislation i think you agree you have a real effect on the legislative process on and the legislative process we make we have 12 bills this year that came directly from the legislative oversight reports enacted and became law but they would appear first in our report then a second group of legislators it could be members of the committee would sponsor the legislation then run through the regular course through the other committees. >> we are talking not only oversight by the oversight committees but oversight by any committee burkey i was chairman of the armed services committee at ten years at the end of my career we did a lot of oversight

the consumer financial protection bureau i think is one of the most important centerpieces of the dodd-frankms that we did. it has been under attack from the republicans and i have to do everything i can possibly do to undo some of the harm that mr. baldini has done. -- mr. mulvaney has done. >> it sound like you to will be butting heads. >> i think that he is going to >> i think that he is going to come to understand that he cannot just summarily dismiss the advisory committee. that is not going to work. this diverse group of people who were there to have that bureau carry out the mandate of the reforms that would put in place, it is extremely important. additionally, it has been very successful. under another, he returned to $12 billion or more to 30 million consumers. they took care of over 1,000,000.3 complaints that came into the bureau. a clearll clearly be part of your tenure. presidentlso pressed trump on a host of different issues including his financial dealings with deutsche bank. gavel of thee house financial services committee, will you issue subpoenas and go after the tax retur

efforts by the trump administration president trump has already rolled back some aspects of the dodd-frank financial restrictions, but a democratic house could stall further changes to that. we're joined by the former uk ambassador to the u.s. there are obviously going to be areas of contention between president trump and a democrat controlled house as there were between john boehner and president obama. do you think there's areas of policymaking where they could find common ground things like drug pricing like infrastructure spending >> in theory, yes. i think it's a good start that the president congratulated knonancy pelosi who could be th new speaker of the house america's infrastructure is crumbling, does need money, and it got stuck during gridlock previously that's not impossible. but on an awful lot of other things it won't be easy. this is a president who has been polarizing, critical to democrats, and there are lots of democrats, especially committee chairs now in the house who will be holding hearings into what his administration has been up to donald trump has already said if y

shepard she has used her staff as prod and speculum to force through such turkeys as obamacare, dodd-frankand the stimuli and lord only knows what monstrosity she could knit together with another wack as tweeker of the house. pelosi is an elitist statist and virtue is ability to raise money by selling favors to out-of-touch rich people in native san francisco. no wonder the diet communists hate her. only man she knows fixes her limo, establishment hax like pelosi and frenemy nemesis steny hoyer have no business rejoining populists and socialists, and those are the two groups tearing the party at the seams. representatives like tim ryan who boldly challenge the lioness are squawking in dissent but need to actively unashamedly unseat the ghastly establishmentairn from her fluffy throne before she smothers the party to death with her dirty throw pillows. the constitution is clear and the house speaker need not be an elected representative and only states, quote, the house of representatives shall choose their speaker and their officers. so go ahead and shoo horn hole lay blame hillary in ther

on dodd frank, she made sure it was a strong bill and that no democrats voted for the trump tax cuts,foregloen cfor foregone conclusion at the beginning. >> people are screaming on twitter that you don't like her because she's a strong, powerful woman and it comes from a place of pure sexism. >> you know, i'm not a big fan -- >> i'm not saying you, but the opposition. >> there's republicans who are not fans of her policies. they are progressive. she does go there. it's interesting that she was also the one who brought forward the american health care act. so she by doing that has brought something that the country now likes, which is and supports overwhelmingly, whether republican or democrat, the majority of republicans support it, or the country supports it. nancy pelosi was molded into a bad figure by the republicans for a -- on a whole host of issues. i don't think that the democrats who are against her right now even know why they're against her. i don't know that -- >> they just know that the republicans have run a lot of ads. >> and i don't know if they know what the speaker do

hate big banks and risks they pose to our economy and they love small banks, what we've seen after dodd-frankll the rules and regulations that came from dodd-frank have made big banks get actually bigger and small banks that serve communities like mine in wausau, in merrill, they have gone away or had to partner with larger banks taking decisions out of small communities across the country and moved to them more populous centers which is bad for the country i think. stuart: we had some degree of financial deregulation already. >> yeah. stuart: i put it to you, sean, she cannot roll that back, she can't reregulate or can she? >> listen if she wants to try to legislate, she will not have only pass the committee, has a thin margin there, get the across the house, maybe democrats will do that but i don't think she will get it through the senate and i don't think the president will sign it. that is challenging for her. she is focusing what she can do in financial services to go after any banks, any financial institutions that dealt with president trump and his business dealings, subpoena them in,

. >> we're working on dodd/frank reform issues.re we don't go into another recession. we almost went into a depression in 2008. so first of all, we've got to be concerned about the big financial institutions of america. >> joining me now, chief financial correspondent and author of the edge newsletter my friend felix salmon. a lot of this has nothing to do with president trump. what can we expect to see out of the house financial services committee come january? >> we're going to see housing, farm aid, fannie and freddie. there's going to be a lot of just blocking and tackling democratic talking points. they're obviously not going to pass any legislation because they don't have the senate, they don't have the white house. but as far as the press is concerned in the media, we're going to pay attention to, frankly, is going to be the deutsche bank stuff, the penas a subpoenas and -- >> deutsche bank, where i, full disclosure, worked for eight years of my life. maxine waters called deutsche, which is the one bank that did banking serv

significant legislation which resulted or was supported or impacted by our investigations including dodd-frank where we had a a critical role in terms of wall street abuses, including sweepstakes reformer, reddit card reform, the reform we did on following enron, the reforms the following enron. which would legislative reforms i think we drafted cyclically part of the money laundering piece of sarbanes-oxley, for instance, i think was probably drafted by our staff on our committee, subcommittee. even though investigative subcommittee don't directly have legislative power to draft and propose legislation, i think you would agree you could have a real effect on the legislative process undone legislative -- >> we had 12 12 built this year they came directly from the legislative oversight reports that were enacted and became law. but they would appear first in our report then a separate group of legislators and it could be members of the legislative oversight committee which sponsored the legislation and then it would run to the regular course to the other committees. >> we are talking about it bu

>> obviously when it came out of barack obama, it was dodd-frank and that monstrous regulatory scheme, caused a lot of problems for midsized and small banks. here's the deal. with democrats in charge of the house and with folks like elizabeth warren running for president in 2020, tech regulations are coming. the only question is how and when. the good news for tech is president trump doesn't like regulations and essentially what i can see happening here, because there's bipartisan appetite when it comes to data privacy on capitol hill, something narrowly tailored towards data privacy with an eye on what's going on in the eu. charles: you know, lot of people say the constitution could not have taken into account the emergence of facebook or amazon, so maybe this gets murky. help clear this up. from a law point of view, what could be applied to them that would also not abuse the first amendment? >> well, facebook has been very careful to make sure they are not a public utility, that they are still maintaining a private platform status. so from a first amendment question, there's really

2008, 2009, 2010, extraordinary work done with the affordable care act to the recovery act, to dodd-frankn. then, through the bad times. maintaining the democratic position on health care systems, specifically. we fought back 63 times against the republican congress on that matter. ultimately, in the 2018 election, the public said "yeah, we've got health health care." and she led that together with the rest of her team. she changed the congress of the united states, together with her team. with regard to those people that want to come up and be the next generation, they are actually in the process of being elected. i don't consider myself among those. i'm not looking forward to climbing up the ladder. but there are others that have already been elected. into leadership positions. >> harris: give me and simple. i would assume you mean 70 like hakeem jeffries? >> him, certainly. the new chairman of the caucus, kathleen rice -- excuse me, not kathleen rice, but the advice chairperson and then you go down to the list. ben gray, . they are new people in line for the next change that will clear

so i highly doubt that she can roll back a lot of what has been done in terms of to reform dodd frankin march of this year, i believe the small banks that were under this heavy burden of regulation and capital requirements under 250 billion, they actually had that removed, the so called systemic failure, too big to fail because they are not. they are small banks. so we want to keep the small banks separate from the big banks, under different regulatory requirements. so i don't think she stands a good chance of getting anything done. it won't pass through the senate. and the president can always veto it. >> yeah, i guess i would sort of echo what heather was saying, but maybe even be a little more optimistic, if you will, in terms of the limited down side here because really there was not much real deregulatory effort in the financial sector when the republicans had the house, and in the trump administration, there's some easing of the rules, but generally, this system of giant banks, many of them obviously located in this city city, with the government backstop is not really changing

big on regulation, and he wants to avoid the headaches of a monstrous piece of legislation like dodd-frankunintended consequences. i see something narrowly tailored working towards data privacy, and if that doesn't work, then you may have more government regulation. the idea is to put some brake on big tech but not to clamp them down. remember, they're also driving our economy and our jobs. elizabeth: yeah, that's an important point too. silicon valley is a big economic growth driver. kevin, the level of debate is so impoverished in this country, the fact that big tech has been censoring conservative thought and discussions on policy, on economic policy when way back in the day he saw ted kennedy -- i will always say that ted kennedy and chuck schumer voted for the tax cuts. we don't see those debates happening on facebook or google's social media. what is going on with these algorithms basically censoring conservative debate? it is ruining this democracy, that's what the polls are showing. >> liz, i couldn't agree with you more. i'm a die jr. hard democrat, that's why i come on this show,

she has very few regulatory -- i mean dodd frank, the way it's intrepghted now in a very loose fashionreserve which is run by a trump appointee by the treasury department is not going to be changed by her. there is nothing that she can do. her big focus is from what i understand is on those two banks for the reasons i pointed out. wells fargo because she thinks they are lousy in terms of cra and giving back to the community whether it's true or not i have no idea. that's what i'm hearing from her people and deutsche bank because it was donald trump's bank. there has always been a lot of suspicion among democrats that deutsche bank is, you know, has strong ties with russians and trump and, you know, whether this is a conspiracy theory, it could be. that might not stop her from doing an investigation on this whole thing. >> charles: right. does this social justice narrative that she is going to base her stewardship of the house financial services committee, can we get anything done if it's all about investigating, trump's bank, all about getting back at wells fargo for not treating the b

and the dodd/frank act and the wise regulators following dodd/frank and that is being weakened by the trump association. on the securities side major problems in securities regulation have gone unaddressed now for decades and they have created two fundamental problems that go to the question of shaping markets. they have consequences not just for the securities markets, and for the fairness with which investors are treated in the markets. but they have consequences for the health of our economy and the health of our society because so much is being allocated through those markets and because we consistently try to allocate through those markets -- to make decisions through the securities markets as a society that we should never make. i'll give one example. for 30 years we have tried unsuccessfully to get infrastructure structure made through the securities markets. the consequence of that 30-year decision is that we have fallen from the world's premier nation in terms of the strength, sophistication and comprehensiveness to somewhere in the second rank. when we did it the right way,

there are stricter rules on banks and investment banks, they need to hold more reserves given the dodd-franke, so that has created a problem that people are seeing in the fed's funds rate. this is a lovely chart into the bloomberg library -- remember, the fed targets a range for the fund rate, now it is 2% to 2. 25%. the effective fed funds rate, see how it used to be a little margin here, now they are too close together. how will you control the funds rate if you cannot control the interest on access reserves? what i'm turning say is that the demand for fed funds has grown at a time when there is not a lot of liquidity out there, that is what people are worried about. what he said was that if they need to make a technical adjustment, they already made one and they can do it again. i will wait to hear from the new york fed president, john williams, when he speaks and talks about the dilemma, because they are the ones who are at the plan and may be involved in changing it, if they feel like they need to slow down on reducing the balance sheet. shery: citigroup was thinking it could happen in