most mortgages are backed by fha or gse. it's not a great place for the industry and the market to be. which is why i said gse reform, it's a path toward private active private marketplace. and. >> but you -- >> all right, sir. the experiments that have been successful, we see there are ideas there, that you can insulate the public from the first risk and start to bring private money into the place. it can be through mortgage insurance and capital market products. more thought has to be put into that area to develop it further. >> you do believe there's an equal secondary market? >>. >> sorry. >> you do believe we need a secondary? >> yes, i think it would be good if there were more private nongovernmental -- >> so the gse's would be a hybrid? >> yeah, or they would have competitors. >> i think there's a -- in this committee, there's some suggestion from time to time that the gse's are not even needed needed. one of the things i'm concerned about, when some prefer it be completely private whether or not the private market yo

and i would have to say that the gse reform is something that we have to be a part of. i'm not optimistic that that is going to happen legislatively. but it's widely engage so much in bipartisan discussion to try to work through this. >> a member of the committee you know you mentioned the gse reform which is now part of the fha. and in doing a great job some of the work they have been doing has been helpful with some of the needs that we have with money being put into the housing trust fund. but one of the things that you may be able to help me with. what do we do that enables us to move back in to the market. >> i think that there have been small steps taken but there needs to be an active effort to look at what can they do to have a more active private to securitization. most mortgages are backed by either fha that it's not a great place for that part of the market to be. which is why they have an active private marketplace. the experiments have been useful like putting situations in place. we have seen that there are ideas there that you can insulate the public from

for reform in the area of gse. >> can i take that as he is? >> you don't have to look at the report. >> the agencies themselves. we can also agree that of the ten voting members i'm not read the entire report. identify emerging threats to financial stability. can you.to any page airport they identify a policy will? we can't find it. >> we identified the threat. many have a connection to federal policy. >> you also have the mandate to make recommendations. how you make a recommendation if you can't cite a source? >> it is not my view that the regulation is a significant risk. >> increasing evidence that we are suffering greatly liquidity in a corporate bond market. this report cites it. we know that the midmarket companies poured cash. the our jobs and economic growth. many many economists believe this will be the source of the next financial crisis. somehow the thin red can connect this on illiquidity to the vocal. sec commissioner randel your cftc commissioner the treasury larry summers' enthusiasm for keeping it institution safe. the last te

for reform in the area of gse. >> can i take that as he is?you don't have to look at the report. >> the agencies themselves. we can also agree that of the ten voting members i'm not read the entire report. identify emerging threats to financial stability. can you.to any page airport they identify a policy will? we can't find it. >> we identified the threat. many have a connection to federal policy. >> you also have the mandate to make recommendations. how you make a recommendation if you can't cite a source? >> it is not my view that the regulation is a significant risk. >> increasing evidence that we are suffering greatly liquidity in a corporate bond market. this report cites it. we know that the midmarket companies poured cash. the our jobs and economic growth. many many economists believe this will be the source of the next financial crisis. somehow the thin red can connect this on illiquidity to the vocal. sec commissioner randel your cftc commissioner the treasury larry summers' enthusiasm for keeping it institution safe. the last testim

things that we discussed at that forum were an increase in private sector credit risk sharing by the gses, including a time line to ramp up the offerings. the creation of a common platform which allows for issuance of mortgage-backed securities other than the gses, and the development of a common residential mortgage backed security by fanny may and freddie mac. and i thought i would just give you the floor to discuss how this might bring private sector back in the market and how we might work together to achieve these goals as kind of a building block. >> congressman, we of course appreciate your efforts on this financing reform. having finance reform has been a long and winding road i think it's fair to say. but the administration is supportive of housing finance reform. and in fact, i think there is agreement on some of these issues. the president has made very clear that he does have an interest, i think like all americans do in taking taxpayers off the hook in the event of god forbid that we did experience the same kind of housing crisis that we just went through. agreed that we can

things we've discussed at that forum were an increase in private sector credit risk sharing by the gsesluding a time line to ramp up the offerings, the creation of a truly common securitization platform which allows for issuance of mortgage-backed securities other than the gses, and the development of a common residential mortgage-backed security by fannie mae and freddie mac and i thought i would just give you the floor right now to discuss how this might bring private sector capital back into the market and how we might work together to achieve these goals as kind of a building block. >> congressman, royce, i, of course, appreciate your efforts on this issue of housing finance reform. housing finance reform has been a long and winding road i think it's fair to say but the administration is supportive of housing finance reform and, in fact, i think there's agreement on some of these issues. the president has made very clear that he does have an interest. i think like all americans do in taking taxpayers off the hook in the event, god forbid, we did experience the same kind of housing c

i see it the gses are still in conservatorship, which means the federal taxpayer is directly standinghind them if they fail in the future. >> well, they've done that from day one. >> well, no. from day one there was actual denial that there was a backstop. >> who denied that? >> it was in law? >> well, i would respectfully and strongly disagree. and i think pacts pointed out i was right. >> i think that we've seen over the last several years the estimates of the potential risk of a problem in the gses is still quite large. >> i understand. but if the money were going to a separate account to sit there and build up some kind of capital reserve, i think you'd have a fair argument. >> well, the -- >> doesn't bear up in my estimation. >> liability is born -- >> number one, they deserve their money back now that they're stable. number two homeowners deserve lower interest rates unless they're being told what the money is being used for. right now some of their money is being used to support something other than fannie and freddie. i guess we'll have to disagree on that. with the last few s

for reform in the area of gse. >> can i take that as he is? look at the report. >> the agencies themselves. we can also agree that of the ten voting members i'm not read the entire report. identify emerging threats to financial stability. can you.to any page airport they identify a policy will? we can't find it. >> we identified the threat. many have a connection to federal policy. >> you also have the mandate to make recommendations. how you make a recommendation if you can't cite a source? >> it is not my view that the regulation is a significant risk. >> increasing evidence that we are suffering greatly liquidity in a corporate bond market. this report cites it. we know that the midmarket companies poured cash. the our jobs and economic growth. many many economists believe this will be the source of the next financial crisis. somehow the thin red can connect this on illiquidity to the vocal. sec commissioner randel your cftc commissioner the treasury larry summers' enthusiasm for keeping it institution safe. the last testimony you found no

but gses guess what, he has to bend on those issues not just to get nomination but withins to run again and win. >> can we keep charlie here if you don't mind? you go out to work out lunch or whatever 37 absolutely. a difference but the next most of in the senate more to the point of that, changed marketly now, or could. remember they decoupled these provisions of, for example, for businesses unions and the like. whether that could make us a tough sell in the united states senate. bill nelson joining me right now from the fine state of florida. what do you think senator that the livelihood that this would pass assuming it goes through in the house today. yk that is a big assumption but that would carry over to the senate. what do you think? >> it will pass. >> i think it is more complicated in the way that the house is splitting it up -- they're going to pass just the tpa. there are some of the moderate. thamplet is the trade promotion authority the one that gives the -- >> that is the fast track authority. >> there are democrats in the senate that will vote for this, but they want the

it's not like gse reform.fter year where people kind of build opinion. this is a fairly new issue. last congress we said this isn't going to have an impact on consumer prices now we have to continue the next step everybody that is bali hooing this should understand that restricting the export will stop the investment and will curtail ourself sufficiency. >> have you ever head a conversation with this since it could be solved with executive order? >> i have had a conversation? these are conversations i frequently don't comment on. but you know i will tell you he understands. he's in that category of understanding. i think his state department understands how significant and the energy department understands. >> he doesn't want to sign it. >> everybody wants kumbaya and say we will make a bipartisan decision to do this. so, obviously, i can't speak for the administration, but i will tell you at the highest level they understand that this policy -- >> john if we don't export will the price of oil go down? we seem

foundation to build on and we look forward to working. >> the question i was trying to drive to his gsencreasing the risk sharing activities in the form of volume knob offerings and percentage of risk sharing would be a big step to bring private capital in. certainly the common securitization platform and the idea you are familiar with but making that available for the private sector to come in as well would be helpful. >> i am very willing to have conversations about that and build on legislation. we are hopeful the ball within congress' court. >> let's go to another question, mr. secretary. that is the headline i saw. links feed market share to thinly capitalized on banks. we do have a situation where the fha market share for large banks is recently cut in half from 61% to 43%. that is a concern. mom bakes have increased 24% a year later 51%. for several years later. is this troubling and using legal uncertainty is maybe part of the problem in terms of getting the traditional lenders more involved here and what about the need for greater certainty about the framework here. looking at