we are heavily incenting bankings to refinance. refinanced twice in the last six months and i don't understand why the government is pushing this farther and these incentives just create bad outcomes. banks engaged in riskier loans after the bail outs. regulators came in and said you need to float money around the market to clean it up. >> bill, do we just help a small sliver of those in trouble or help everybody. >> offer them all the same deal. mortgage written down to 90 percent of your home's value but yoo that and plus half of any gain. you have a $250 gage the mortgage down to $180 and move out for a maul profit or stick around for 10ears. >> by the way, i have run out of the space. mike, do we help a small group or everybody. >> if you help small group and that doesn't work. you help everybody. >> i am for helping no body, david. home prices were overvalued by 20 percent . things have only gotten worse. look, you can boost up prices but that doesn't mean it is what the house was worth. you need rising incomes. >> steve, the

if you did away with it, there would be less of an incentive for me as a bank toes wh you an then to lend to a business. >> an litically you're correct. quantitatively, it's trivial because against the 25 basis points, the banks also have to pay an fdic assessment. so they're basically getting maybe one-tenth of 1% return. that's certainly not going to prevent them from making good loans. bet? if i'm a bank, right now, say that's still a better bet than what i'm getting elsewhere? and if you did away with that entirely, then would i have incentive to try to find that better investment elsewhere? >> it would be a ten basis point incentive. that is pretty small. that is just the overnight rate. >> so if that's the case, that would run counter then to what your opening statement is as far as incentive and effect on the money market funds and the rest since it's only de minimus amount. >> no. remember, bank loans are typically a year or more. whereas money market funds are mostly under 30-day investments. >> all right. >> and the federal funds market, of course, is an overnight market. >

now if you were a ordinary depositor in a bank and the bank failed, you still got your money back. therefore, there was no incentive to run on the banks. and in fact, once the deposit insurance was established, there were essentially -- we went from literally thousands of bank failures to zero. it was incredibly effective policy. the other thing that fdr did, although it drew a lot of smoke while he was doing it, basically he abandoned the gold standard. by abandoned the gold standard, he allowed monetary policy to be released and allowed expansion of the money supply, which ended the deflation and led to a powerful short-term rebound in '33 and '34. so the two most successful things that roosevelt did were essentially offsetting the problems that the fed created or at least exacerbated by not fulfilling its responsibilities. so what are the policy lessons? it was a global depression, had many causes. the whole story requires you to look at the whole international system. but policies in the united states as well as abroad did play an important role. in particular, as i said, the federal reserve failed in its first

didn't know were coming, we get angry and feel like we're getting ripped off and giving the banks incentives to rip us off. here if you have a choice and have a menu and you can say i can put so much in the bank and charged this much if i put more in the bank i'll be charged less per month -- so, dennis, why is the stock moving up by another 2% today? >> well, as the u.s. economy goes, so goes bank of america. we like to think that the great minds in charlotte and new york can come up with great plans for making money, but let's be honest. bank of america is leveraged to the u.s. economy almost full stop. and if we view the economy as performing well, we've seen some preliminary job numbers today that suggest perhaps that the economy's picking up pace. if the gdp numbers come in well for the next few months, i think bank of america will continue to do well. but should there be a retreat in overall economic indicators, b of a will follow accordingly. >> so, neil, tell me how b of a should finesse this this time so that it doesn't cause the uproar that it did the last? you kind of touched on i

banks got a clean bill of health from the federal reserve and permission to boost incentives. investors dumped shares of citigroup in late trade after learning the nation's third largest bank was among those that did not pass the fed's stress tests >> economic optimism pushed the nasdaq above 3,000 since the dot com bubble burst in 2000. and adding to optimism a healthy increase in february's retail sales. urban outfitters was the exception, losing 5% on a weak earnings report. yesterday the u.s. asked the world trade organization to force china to ease restrictions on exports of raw materials. china's state-run news agency warned the move could trigger a backlash. former news international exec was released on bail for the second time yesterday in connection with an ongoing phone hacking scandal at the london tabloid. back here at home, the securities and exchange commission charged two amerprise financial advisers with insider trading one of them announced through alcoholics anonymous. >>> finally, the end of an era. the 2010 print edition of the iconic 32-volume set will be

specifically on how they do in selling that production as pow -- as opposed to a larger bank and the computation incentive may be more diffuse. there also may be fewer controls in place there. so even though the entity wants its people to comply with the law, they don't always. when you listen to calls, things may go very differently when they are competitively trying to sell that product. we will look carefully at all aspects of this, and not be content with the notion that there i a vendor contract. whoever is dealing with them is the person that is potentially creating harm to them. >> you can look and see if those vendors are being overly aggressive or are being misleading, things that banking agencies may not have delved into because from a safety and soundness standpoint they were content with the liability issues. >> yes. >> and i think the banking industries did delve into those issues to a certain degree, but because they had a contractual relationship, they weren't necessarily contractually reliable. the bottom line s. i think for the direct contact with the consumer, that's our focus. we will b

incentives. only the american banks are in the business of expanding overseas assets. they are starting to increase lending, finally looking like they're coming out of their banking crisis and the world is their otherwise sistyster. >> okay. plenty more to come. chris even. >>> coming up, the bank of england due to release a slew of data. we'll break the figures down for you. >>> public services comes to a near halt in spain as workers proceedest against the labor reforms one day before the unveiling of the budget. >> number of job seekers falls more than expected in determine if i in march. >> and in uts, investors will be searching for clues in today's gdp report on whether consumers are spending more and what that could mean for the the rest of the year. >> that german jobless rate, that's a post reunification low rather than an all-time record low for germany. 1 pmt 8 billion in january. slightly weaker than forecast. big drop off from february's 57,000. so nearly 9,000 less. the february consumer credit was 0.4 billion. it was forecast at 0.2. so pretty low number

banks. so, yes, democrats were complicit in this. and we've got to do better ourselves. but bottom line, what we have to incentnks where their relationship to their clients is one of partners and advisors rather than predators. >> indeed. congressman peter welsh, thank you for being honest, an expert as ever on these issues. thank you, sir. >> thank you. >> and we'll be right back. [ dog barking ] ♪ [ female announcer ] life is full of little tests, but your basic paper towel can handle them. especially if that towel is bounty basic. the towel that's durable and scrubbable. in this lab demo, bounty basic is stronger than the leading bargain brand. everyday life. bring it with bounty basic. affordably priced. tested by everyday life. ttd#: 1-800-345-2550 let's talk about the cookie-cutter retirement advice ttd#: 1-800-345-2550 you get at some places. ttd#: 1-800-345-2550 they say you have to do this, have that, invest here ttd#: 1-800-345-2550 ttd#: 1-800-345-2550 you know what? ttd#: 1-800-345-2550 you can't create a retirement plan based on ttd#: 1-800-345-2550 a predetermined script. ttd#: 1-800-345-2550 at

you are incentivizing the banks to keep their excess reserves? that contracts their incentive to lend. is that not counter to what your policy should be? if you did away with it, there would be less of an incentive for me as a bank to leave my reserves with you and to lend with a business. >> quantitatively, it is trivial. the banks also have to pay an assessment. they are getting one-tenth of 1% return to hold the money with us. that is not going to prevent them from making good loans. >> if i am a bank, that is still a better bet than what i am getting elsewhere? if you did away with that, would i have an incentive to try to find that? >> it is pretty small. >> it seems that would run counter to what your opening statement was, as far as the incentive and the money market. it is only the minimal amount. >> remember, loans are typically a year or more. money market funds are typically under 30 days. the federal funds market is an overnight market. >> another question, you talked about this situation in greece. my only concern is that you have an open swap line, not just with

banks, but government does have a role. i like regulations that are based on reinforcing economic incentives. make people put skin in the game. if they take risks and lose e ney, make it hurt, make it government. risk retention for securitization, making people who securetize loans maintain some down size risks. if i'm going to have a rule that says you can only make mortgages, where the borrower can repay the loan. that's going to get you into a thousand questions. what does ability to repay mean? what about an adjustable rate? there's lots of difntask. but if i say to that person, if you originate this loan and put it in a securitization, for every dollar of loss, you're going to take five or ten cents for yourself, they're going to say okay, this person has an adjustable rate mortgage, what is my chance of having to take a loss? i think those regulations are based on economic incentives. if you need activities based restrictions as well, but i like the skin in the game requirements. >> i want to invite those of you who have questions to go to the mikes. i want to ask you, some weeks ago, y

finally, when the central bank has the ability to drive short- term interest rates below long- term interest rates, they are teaching the incentives for taking risks, and they are having to do this because in the wake of the financial crisis, everybody has lost their nerve, and our confidence in the future has changed, so it requires so little bit of nudging to get people to invest in the future, and that is what we are beginning to see, and you cannot dismiss the power of monetary policy actions, and the federal reserve has made it really clear what their goal is. their mandate is maximum employment subject to keeping inflation down, so as i think of what is ahead of us, i imagine we are slowly getting back on our feet. we have a very slow record of doing this, and those who believe this is a new normal, frankly, there is no history to this, and that is why i am optimistic. we are going to see more signs of optimism. one quick note about this. we all know california is struggling, but what i think is interesting is you are starting to see things moving. employment growth. employment growth is outpacing the national economy, so th

banks that manage i.p.o.'s will be able to use inside access to past financial results to come nature research on new companies with incentives to promote their firms' banking clients. the american people want big banks and large companies to play fair and comply with the basic rules and responsibilities that go with being a public company. that's not too much to ask. i believe that history will judge this misnamed bill quite harshly. instead of rushing to pass this bill, we should be working together to protect the interests and economic well-being of the american public. we should be focused on creating jobs and helping work force. -- working families. this bill does not in my estimate do that. indeed, ironically it could harm our constituents by shattering their faith and it's been tested quite recently by the financial crisis and other crises, in the market, rather than reinforcing their confidence that they will be protected while they participate in the market. i believe we're capable of writing better legislation without sacrificing important investor protections. and i hope that we can go forward. i'm disappointed tha

now if you were an ordinary depositor in a bank and the bank failed, you still had your money back. therefore, there was no incentivehousands of bank failures to zero. it was an incredibly affected policy. the other thing that fdr did, he took a lot of smoke when he was doing it, he abandoned the gold standard. by abandoning the gold standard he allowed monetary policy to be released and allowed expansion of the money supply which ended the deflationary and led to a powerful short-term rebound in 1933 and 1934. the two most successful things that roosevelt did or essentially offsetting the problems that the fed created or at least exasperated by and fulfilling its responsibilities. what are the policy lessons? it was a global depression, it had many causes. the whole story requires you to look at the whole international system. policy did play an important role. as i said, the federal reserve failed in the first challenge above parts of its mission. it did not ease monetary policy aggressively to prevent deflationary in the collapse of the economy. it failed its economic stability function. not adequately perform it

now if you were an ordinary depositor and the bank failed you still got your money back and therefore there was no incentive to run on the bank. in fact once deposited insurance was established we went from literally thousands of bank failures to zero. it was an incredibly effective policy. the other thing fdr did although to a lot of smoke when doing it was he abandoned the gold standard and by abandoning the gold standard he allowed monetary policy to be released and allowed expansion of the money supply which ended the deflationary and lead to a powerful short-term rebound in 33-34. the two most successful things roosevelt did were essentially offsetting the problems that the fed created or at least exacerbated by not fulfilling its responsibilities. so what are the policy lessons? it was a global depression, had many causes. the whole story requires you to look at the whole international system. but policy areas in the united states as well as abroad played an important role. in particular the federal reserve failed in its first challenge in both -- both parts of its mission. it did not use monetary pol

lastly, the legislation gives the export-import bank a greater incentive to aggressively encounter incentive loans, below market loans like the one i mentioned in the case of ethiopia and china that countries like china often use to undercut our bidding in the process. it was interesting, i might say to the senator from delaware, after the president of ethiopia explained to me how the chinese were offering these concessional loans, he then said we turned around with a telecommunications contract and the chinese won that too. he said they're winning everything. that's not good news for us. we have the capacity to produce goods and provide services competitive with any nation in the world. once they have basically become a part of the local economy and once they are part of the local culture, it's difficult for our companies to compete. that, i think, is the real challenge that we face. so that's what this bill basically does. and i think it not only creates an opportunity to create jobs here, but as has been mentioned by senator boozman and senator coons, these are developing nations reaching

incentives in the financial system, more full-throated return to old-fashioned concerns about lending to small, medium sized businesses and doing responsibility and taking care of your deposits and a critically important function of the banking system is making payments rapidly, accurately all over the world and all kinds of contortio contortions. that's a job for commercial banks. that's not a job, in my opinion, for speculative institutions. hedge funds can go out and speculate or people can speculate individually in whatever they want to do, but they shouldn't be protected by the government. i can give you my long lecture which i'm going to give on financial reform. the difference is those firms are going to be speculating and doing proprietary trading should not be rescued by the government when they get in trouble. that's their own responsibility. [ applause ] and most of them, take the hedge funds, they are largely in the past financed by partners, limited partners. they're financed basically by equity, which is as it should be. banks are basically financed by borrowing. >> let me ask you a question about the volcker rule. as i read the volcker rule you were hoping for a morrow bust version of this than we ended up. is

where the central bank expects inflation to be coming down, but i would agree probably stickier than general and as a result, it still provides to me an incentive from the u.s. investor point of view to the more on the equity side than the fixed income side. >> yields are low. roughly 2.3 on the ten year, 2.# on gilts. and those are through in-thags abo inflation. so we wouldn't disagree with you that pond yields look lbond yie. there are still uncertainties out there and central banks will keep rates on hold for the next two to three years. so the 2%, 2.5% rates don't look great in the context of inflation. at the look okay relative to short rates. equities and risk assets in general as you know had a very good run. so i'd be a little bit cautious on chasing risk assets at this point. >> also some chatter out there of course about a potential downgrade for the uk. would this be a big issue? >> i don't think would to be honest. i think the big news was the u.s. down grade last year. as an investor in the uk and global investor, the things you worry about are the credibility of the policy framework, the resiliency of the currency and the ability

incentive. and the prop trading model inside the investment bank where you are supposed to be serving your client. whether it's true or not the doubts are there. clients have to make those choices and banks in terms of what they present to their clients have to make those choices. >> that to me is an older discussion that we have had, this guy piling on is -- i did take this with a huge grain of salt. >> we can go down the list of the top 30 professions in the country and i can find conflicts of interest and good apples and bad apples. i can find doctors that self-refer patients and schedule unnecessary tests. i can find so many ways. and then you get all the way down to the argument whether everything should be not for profit, whether that's a good model. think about it. >> i don't think you get down there at all. >> in health care. couldn't we have an argument about whether the profit incentive should be totally devoid -- divorced from health care? >> well, yesterday. >> we talked about it off camera. >> between equity, providing health care service and innovation and it's a balance. it's a bal

bank of america and a prevented homeowners from receiving a mortgage loan modifications under the federal government's ham program in order to avoid millions of dollars in losses all this while benefiting from financial incentives who are participating in the program now the whistleblower his name is gregory mackler is a colorado resident who said he worked alongside b. of a executives while he worked at a company that was contracted out by the bank and while working there he said the bank and its agents routinely pretended to have lost homeowners documents failed to credit payments during trial modifications and intentionally misled homeowners about their eligibility for the program letting just enough modifications go through to avert the suspicion of the shady picture and it raises a lot of questions about all the new assistance that the of a supposed to provide for the recent fraud foreclosure settlement so joining me from our studio to discuss it in new york is matt stoler fellow at the roosevelt institute matt thanks so much for joining us tonight and i don't know i guess maybe we can't be all that shocked these days anymore when we hear the another bank or maybe specifically bank of america did something

bank they put their money in. deposit insurance removes that particular incentive. this is normally focused on smaller deposits. >> correct. >> the coverage limit was raised recently and was pretty high to begin with. do you think it's too high in terms of getting the right balance between protecting. >> that was raised on your watch. >> that's right. that is a very good question. congress sets the deposit insurance limits. i was supportive of temporary hike. i think the permanent hike can be justified. i'm not sure people with less, even $250,000,000, especially these days because so many people have, don't know where else to put their money, they have their money in the bank, folks under those insured deposit limits are going to add a lot to market discipline. certainly the average main street family they're not going to go to the fdic website and download call reports or go through financial analyst reports. you're not going to get a lot of market discipline from main street depositers. i do think it is important for them to have peace of mind, a safe place they

bank they put their money and. deposit insurance removes that particular incentive. it is moment focus on smaller funds. the coverage limit was raised recently and was pretty high to begin with. do you think it is too high in terms of getting the right balance between protecting -- >> that was raised on your watch. >> that is a very good question. congress only says that the deposit insurance i would support the temporary hike. and i think that the permit, it can be justified. i'm not sure people with less, $250,000, especially these days, they don't know her is to put their money, that the folks that are those insured deposit limits are going to add a lot to market discipline. certainly the average main street family, they're not going to go to the fdic website and download call reports are going to financial analyst reports. it is not going to get a lot of market discipline from main street depositors. and i do think it's important for them to have a safe place they know they can keep the money and it's going to be readily available to them but i think is a good public policy for the. deposit insuranc

corps and others, target tax incentives that spur clean energy, technological investment in the private sector, widespread domestic investment including infrastructure bank, $566 billion surface transportation bill, unlike what they tried to pass today, which is a three-month extension. mr. speaker, can you believe it, the republican caucus is going on and on with uncertainty and what did they do? created uncertainty by passing a three-month transportation bill. it boggles the mind, actually. and back to the budget for all, $1.7 trillion in the widespread budget. it does so in a way that does not devastate what americans value. we achieve these notable benchmarks by focusing on the true drivers of our deficit, unsustainable tax policy, wars overseas and policies that caused recent recession rather than putting the middle class and social safety net on the chopping block. the budget creates a fairer america, ends tax cuts for the wealthiest 2% of americans on schedule at the year's end, extend tax relief for middle-class households, and eliminates tax code prenchshal treatment, abolishes corporate welfare for oil companies and eliminates loopholes, create

incentive to seek a political solution. they ask congress for support or to pressure the federal reserve or other agencies to save them from a failure. repeated rescue's encourage banks to take greater risk and increase leverage. this is a well-known moral hazard problem. each of these problems became manifest in 2008. to avoid these problems, the sound dollar act requires the federal reserve to publish as lender of last resort policy. we do not expect a precise tactical plan. as president eisenhower observed, more plants never survive the first battle. nevertheless, were planning is essential to victory. in the same way, the federal reserve cannot anticipate every nuance of the next financial crisis. publishing a lender of last resort policy will reduce future market uncertainty. next, i want to applaud chairman bernanke for steps to increase transparency in monetary policy decision-making, but there is an additional step the federal reserve should take. the sound dollar act speeds the release of transcripts of meetings from five years up to three years. some critics claim this acceleration woulddiscussion ate need different fomc members. a three-year lag will allow

as opposed to a larger bank, it may be one of many product lines and the incentives may be more diffused. there may also be fewer controls in place. even though the entity wanted people to comply with a lot and do things right, they don't own us. there could be scrips that are written how -- britain out, and when you listen to calls, it couldn't have gone -- that are written out, and when you listen to calls, it could have gone very differently. we are not going to be content with the notion that there is a vendor contract and that provides protection for the institution. from the consumer side, it does not matter. whoever is dealing with them is the person potentially creating harm to them, and that is our focus. >> you would be looking to see if the vendors are being overly aggressive and trying to sell their products to consumers, were being misleading, things that the banking agencies might not have delved into because there were content with the liability issues that were set up with the vendors. >> yes, and the banking industry did delve into those issues to a degree, but there was

incentives in the financial system. i hope we will return to old- fashioned concerns about lending to medium and small businesses and taking care of your deposits and the critically important functions of the banks that are making payments accurately all over the world in all kinds of contortions. that is the job of commercial banks. that is not a job for specialty institutions. hedge funds can speculate or people can speculate individually but they should not be protected by the government. i could give him my long lecture on financial reform. those firms have got to be speculating during proprietary trading but they should not be rescued by the government when they get in trouble. that is their responsibility. [applause] take the hedge funds -- they are largely, in the past, financed by partners, limited partners. they are financed by equity. as it should be. banks are basically financed by [inaudible] >> as i read the volcker rule, you were hoping for a more robust version of this than we wound up with. is that accurate? >> all this fighting about response from banks and so forth is too robust. >> they want to make it a little v not a big v. >> they said it will not have any room to breathe.

rebalancing of incentives in the financial system, a return to old-fashioned concerns about reading too small and medium- sized businesses, critically important functions of the bankingrcial banks. it is not a job for speculative institutions. people can speculate individually or whatever you want to do, but they should not be protected by the government. the difference is those firms are going to be speculating and doing proprietary trading should not be rescued by the government when they get in trouble. that is their own responsibility. [applause] most of the hedge funds in the past were financed by equity, as it should be. banks are basically financed by borrowing. >> let me ask you a question about the vulolcker rule. were you looking for a more robust version of the world? >> we were fighting the response from banks and so forth in a role that was too robust. quite you want to make it a little v and not a big v. >> it is really a reaction -- this gets into the current philosophical question about financial regulation. could you put out some broad principles, try to make sure that the banks understand the principles, and check up on them later. that sounds sensi

incentive to seek a political solution. they ask congress for the administration for support or to pressure the federal reserve or other agencies to save them. and third, repeated rescues encourage banks to take greater risks and increase leverage. this is a well known moral hazard problem. each of these problems became manifest in 2008. to avoid these problems in the future, the sound dollar act requires the federal reserve to publish this lender of last resort policy. of course, we don't expect a precise tactical plan. president dwight d. eisenhower observed, war plans never survive the first battle, nevertheless, war planning is essential to victory. in the same way the federal reserve cannot anticipate every nuance, publishing a lender of last resort policy will reduce future market uncertainty. monetary policy decision making. there is an additional step the federal reserve should take. the sound dollar act releaves fomc from three years -- to five years. if that is the case, perhaps we different fomc members. a flee-year lag will allow congress to review these fomc transcripts before a fed chairman is reconfirmed, which is absent from the delibrages today. in another reform, the

bank would restructure the loan and wouldn't have in the social jealousy. so now we have servicers in the middle for a significant amount of housing debt. servicers have no incentiveforeclosures which is what is happening now. because they charge more servicing fees, more late fees, and -- you tillly need to build new truck in these services to have them do mods, so we have a huge number of forks foreclosures in the pipeline. the banks have three million houses that are somewhere in the foreclosure process or that is real estate owned. they haven't put on the market, and there's another five million houses that are in default or in serious delinquency. we have a big overhang here. and again, the servicers having bad incentive, this program, the new federal-state settlement is not going to make any difference. it's too small. it's badly structured. didn't solve the problem which is inability to restructure debt. >> to our hero on "the atlantic" cover. why did we wait until the summer of 2011 to really go after the mortgage-backed security market and drive down mortgage rates? the fed should have targeted that market in 2009. we could have gotten a huge windfall of

incentive to do this. when i brought that up with greenspan and bernanke, i said, you keep interest rates low. it benefits the banks? what've you want to retire and take care of yourself and you do not want to go into the stock market. you are going to make 1%? they understood that, but some people get worried when you have to protect the big picture of the financial system, so they believed they are protecting a certain group of people, and in the process destroy the whole process of capitalism and free markets, and we need to hold their feet to the fire and say we understand this business a lot more than they think we do, and there will be a change of there always is with the monetary system that self- destruct. going to follow the constitution and say only sound money can be used. the only gold and silver is legal tender. [applause] under these conditions, whether it is the economic crisis where they say, if you do not bail was out of whole country is going to fall apart, all the bad debt gets dumped on the people, so the emergency action is usually making things much worse, and overseas as well, what about all

incentives in the financial system and return, a full-throated return to old-fashioned concerns about lending to small and medium-sized businesses and taking care of your deposits and a critically important function of the bankingystem is making payments rapidly, accurately, all over the world. that is a chopper commercial banks. it is not a job in my opinion or special institutions. hedge funds, people can speculate individually or whatever they want to do but they shouldn't be protected by the government. the difference is, those firms are going to be speculating and doing proprietary trading should not be vesting by the government when they get in trouble. that is their own responsibility. [applause] and most of it, take the hedge funds, they are largely in the past finance by partners, limited partners and finance big wooded -- not basically buy equities as they should be. >> let me ask you a question about the volcker rule. is a rather volcker rule you were hoping for a more robust version of this family ended up with. is that an accurate? >> i don't think the question of robustness. in fact all this fighting about response from from banks and so forth is that it is too robust and they are complaining that

stronger incentive to seek a political solution that they ask congress for the administration for support or pressure other agencies to save them from failure. third, repeated rescues encourage banks to take greater risks and increased leverage. this is a well-known moral hazard problem. each of these problems became manifest in 2008. to avoid these problems in the future, the sound dollar act requires the reserve to publish its lender of last resort policy. we do not expect a precise tactical plan, as president dwight d. eisenhower observed, plans never survive the first battle. were planning is essential to victory. in the same way, while the federal reserve cannot anticipate every nuance of the next financial crisis, publishing a lender of last resort policy will reduce future market uncertainties. next, i want to applaud chairman bernanke to increase transparency in decision making, but there is an additional step the federal reserve should take. the sound dollar act increases the release of transcripts from five years down to 3. some critics claim this acceleration would inhibit free discussion at fomc meetings. if that is the case, then perhaps we need different fomc members

incentive to seek a political solution. they ask congress or the administration for support or to pressure the federal reserve or other agencies to save them from failure. and, third, repeated rescues encourage banks to take greater risks and increase leverage. this is the well known moral hazard problem. each of these problems became manifest in 2008. to avoid these problems in the future, the sound dollar act requires the federal reserve to publish its lender of last resort policy. of course, we don't exact -- expect a precise tactical plan. as president dwight d. eisenhower observed, war plans never survive the first battle, nevertheless, war planning is essential to victory. in the same way while the federal reserve can't anticipate every nuance of the next financial crisis, publishing the lender of last resort policy will reduce future market uncertainty. next, i want to applaud chairman bernanke for his steps to increase transparency in monetary policy decision making, but there is an additional step the federal reserve should take. the sound dollar act speeds the release of transcripts of fomc meetings from five years to three years. some critics claim this acceleration would inhibit free d