john mack chairman of morgan stanley. >> we recognize our indust has mucho do to regain the trust of taxpayers, investor and public officials. >> holman: brian moyhan is c.e.o. of bank of america, wch is a newshour underwter. >> i wt all of you and the american pple to knothat i fully understand andppreciate thgravity of the crisis that we are now jt coming through. we are graful for the courage shown by goverent leaders to take bold and unprecedente action to preser the financial system. >> holman: b the executives alsoefended thr firms' bonus and compensation practices, which have drawn the i of president oba, members of congressand the public. commissioner heather murren, retired merrill lynch dictor, pressed goldn sachs chief exutive lloyd blankfein on the issue. goldmais expected to award billions of dollars in bones next week. >> how can you reconle these things, gin what's going on in the couny economically? and do you feel thatour compensaon adequately reflects yourirm's behaviors, what the standards ofhe times are? >> if you look at the hiory of our compensationthe compensat

what john mack brought up are things that have to be accounted for.seller of a security, the person needs the capital, and the investing public. those would have to be sorted through. in this process, most of the problem was, in my opinion, the cynicism of companies that held these positions, even though they knew they were toxic, and motivation. they did not know they were toxic. many tens of billions of dollars it was a failure of risk- management, i think, rather than a failure of incentive. >> you have 20 seconds. >> would not be originated entities be in a better position to know whether the securities that the possibilities of becoming toxic? if you had evaluated some of the cbo's, which do not have been in a better position to know about them failing? >> you should be in a good place. i cannot think of a bigger incentive than having that accumulating on your balance sheet. we had that incentive, and it did not work. >> some of you have talked about clawback provisions. and any of you utilize your clawback provisions? and i wonder whether each o

. >> chairman angelides, vice chairman thomas, distinguished commissioners, my name is john mack, i'm the chairman of morgan stanley. also served as morgan stanley's c.e.o. from june of 2005 to 2009 and i'm pleased to have the opportunity to address you today. the past two years have been unlike anything high seen in my 40 years in financial service. unprecedented, illinois liquidity wall street saw the fall of two franchises and the consolidation of others. we saw credit markets seized, competitive landscape remay have had and vast governmental intervention, in the financial sector. and the consequences are obviously spread far beyond wall street. millions of americans today are struggling to find work. they've lost homes, they've watched their retirements evaporate, their savings. i believe the financial crisis exposed fundamental flaws in our financial system. there's no doubt that we, as an industry, made mistakes. in retrospect, it's clear that many terms are too highly leveraged. they took on too much risk, and they didn't have sufficient resources to manage those risks effectiv

what john mack brought up are things that have to be accounted for. right thing between a seller of a security, the person needs the capital, and the investing public. those would have to be sorted through. in this process, most of the problem was, in my opinion, the cynicism of companies that held these positions, even though they knew they were toxic, and motivation. they did not know they were toxic. many tens of billions of dollars it was a failure of risk- management, i think, rather than a failure of incentive. >> you have 20 seconds. >> would not be originated entities be in a better position to know whether the securities that the possibilities of becoming toxic? if you had evaluated some of the cbo's, which do not have been in a better position to know about them failing? >> you should be in a good place. i cannot think of a bigger incentive than having that accumulating on your balance sheet. we had that incentive, and it did not work. >> some of you have talked about clawback provisions. and any of you utilize your clawback provisions? and

distinguish commissioners, my name is john mack. i am the chairman of morgan stanley.rgan stanley's to eat -- ceo from jean, 2005-2009. the past two years a ban on like anything i've seen in my 40 years of financial services -- the past two years havew3 been n like anything i've seen in my 40 years of financial services. we saw credit markets seas, the competitive landscapeç remodel. the consequences has spread far beyond wall street. millions of americans are struggling to find work. they have lost homes. they've watched their retirements revet -- evaporates and their savings. the financial crisis exposed fundamental flaws in our system. there is no doubt that we as an industry made a mistake. in retrospect, it is clear that many firms were too highly leveraged. they took on too much risk. they did not have sufficient resources to manage those risks and effectively. falthe financial crisis made clr that regulators did not have the tools or authority to protect the stability of the financial system as a whole. let me briefly what you through what happenedç for morgan

what john mack brought up are things that have to be accounted for.not just someone tried to find the right thing between a seller of a security, the person needs the capital, and the investing public. those would have to be sorted through. in this process, most of the problem was, in my opinion, the cynicism of companies that held these positions, even though they knew they were toxic, and motivation. they did not know they were toxic. many tens of billions of dollars it was a failure of risk- management, i think, rather than a failure of incentive. >> you have 20 seconds. >> would not be originated entities be in a better position to know whether the securities that the possibilities of becoming toxic? if you had evaluated some of the cbo's, which do not have been in a better position to know about them failing? >> you should be in a good place. i cannot think of a bigger incentive than having that accumulating on your balance sheet. we had that incentive, and it did not work. >> some of you have talked about clawback provisions. and any of you util

john jay mack paid himself $78.9 million and brian moynihan pocketted $10 million in 2007 when serving as president of global corporate investment banking at the bank of america. can you imagine what he'll make now? as they took america to the cleaners, the average worker in our country hasn't had a real wage increase in over a decade, much less a real increase in buying power. meanwhile, americans are being made to feel like they can't enter this debate because lots of fog is being generated by fancy terms that these bankers use like basis points or collateralized debt obligation or securityization. and i tell you what americans might not know what those words mean but they can recognize a lineup when they see one. the average person is coward by the world of finance and turned away in confusion and fear. they can't see a fast forward and they are worried. congress must provide the clarity of that path forward to not only hold these bampingers accountable but to get the administration to act to save people's homes and communities. the administration's current plan to fix the foreclosu