i guess it is a historical anomaly why the fed supervises state chartered banks and mr. dugan supervises federally chartered banks -- when i first get to the banking committee in 1981, i didn't understand it. it just happened. let me ask mr. tarullo , most of the failed banks were not regulated by the supervisor or by ots. explain to me and this bair can answer as well. explain to me why the fdic and the fed should keep state- chartered supervision, particularly if we're giving the fed more responsibilities and other areas. if you think those functions should be kept apart, from the proposed national bank supervisor, why shouldn't at the very least merge fdic and the fed supervision of this state chartered bank? >> can i ask the panel to try to answer quickly? >> i will ask unanimous consent that each panelist be asked to answer the question in writing. i did not realize we had a second panel and i was the last one here. thank you. >> it looks like we're going to have to reschedule the second panel, so i'm anxious for you to respond to the senator's question. >> mr. chairman,

mr. dugan, i don't understand how, if you continue to give treasury the ability to solve the problem with taxpayer money, if they deem it an important thing to do, i don't understand how it creates any market discipline. it seems to me leaving that they got line in place defeats all market discipline. i don't understand how you can cause those to measure up or how we can craft something that actually worked and calls people like the senator of ohio posset constituents and mine, which i think are different in thinking about some things, i think it would agree that is wrong but he would propose to keep it in place and i don't understand that. >> i think there are ways have to limit it. presumptions to make it more difficult to exercise. i think there are measures to take up front so you don't get yourself in that position beard my only point, though, is this -- that position. my only point, though, it is this, if you need to take action to protect the financial stability of the system, i don't th

mr. dugan, i don't understand how, if you continue to give treasury the ability to solve the problem with taxpayer money, if they deem it an important thing to do, i don't understand how it creates any market discipline. it seems to me leaving that they got line in place defeats all market discipline. i don't understand how you can cause those to measure up or how we can craft something that actually worked and calls people like the senator of ohio posset constituents and mine, which i think are different in thinking about some things, i think it would agree that is wrong but he would propose to keep it in place and i don't understand that. >> i think there are ways have to limit it. presumptions to make it more difficult to exercise. i think there are measures to take up front so you don't get yourself in that position beard my only point, though, is this -- that position. my only point, though, it is this, if you need to take action to protect the financial stability of the system, i don't th

mr. dugani don't understand how, if you continue to give treasury the ability to solve the problem with taxpayer money, if they deem it an important thing to do, i don't understand how it creates any market discipline. it seems to me leaving that they got line in place defeats all market discipline. i don't understand how you can cause those to measure up or how we can craft something that actually worked and calls people like the senator of ohio posset constituents and mine, which i think are different in thinking about some things, i@@r government was involved. people can second-best some of the judgments, but i really do not think it is a good idea to completely forbid the ability to address system and situations and crises of we have to. -- systemic situations and crises. >> thank you all for your testimony. i gather from the panel that, in fact, there is a sense that the un may be what the administration is promoting, which is merging ots into the occ, there isn't a view that there should

i guess it is a historical anomaly why the fed supervises state chartered banks and mr. dugan supervises federally chartered banks -- when i first get to the banking committee in 1981, i didn't understand it. it just happened. let me ask mr. tarullo , most of the failed banks were not regulated by the supervisor or by ots. explain to me and this bair can answer as well. explain to me why the fdic and the fed should keep state- chartered supervision, particularly if we're giving the fed more responsibilities and other areas. if you think those functions should be kept apart, from the proposed national bank supervisor, why shouldn't at the very least merge fdic and the fed supervision of this state chartered bank? >> can i ask the panel to try to answer quickly? >> i will ask unanimous consent that each panelist be asked to answer the question in writing. i did not realize we had a second panel and i was the last one here. thank you. >> it looks like we're going to have to reschedule the second panel, so i'm anxious for you to respond to the senator's question. >> mr. chairman,

. >> you heard mr. dugantalk about this and asked about the tirade, lashing out in a closed door meeting last friday. another story out that president obama's choice for at least interim cyber security czar quit yesterday. another story out there right now that the white house is reviewing the future of white house counsel greg craig. his job could be in danger. what's going on here? are there cracks in the white house finally starting to show and what does it all mean, this tension in mr. obama's push for reform. joining us from reuters money is cnbc correspondent john harwood. are we making too much of this? they were not exactly supportive of the treasury department today. >> absolutely not. there is strong disagreements although i had to say that i got a laugh out of people when i asked about this tirade that geithner went on and barack obama is taking on big things that strong people disagree about. you definitely have seen them publicly as well as privately on financial regulation. some of the other stu

mr. dugani don't understand how, if you continue to give treasury the ability to solve the problem with taxpayer money, if they deem it an important thing to do, i don't understand how it creates any market discipline. it seems to me leaving that they got line in place defeats all market discipline. i don't understand how you can cause those to measure up or how we can craft something that actually worked and calls people like the senator of ohio posset constituents and mine, which i think are different in thinking about some things, i think it would agree that is wrong but he would propose to keep it in place and i don't understand that. >> i think there are ways have to limit it. presumptions to make it more difficult to exercise. i think there are measures to take up front so you don't get yourself in that position beard my only point, though, is this -- that position. my only point, though, it is this, if you need to take action to protect the financial stability of the system, i don't thin

i guess it is a historical anomaly why the fed supervises state chartered banks and mr. dugan supervises federally chartered banks -- when i first get to the banking committee in 1981, i didn't understand it. it just happened. let me ask mr. tarullo , most of the failed banks were not regulated by the supervisor or by ots. explain to me and this bair can answer as well. explain to me why the fdic and the fed should keep state- chartered supervision, particularly if we're giving the fed more responsibilities and other areas. if you think those functions should be kept apart, from the proposed national bank supervisor, why shouldn't at the very least merge fdic and the fed supervision of this state chartered bank? >> can i ask the panel to try to answer quickly? >> i will ask unanimous consent that each panelist be asked to answer the question in writing. i did not realize we had a second panel and i was the last one here. thank you. >> it looks like we're going to have to reschedule the second panel, so i'm anxious for you to respond to the senator's question. >> mr. chairman,

mr. dugan don't understand how, if you continue to give treasury the ability to solve the problem with taxpayer money, if they deem it an important thing to do, i don't understand how it creates any market discipline. it seems to me leaving that they got line in place defeats all market discipline. i don't understand how you can cause those to measure up or how we can craft something that actually worked and calls people like the senator of ohio posset constituents and mine, which i think are different in thinking about some things, i think it would agree that is wrong but he would propose to keep it in place and i don't understand that. >> i think there are ways have to limit it. presumptions to make it more difficult to exercise. i think there are measures to take up front so you don't get yourself in that position beard my only point, though, is this -- that position. my only point, though, it is this, if you need to take action to protect the financial stability of the system, i don't think