mr. tarullo? >> yeah. >> mr. walsh, on the driving of business and jobs offshore, give me your general assessment of the arguments that are being made. >> well, as governor tarullo alluded to, i mean, there's a question if certain activities are prohibited in banks, the question is where will that activity to? some of it may go to unrated entities in the united states hedge funds and others may take up that business. some of it may go to foreign firms, in the case of activities that are limited. it's not unusual to have prohibitions, limitations, capital charges and other features of the regulatory framework. so we are creating some such limitations and that business will presumably migrate elsewhere. >> but i assume the extent to which the migration will take place will depend on the extent to which you all get this rule right or adjusted, or will it? >> well, it will to the extent that there are certain things that are clearly prohibited. that activity will no longer be at banks. it will move elsewhere. >> all r

mr. tarullo's statements this morning. it was the intent of those institutions to buy and hold securities hoping to benefit from short-term price movements that led them into what were regarded as very highly rated investments, aaa securities were, in fact, where they suffered their most damaging losses. mr. tarullo said we shouldn't be fighting the last war and he's exactly right. the volcker rule as written, and as attempted now to be implemented, is precisely on a forward-looking basis to prevent the big banks from again putting their hand into the pocket of the american taxpayer. now, my third point is i understand that the industry is concerned about this, and i've read carefully the documents that was sponsored and put out through various organizations and individuals. and i'm deeply skeptical for the reasons expressed in my written testimony of the estimates of the so-called liquidity costs or reduction in liquidity. i think the methodology that's used, for example, in the oliver wyman report is deeply flawed. i've