and he has people like paul volcker in attendance. i've met many central bankers and leaders of government there. and so, he's very much involved still in the future of the international monetary system. he's been consistent intellectually. and he's very interested in china these days. he sees china as coming on board, just as he supplied the intellectual groundwork for the creation of the euro, the european money. and he now sees we could have some kind of a linkage between the euro, the dollar and whatever china comes up with, some kind of a yuan that's convertible and a stable currency. >> explain something. this is a simple thing. i mean, it's not a simple explanation, i'm sure. but when the euro was created and -- was that 10 years ago? >> yes. >> there was a parity. one dollar for one euro. >> yes. >> and then it even dipped below, where it was in the 80's on the euro side, and now it's $1.50 the other way around. >> now, that tells you something, because the whole idea of floating rates was supposed to be a more stable system.

asking how we can ever get back to a stable, international monetary system and he has people like paul volcker in attendance and i have met many bankers and leaders of government there. he is involved, still, in the future of the monasteries -- the international monetary system. he is very interested in china these days. he supplied the intellectual groundwork for the creation of the euro. he now thinks we can have some kind of linkage between the euro, the dollar and with whatever china comes up with. >> explain something. when the euro was created, was that 10 years ago? >> yes. >> there was a parody, $1 for one year rule. then it even dipped below where it was in the '80s. now it is $1.50 the other way around. >> it was supposed to be a more stable system to ri. but because you have this huge area of the european union and this huge area of the united states, having variations up 50% in that relatively short time span, that shows you that the currency's swamped the impact of a tariff. when you have the swing of a currency of 50%, you have just made your competitors' products 50% more expens

jp morgan and t risk is even larger and i think absent some type of regulatory reform i think paul volcker's solution of bringing back and putting a wall between the commercial banking and the investment banking is one potential solution. i think there's a lot of very interesting things coming out of legislative proposal, senator dodd's proposal versus congressman frank's proposal. and we'll have to see how those play out but i think the failure to address this situation after we've now made that implicit guarantee of we're not going to let these too big to fail banks fail now that we made it explicit and affirmatively stated that they will not let these fail and failure to address this will create problems with moral hazard and systemic risk that will make where we were last year seem almost pedestrian compared to the risks that we're headed to. .. >> before the restructuring and the bankruptcy. the administration has stated that it is a low likelihood or very difficult for that money to be recovered. that is the tens of billions that i was referring to. i think that number, it's in our mos

balt -- paul volcker has reached the same conclusion and he finally -- even though he was in the tent, more recently he has been saying this is wrong. alan greenspan, who, you read his autobiography and is one great acclamation for ann rand and he has come out and said that too big to fail is dangerous. the governor of the bank of england has said that around the world everyone has forged this consensus that too big to fail is the single biggest great -- the single biggest threat to our banking system. we have socialized risk and privatized gain. you cannot do that. if you do that, you'll get distorted investment patterns and this willingness to tolerate the risk that we got and that enhances the destruction that we got. all of this is deeply problematic. we have also participated in what i call the regulatory sure raid. what is this? it is fun, a game lecture rates, where everyone in washington says, well, the ceos say, it is not our fault, we did not get it right. the regulators say they did not get it right because they did not have power and everybody runs to capitol hill and they

paul volcker among others have raised that issue. what you think about too big to fail? >> guest: i think we should go back to the current glass-steagall. we should separate the banks back out again. we shouldn't have gone from a crisis into a situation where there are a rare base control and more assets in the country. which goes back to what the fed was doing in terms of the merger so we have a situation where we need to separate them a separate the consumer deposit loans and assets from the speculative investment banking and trading because what we have right now not only are the banks bigger, jpmorgan used to be jpmorgan chase which had a lot of mergers to begin with but then having achieved the acquisition of bear stearns as a risky investment bank, washington mutual as consumer deposits other is a bigger animal floating on more risk and that risk is what we saw their profits last quarter. again, no secret about this. the only reason they made money was not because consumers are doing better, consumers continue to post losses because they continue to hurt. were they