. >> corporate funding is also provided by prudential financial. additional funding for "washington week" is provided by the annenberg foundation, the corporation for public broadcasting and from contributions to your pbs station from viewers like you. thank you. once again, live from washington, moderator gwen ifill. gwen: good evening. the unemployment rate kicked up again last month from nine to 9 .1% and ago -- although 54 thundershowers -- 54 thousands were added to the roles, that was less than expected. the president pointed to the auto industry rescue. >> today all three automakers are turning a profit. that hasn't happened since 2004. today all three american automakers are gaining market share. that hasn't happened since 1995, and today i'm proud to announce the government has been completely repaid for the investments we made under my watch by chrysler. gwen: but republicans aren't buying that. >> you talk to job creators around the country like we have, they'll tell you that the overtaxing, overregulating and overspending that's going o

corporate funding is also provided by prudential financial. additional funding for "washington week" is provided by the annenberg foundation, the corporation for public broadcasting, and by contributions to your pbs station from viewers like you. thank you.

. >> corporate funding is also provided by prudential financial. additional funding for "washington week" is provided by the annenberg foundation, the corporation for public broadcasting and by contributions to your pbs station from viewers like you. thank you. once again, live from washington, moderator gwen ifill. gwen: good evening. the 2012 presidential campaign finally began to look like one this week, complete with web videos, minor gaffes and full-fledged candidates debate. it ended pretty much the way it began with mitt romney looking like the man to beat but it also became clear he has even more reasons to look over his shoulder. so where does romney the frontrunner, dan, stand tonight? >> as you say, gwen, there's no more talk about a slow starting republican race for the nomination. gwen: mostly because we've been talking about it like -- >> we've talked about it for so long. but it happening. it's real. and informs a week that proved -- and this was a week that proved it. if you're mitt romney or romney's advisors you get to the end of

financial challenges ahead. this rock has never stood still. and that's one thing that will never change. prudential. corporate funding is also provided by boeing. additional funding is provided by the annenberg foundation, the corporation for public broadcasting and by contributions to pbs stations from viewers like you. thank you. once again, live from washington, moderator gwen ifill. gwen: good evening. nearly 10 years after the 9-11 attacks propelled america into war in afghanistan, president obama declared this week that it is time to leave. but not right away. >> our job is not finished. ifou looked at the schedule that i set forth, we're only bringing out 10,000 by the end of this year. we're going to bring out all 33,000 that we surged by next summer. but there's still some fighting to be done. gwen: there was not complete agreement on the pace of the pullout or on whether afghan security forces will be fully ready to step up to the plate by 2014 deadline. but the president made the case that the mission at least must change. so how hard will that be, martha? >> well, when i looked back at w

funding and off-balance sheet exposures exceeding 10% of the liabilities of the financial system as a whole. these enhanced prudential measures for major financial firms are likely to reduce risk in the financial system and to reduce too big to fail distortions. but for dodd-frank, no regulator or supervise had legal authority or the responsibility to look across the full sweep of the financial system and to take action where there is a threat. today while the regulatory infrastructure is undoubtedly far from ideal with too many divided responsibilities, the financial stability oversight council is accountable to identify these threats to financial stability and to address them. the fsoc will have access to information across the financial services marketplace and a new office of financial research is empowered to collect data from any financial firm and to develop and enforce standardization for such data collection. before dodd-frank the derivatives market group grew up in the shadows with little oversight. credit derivatives concentrated risk. synthetic securitization with embedded derivatives magnified failures i

that is financial end-users exchange margin with her counterparties. the prudential regulator's proposed capital i margin requirements for swap dealers and for major swap participants do not require those entities to pose margins to their non-dealer counterparts. this will undermine market discipline. the absence of this two-way marching discipline and regime is the central lesson to aig's billiar. we are also concerned the cftc's proposed segregation rules made repair arrangements that permit netting across customers cleared and uncleared positions. we believe this will increase systemic and settlement risk and will restrict these use of capital. nfa remains concerned about the efficacy of physician limits. we are particularly concerned about the workability of their cftc proposed rules which depart from its long-standing policy of disaggregation of independently controlled accounts. inappropriately formulated limits would impair the ability of markets to serve their essential risk allocation function which would increase the cost of managing risk and harm actors an

prudential regulator. for swaps with a non-financial nonuser party, the proposed rule does not specify a minimum requirement. rather in keeping with the statute, it establishes a risk-based rule to allow a banking organization that is is a dealer or major participant to establish an exposure threshold which the end user would not have to post margin. the proposed rule would not impose caps on the thresholds for end counterparties. in contrast with swaps with other counterparties, the proposal would cap the allowable thresholds. thank you, and i look forward to answering your questions. >> thank you very much. again, we will use a seven minute question period for the first panel. chairman ginsler, i want to talk for a moment about pensions and business conduct standards. we continue to hear a lot of concern from the pension committee that the proposed business conduct rules conflict with the department of labors proposed judiciary rules. as a result of this, there's a lot of concern that banks may not enter into swaps with pensions in part because of the concerns about legal risk. it's important that we don'

prudential regulation. but the second narratives suggests that weaknesses in the financial sector during 2007-2008 contributedto uncertainty about the ability of issuers in the short-term market to make good on an obligation. investors and money market funds particularly the growing number of institutional investors of money market funds were looking through portfolios and lost confidence. beginning of course with lehman brothers when it collapsed but thereafter aig and a number of other major players, commercial paper issuers who appeared to be in play at the time. they simply lost confidence in the short-term market. this narratives suggests if they weren't money market funds, folks have been holding the commercial paper where the obligation of the underlying issuers they would have rolled over into have had the same crisis. the first narrative best articulate i think by paul volcker, holds money market funds as the culprit part of the shadow banking system. that's what that term is used. the other narrative articulated by paul stevens, president of the ici holds money market as victims. beginning with the

financial engineering. well, that's not just going to happen and then also we had this so-called prudential regulation to keep the banks from doing crazy things and so they had these regulations that said the safer the assets you're holding, the less you have to keep in reserve as capital. so the way it worked was for every $100 you got in standard loans you're going to keep $10 in capital. for every $100 you have in mortgages, you have to keep only $5 in capital. and for every $100 you have in aaa-rated mortgage-backed securities you only get to keep $2 in capital. so take a wild guess at which asset class everybody and his uncle fled into, right. everybody goes into this. so then the thing collapses and now it's all the worse because this type of regulatory apparatus almost mandates herd behavior. instead of a normal situation where people would have been diversified into a variety of asset classes, everybody is in this. and then we're told, okay, but didn't we have poor management of major financial institutions? well, no doubt about that, that's why you need to have failure. you have to allow them to fail

as a result of these post financial crisis changes, lehman brothers would have been subject to the same prudential superfission as jp morgan. aig would have been required to register as a major swap participant reporting positions and subject itself to federal supervision. countrywide and washington mutual would have been subject in the same write standards as national bank and would have been significantly limited in making subprime lopes or required to retain risks of the mortgages, and the charming would have been gathering data. these are important changes. i appreciate the acknowledgement of things in the bill, and as he notes, would have substantially lessened the likelihood of those institutions that were major failures, and he notes apply some of the restrictions, all the restrictions in the bank system to the unregulators where the shadow bank system comes in. he also on page five talks about what we did in terms of resolution of large institutions which i continue to believe should be calls dissolutions, a euphemism too far. what he says in summary of listing these is the united states i

as result of these financial crisis changes lehman brothers would've been subject to the same federal reserve capital and prudential supervision as jpmorgan chase, including extremely high capital charges for collateralized debt obligations and other exotic securities. a.i.d. ig would've been required to raged as a major swapper dissident and subject itself to federal supervision. countrified washington mutual would subject to the same underlying standard as national banks and would've been either significantly limited in making subprime loans are required to retain the risk of these mortgages. the fsoc would have been gathering data. these are important changes. i appreciate this acknowledgment. those are all things that are in this bill, and he knows would have substantially lessens the likelihood of those institutions that were major failures. and as he notes, apply some of the restrictions, all of the restrictions to the bank system to the unregulated. this is where the shadow banks system came in. he also then on page five talked about what we did in terms of resolution of large institutions, which i continue