risk mitigation is the watchword, not risk elimination. there is a stain in the fbi courtyard. -- there is a saying in the fbi courtyard -- as the look of the 10th anniversary of 9/11, it would be the most effective tool in the fight against terrorism is cooperation worldwide, thank you. [applause] >> thank you mr. pistol. wonderful introductory, cyprus said way to get into questions for our panel. -- wonderful introduction and a wonderful way to get into questions for our panel. there is no specific need for one or all or any to answer. all these questions address issues which we certainly will -- all have in common. since the christmas day attack on northwest airlines flight 253, it has become more clear there's a global trend toward more risk debased approach to passenger screening. i would like to start by asking each of you about the evolving threats of aviation security and how we best manage that ever- changing threat and what is needed from your perspectives. perspective,a's leveraging information and data to really focus on the ap

credit risks. the loosening of loan underwriting standards and the lack of independence of political goals. a fully functioning housing system should share the goals of the administration option one. reduce small hazard and drastically reduce taxpayer exposure -- the state of concern is that the mortgage credit risk will be transferred. i disagree with this conclusion. the credit risk providers can affect government guarantor's. g these's provide regionthe gse's are in a factor. this guarantee is a classic example of a credit default swap. a mortgage company pays them a fee for a timely payment of principal and interest. a difference between this and an actual cds is the latter trades in an actual market with actual traded discovery. the amount of credit risk of mortgages that have a diaz the guarantee is enormous. i think there is ample room for a private market to -- this has is enormous. with such a mechanism to price and a trade credit risk, thetba investor will be protected. -- tba investor wi

the risk has to be born somehow. it is born by equity holders of lending institutions to the extent is isn't shifted to government fdic or bondholders and depositors. given the high social cost of financial obstruction. recent empirical research provided considerable support for the views expressed here. even if there were some increases in lending costs as a result of increased equity requirements those costs have to be offset against the benefits. there are very large societal costs for bank failures as i said before and these can be substantially reduced by higher equity requirements. some have argued that even if it makes sense in the long run to increase capital requirements doing so in the short run can be costly especially at a time such as this when the economy is fragile in the banking system already is weak. this is an argument for an paste increasing capital requirements and one which would not let dividends or share buybacks or extravagant bonus pools until the desired capital ratios or reach. at the same

companies can risk bankruptcy via the risk of the society.ding to kansas city president, the 20 banks that are highly leveraged than the community bank competitors, if i can use the word "competitors" in this case. it's assumed the government will step in to prevent them from failing. as a result, the largest banks make bigger profits than those who do not enjoy government subsidies. they are least able to weather economic down tuns because of that leverage, and not surprisingly, the largest banks are before. prior to 2006, they held 68% of total bank assets. by 2010, they held 77% of total banking assets. were there another economic calamity, bailing the banks out again imposes an even higher cost on taxpayers. this is not capitalism in any sense of the word. to prevent the need of bailouts is simple is requiring banks to hold reserves. they require banks to fund themselves using their own money instead of other people's moneys. last tuesday the ranking member of the full committee said one of the lessons of the financial crisis should be th

defining systemic risk provides the metric for tracking systemic risk over time. that is the advantage of it. it would make regulatory authorities operationly accountable for the supervisory performance. studies using this approach show the regulators could attract the growing correlationor risks and exposures as an early warning system for the current crisis. expanding the format to include estimates of the potential vary billity of their returns. and should improve the systemic risk and regulatory and supervisory performance. accounting standards for recognizing losses make evidence of insolvency under current rules dangerously slow to surface. efficient safety rate management requires more sophisticated framework than current methods of banking or accounting. to protect taxpayers and it should not focus on methods of tangible capital. it should include the intangible value of an institution's claim on taxpayer institution's claim on taxpayer resources.

would you be at risk? sometimes we attribute at risk to perform characteristics. sometimes the environment. we adjust. growing up. i needed to leave the environment. i am talking straight up. to survive, i grew up on the streets. the word i did at chad. the number one book that's popular, what book do you think it is? i hear the bible. beautiful. what is it? i have heard that one too. you know what it is? it's called the art of seduction. the first section is called choose a victim. what has happened is this. as an educator. someone who works with gang units. we created oxymorons. we created good people who i think it's good to be bad. we teach them them that passing the standard is success. there is a difference. 3 words they taught me. do you think what 3 words. this is from their world, at riskness. you know what the 3 most powerful words are? i tend to think in love, faith. you know what they said? hate, jealousy and revenge. i am listening to that. i said, we need to go beyond that. what do you think strategically. i still remember. i went to a debut taunt ba

the risk has to be born somehow. it's borne by equity holders to lending institutions to the extend is not shifted to the government, fdic, bondholders or depositers. it is better to give it to the large equity base. recent impurecal research has provide views such as those expressed here. if there is lending costs as a result of increased requirements those costs have to be offset against the benefits. there are very large societal cost for bank failures, as i said before, and these can be substantially reduced by higher equity requirements. even if it makes sense in the long so to increase risk requirements, doing so in the short term would be risky. at most this is an argument for a pace increase in capital requirements and one which would not allow any dividends or share buybacks until the desired capital ratios are reached. one should at the same time be aware of the large risks, especially under the current circumstances of delay. it is precisely because the economy is fragile, banks of inadequate capital and t

, and it would be no risk whatsoever. this is a way of mitigating the risk by phasing in period we are currently in negotiations with shell energy. that is for energy supply and schedule coordinator services. we are also talking with noble america's about the customer care side of things, account management. again, this is a change from where policies were in 2007. we hope to have a single entity that would take on all of the supplies and performances we would need with zero risk to the city, before issuing our rfp, we got an ordinance that related to changing that. moving on briskly to the areas of risk allocation and the city's liability, one of the things we are getting by working with shell is we are getting to work with a credit or the entity -- a credit worthy entity. they are committing to a price, and we think that that commitment is a very firm one. on the flip side, the negotiations have raised the need for the power enterprise to have the appropriations to get the program up and started, and there is a few. one

this is a key risk element for us. i am inclined without further discussion to look at something which is more conservative -- a more conservative rollout plan that would cover that kind of risk. >> it is important to realize that some things can be mitigated. that is what we are doing with the program. >> 85% -- what does that mean? >> the firmed and shaped are resources were you take a intermittent resource, these are regulatorily definied. the wind power works when it is windy and the sun power works when the sun is out. when you are trying to get a block to try and cover when people are using their appliances and such -- >> how do we anticipate forecasting? >> we have historic data and we are forecasting the load. since we have so many -- is accurate. >> 30%, 40%, 50%? >> it will be in the 90's. >> commissioner torres: in the 90's? i did not think we have the technology for that. >> forecasting how much energy is needed at certain times of day? >> commissioner torres: yes. >> we have been given information and it v

took some wild risks when i was young. but i was still taking a risk with my cholesterol. anyone with high cholesterol may be at increased risk of heart attack. diet and exercise weren't enough for me. i stopped kidding myself. i've been eating healthier, exercising more, and now i'm also taking lipitor. if you've been kidding yourself about high cholesterol, stop. along with diet, lipitor has been shown to lower bad cholesterol 39 to 60 percent. lipitor is fda approved to reduce the risk of heart attack and stroke in patients who have heart disease or risk factors for heart disease. [ female announcer ] lipitor is not for everyone, including people with liver problems and women who are nursing, pregnant or may become pregnant. you need simple blood tests to check for liver problems. tell your doctor if you are taking other medications or if you have any muscle pain or weakness. this may be a sign of a rare but serious side effect. lets go... haha. if you have high cholesterol, you may be at increased risk of heart attack and stroke. don't kid yourself. talk to your doctor

liquidity risks versus sovereignty risks. when there is a lower equity base, there is a higher probability of a bankruptcy in or problem, and therefore a higher likelihood that no one will give money to the banks. that is the cause of the liquidity crisis. if the banks were solvent, there would be no liquidity problem. there are two issues that are intertwined. the risk of a liquidity crisis would shrink lending and undermines the economy and is related to capital. on the issue a competitive disadvantage, of what to agree with what is said. there are two other points. the framework regulation -- if we have financial institutions coming into the united states, they ought to be incorporated into have a subsidiary, not a branch. the basic principle means that the united states is a large market. banks will want to operate in the united states. we can set regulations to protect the american economy. protect our job, and our own society. the issue, can our banks compete abroad. i am not worried about that. if it were the case, in

>> runaway from risk? >> neil: what is risk? >> everything!ow my mattress is paying more money than the bank of -- >> neil: what happens to gold? >> i think if we see problems in europe, if it look like that situation is under control you could see gold down five to ten dollars maybe more. oil prices maybe down five to ten dollars on the opening. stocks may be dramatically lower. 100 points lower on the dow. if it looks like europe steps in to save the debt crisis over there, the market could be relatively calm. i'm not betting on that now. i'm going to prepare for the worst and hoping for the best. >> neil: charles? >> down on the dow, it will be a -- [ talking over each other ] >> in a certain way, in an odd way, this is the wakeup call perhaps. it has been in the making for a long time. we through this was going to happen. no one thought it was going to happen friday. >> here's what we don't know how do the people of the country react in terms of spending? how to -- how do investors act? the best performing group all year long term governme

the risk and prioritizing your risk. as an example if you think about the united states and some of the natural disasters we had this year, we had record-setting tornadoes across the country, snowstorms in the recent past, wildfires we have to respond to and the hurricane season is just starting to kick up as we have seen. it is important from a risk-management perspective to make decisions in 50% of the u.s. population near the coast line, how to manage your portfolio and spread that risk. gis helps do that. again, way to do that -- take a look, we saw some slides of neighborhoods or maps. to bring it closer to this room here, traditional underwriter risk manager wood group this entire room as a risk. a homogeneous group and would be yes or no, same price. with more precision analysis, information and technology i can charge individual price for everybody in this room and make a decision for everybody in this room. it might be yes or maybe and it might be no. maybe might be of i can ensure you at this price if i'm willi

for that credit risk? i believe there is. but i think we're talking about a very large transition by a mortgage market that's by rates and investors who cares about rates and an investor who cares about credit and that transition can take, you know, to do it in an orderly fashion we're talking about 10 or 15 years. this is not an easy scenario. >> mr. valkenburg and then -- >> and anytime you subsidize anything you get more from it and when you're subsidizing the housing sector in many ways, you know, along the food chain and particularly the guarantee is this one area? we would probably get a little more access to consumer credit than we would otherwise. but it's hard to quantify these things without any real price discovery about what private institutions would have at that risk. >> and part of that transition is in a sense that price recovery process? >> yeah, if we could develop credit markets where we could transfer that to the private financial institutions we could begin to understand what those cos

today we have pradaxa to reduce the risk of a stroke cacaed by a clot.n a clinical trial, pradaxa 150 mg reduced stroke risk 35% more than warfarin. and with pradaxa, there's no need for those regulalablood tests. pradaxa is progress. pradaxa can cause serious, sometimes fatal, bleeding. don't take pradaxa if you have abnormal bleeding, and seek immediate medical care for unexpected signs of bleeding, like unusual brbrsing. pradaxa may increase your bleeding risk if you're 75 or older, have kidney problems or a bleeding condition, like stomach ulcers. or if you take aspirin products, nsaids, or blood thinners. tell your doctor about all medicines you take, any planned medical or dental procedures, and don't stop taking pradaxa without your doctor's approval, as stopping may increase your stroke risk. other side effects include indigestion, stomach pain, upset, or burning. if you have afib not caused by a heart valve problem, ask your doctor if pradaxa can reduce your risk of a stroke. ) and somebody constantly ownloading musicals ontitun. "rent woman: i

overall, we have lowered risk. a lot of our men them tum factors brokdown, so, we reduced risk overall. however, within our exbyty exposure, we like u.s. large cap growth. we like dividend payers. we like companies that are buying back their shares. you know, given high quality companies right now, any of them can issue debt and intermediate term debt at 1% or 2%. many companies have earnings yields in excess of 7% to 10%. so, it would seem to me any treasurer with the where with all to borrow should be buying back their shares here. and we'd like to buy companies that are doing that. on the other side, we still like commodities. notwithstanding this economic downturn we're seeing. the precious metals are doing well. and the grains, corn, wheat and the like, soybeans are doing remarkab remarkably well. it's holding up even in the face of these downturns. >> jack, thank you so much. >> thank you. >> see you soon. jack ablin joining us. there's been so much focus on the european banks in the last several weeks and th

i think the risk is even though we've had a fairly quiet couple of days the risk is we could carry on going lower in the weeks ahead it's very similar to sort of moves we're seeing in markets to what was happening three years ago when we had the banking crisis and then we had plenty of volatility big slides go quiet for a bit and then just move lower galloping we have seen quite a big change in sentiment towards stock markets over the last few weeks when it comes to economics so you actually expecting a second dip in the recession. maybe not necessarily for the recession but from a markets point of view definitely i think you know investors are very worried about the situation and of course we have the u.s. that went down to the wire getting that debt ceiling raised we had the downgrade by the u.s. last friday we've still got all these problems in continental europe with it's really inspiring growth isn't very good there's definitely a risk of a double dip recession but i think the immediate risk is for stock markets to slide a bit. all the optics in the market we've been seeing is th

the related mainly to risk and what the risk was to the city, so there are some specific questions that the sfpuc is bringing back to them. hopefully, they will be able to meet in august. if that does not occur, we might want to consider meeting with them in a joint meeting in september. the only thing i have been at is if you want to fall -- hear the full presentation, mike is perfectly willing to give it to you. it could be that because the puc did not approve the term sheet, we may be continue each day until such time as they do approve it. given that, i would like to hear your comments or questions. supervisor campos: colleagues, if i may, i just wanted to provide some context in terms of the process or the timeline i was envisioning with respect to this item. one of the things i want to make clear is while we want to do the process right, it also is important for us to do it expeditiously. the hope and the intention that i had was that by the time this item came to us today, that the term sheet would have been improved -- approved by the san francisco puc. i appreciate the presenta

risk management and risk mitigation are the watch words, not risk elimination. and to conclude i would note from my last job of almost 27 years at the fbi there's a saying in the fbi headquarters courtyard of pennsylvania avenue that i'll paraphrase is cooperation of the american people. i would say as we look at the tenth he anniversary of 9/11 to update that it would be the most effective tool in the fight against terrorism is cooperation of freedom-loving people worldwide. thank you. [applause] >> thank you, mr. pistole. one introductory comments and a perfect segue to get into the questions of our panel here. i could not think of a better way to launch into the rest of the forum today. so what i'm going to do i'm just going to pose the questions to the group here. there's no specific need for one or all or any to answer because i think all these questions addressed issues which we certainly all have in common from all the stakeholders up here on the podium with me. so since the christmas day attack on northwest airlines flight 253, it has become more clear t

but risk makes capital markets move. >> susie: meanwhile, the housing market is an important risk to the u.s. economic recovery. we search for solutions to the housing crisis as we continue our series, "how to fix the economy." it's "nightly business report" for tuesday, august 16. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by: this program is made possible by contributions to your pbs station from viewers like you. thank you. >> tom: good evening, and thanks for joining us. u.s. stocks ended a three-day rally today as investors were disappointed by proposals to fix europe's debt problems. the hope was that dramatic new ideas would come from the meeting today between german chancellor angela merkel and french president nicholas sarkozy. >> susie: you know, tom, there was a big build up of expectations for the meeting, and then a big letdown. sarkozy and merkel pledged to defend the euro and announced plans to coordinate economic policy of 17 euro-zone countries. they proposed a new council to act as an "economic gove

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