[laughter] sheila bair is chairman of the fdic. mary shapiro, elizabeth warren it is great to have you here. i am honored to share the stage with you. i thought i would start by having you give us a sense of your day today. our first goal today is to talk about your role and where you are today. we would like to get a lot of feedback from everyone in the audience, on the twister, and in e-mail t-mailwiller -- on twitter and in e-mail. elisabeth, will you start. what is your day to day like? >> i am located still in the academic world. my goals consist of things -- my days consist of things like teaching, office hours and the like. in addition to that, i serve on the congressional oversight panel. we turn out a report every single month. it is like doing a term paper every 30 days, on some aspect of the t.a.r.p. program, how deeply -- how the money is being spent, and if we are accomplishing our goals. i also continue to talk about the economics of a middle-class families, which i have been doing for a long time now. i advocate for

there's no question that this is something sheila bair has proposed. the fdic wants to see a prefund. the treasury would like to see a postfund. they'd like to see it come after the fact. i want to digress for a second and say that i hope the reason that treasury wants a post-fund is not because in lieu of having a pre-fund of $50 billion from these large institutions, they want to see a bank tax. as a matter of fact, i'm going to be surprised if, after republicans argue against a pre-fund and it's changed and the administration comes back and chairman dodd comes back and we end up with post-funding, both of which do the same thing, i might add, and both of them work, it's going to be interesting to me to see if whether that argument basically has led to treasury then having the ability to come back and -- and do a bank tax. i think at the end of the day, that's something that they've

geithner, mary shapiro, sheila bair, and others. >> good morning.my name is rosie rios , treasurer of the united states. thank you for joining us today for what will truly be an historic event, not just for treasury and the administration, but for generations of americans who will be -- will be inspired by today's activities. i would like to introduce the treasury secretary, timothy p. geithner. [applause] >> good morning. welcome to treasury. thank you for coming. rosie rios is treasurer of the united states. it is a cool title. it is much better than being secretary of the treasury, let me tell you that. i want to upset thank her for taking -- i want to thank her for bringing this remarkable group of women together. i read an article last week that asked the question of, "what if women ran on wall street?" i thought that was an excellent question, but kind of a local bar. -- a low bar. [laughter] today, three of the past four secretaries of state have and women. nancy pelosi is a strong female secretary -- the female speaker of the house. still, o

and i think sheila bair, the chairman of the fdic told me that she is expecting a bill next week. and we will likely see this legislation come to fore by the summertime. so we'll see about that. professor edmund phelps, good to have you on the program. so appreciate you joining us. >>> up next on the "wall street journal report" one of the world's most recognizable entrepreneurs tells me his plan for going green. virgin founder sir richard branson is with us. he has environmental business to attend to. >>> then what your dishwasher says about the economy. how today's homeowners feel at home in a still-weakened market. >>> as we take a break, take a look at how the stock market ended the week. o's been saving y and who doesn't want value for their dollar? been true since the day i made my first dollar. where is that dollar? i got it out to show you... uhh... was it rather old and wrinkly? yeah, you saw it? umm fancy a crisp? geico. fifteen minutes could save you fifteen percent or more on car insurance. >>> this week marked the 40th anniversary of earth day. since climate change ha

is sheila bair? my father said, no. she has gone to the hospital. she is in labor. >> i was expecting my first child at the time. there was this pause. the senator said, when will she be back? [laughter] i had all three of my children -- i had them when i worked for senator dole. they happened to be born during congressional recesses. senator dole never understood why our staff ever had children when we were in session. he always said, she led them during our recess. -- sheila had them during our recess. during the budget impasse in the clinton administration, the government had been shut down for a period of time, and we have been going back and forth with the house in terms of continuing resolutions in an attempt to get the government back operating and has a sufficient amount of money to allow the government to operate. the house was determined to force the issue. new gingrich, who was speaker at the time, and armey and others, were opposed to doing anything that would allow the government to go forward and wanted to force the issue. -- and dick

we had hank, we had been bernanke tim geithner and sheila bair, the head of the fdic. i have a lot of people in finance, and a lot of people in business and a lot of people the government, and i can't think of for people that would have done a better job of getting us through that. now it's kind of fashionable now to look back and pick out one of little aspect or another of what was happening, and our country's financial system froze up during that period. some of you in this room or at a party i was at in september of 2008 when the talk was are the money market fund safe? now, when you have 3.5 or more petroleum funds held by 30 million people, who on sunday and i are worrying about whether they can get their money, that money was half of all of the deposits held by the u.s. banks the time. you have a panic. you had commercial paper frees up an entirely and some of the biggest companies in the united states and some of them are described in this book they worry about whether they were going to meet their payroll in a short period of time to meet you at the sixth large

sheila bair chairman of the fdic. welcome. pleasure to have you in the studio. the president making a big push for it. critics say that compromises in that bill will make it difficult to execute in an emergency. it makes it ownerous. supporters of the bill say it ups capital requirements and increases transparency, but there have been some compromises that have people worried, which is it? >> well, we think overall it's a good bill. we think one area that we've been particularly focused on is the title two of the bill, which provides for an orderly way for the government to take over a large financial institution, if it is failing. and unwind it and break it up and sell it off in an orderly way without taxpayers having to take any exposure and imposing it on shareholders. this is a process the fdic long used for banks and it works well and it is a process the smaller institutions have to deal with and we think larger institutions should have to deal with the same type of robust process that imposes the losses on the shareholders and creditors. with this new reso

. >> so you wrote in '08 to sheila bair at fdic, exhibit 66 -- >> 66? yeah. >> dear sheila, you really know how to stir up a colleague's vacation. i do not under any circumstance want to discuss this on friday's conference call. i want to have a one-on-one meeting with ben bernanke prior to any discussion. i want to have a meeting be with paulson. i should not have to remind you the fdic has no role until the primary regulator, ie, the ots rules on solvency and pfr utilizes pca. so no role for fdic. now, this is a bank. if this bank goes under, their insurance fund is wiped out. they have about one-third of the money in their bank m the insurance fund that they would have to lay out if this bank goes under. but you're telling her, head of fdic, i should not have to remind you that fdic has no role -- which is not accurate, they have a back-up role, surely, to protect their insurance fund. you then, scott writes to you that he has read the attached letter from the fdic regarding supervision of wamu and once again i'm disappointed the fdic has confused its

discussion whether or not to rescue them and to their credit the administration hoped i think by sheila bair the fdic decided to step back and let them sail. you cannot find the consequences of that failure today. they were bluffing. goldman sachs 800 billion is not bluffing. if you let them fail you have a problem. that is how the administration sees it and i agree. people say simon we have the resolution of 40 in the dodd bill supporters a qtr geithner. it will allow us to manage the contraction of the liquidation of mega banks when they get in trouble in the future with all due respect to people who work long and hard on capitol hill and i do have respect for them the resolution authority is a unicorn. a unicorp is a magical beast worth recuperative power. it's also a myth. check with your children if you don't believe me. if you call for a unicorn it doesn't come. the resolution authority cannot work because the resolution authority passed by congress would be a u.s. resolution of 40 would not apply to the cross border operation. citigroup does business in 100 countries. lehman brothers

the administration whether to rescue them and to their credit the administration hoped i think by sheila bair the fdic had it to the code stepped back and let them field. you cannot find the consequences of that in the data. they are bluffing. goldman sachs said 800 billion is not bluffing. if you let them fail would have a serious problem on their hands. at

just ask sheila bair, the chairperson of the federal deposit insurance corporation, the organization mes in and puts an end to failing banks. ms. bair is also a republican, former legal advisor to former majority leader bob dole, an appointee of the previous administration, the bush administration. she told -- sheila bair told the "american banker" in an article published this morning, mr. president, "the status quo is bailouts. the status quo is bailouts. that's what we have now," she says. "if you don't do anything," she says, "you're going to keep having bailouts." end of quote. "nothinnothing is what we will e even members deny having this bill come you on the floor of th."it makes bailouts" -- this l that we'll have before this body -- "it makes bailouts impossible, and it should," she says. "we worked really hard to squeeze bailout language out of this bill. construct is that you can't bail out an individual institution, you just can't do it." end of quote. mrs. boxer: will the senator yield for a question? mr. dodd: i will be happy to yield. mrs. boxer: i want 10 say thank you

she told sheila bair told the american banker in an article published this morning mr. president and i quote, the status quo is bailouts, the status quo is bailouts. that's what we have now i go on to quote. if you don't do anything, she says, you're going to keep having bailouts, and of quote. and nothing is what we will have if members vote against to even come up for debate on the floor of the united states senate. sheila bair goes on to say it makes bailouts in this bill that will happen before this body it makes bailout's impossible and it showed. we worked hard to squeeze bailout language out of this bill. the construct is you can't be allowed an individual institution. you just can't do it. >> what the senat yield for a questioned? a first of all i just want to say thank you so much for taking to the floor to explain to the american people the very strange debate we hear coming from the republican leader on this. i was stunned because i had heard he had met with the wall street people and the banks and then he said over and over again the same phrase yesterday wh

this happens -- the model we're using here and one of the main advocates, sheila bair, the head of the fdic, she's the funeral director for failed banks and she's had the best experience. we have followed her, when a banks fails, you put it out of business. the point is that you don't just stop, you want somebody to wind it down. you have debts that are there not to the bank itself, but to make sure that other people aren't hurt. that's what this money goes for. as i said, there is one other issue that's very important where i'm prepared to send something to the senate on the question of reigning in derivatives. we did a pretty good job in the house. didn't go as far as we should have. we've seen how much trouble they can be. making them be open and traded and if the senate bill the tougher, i'll try to get my cloegs to go along. >> do you think blanche lincoln and the committee went too far? >> in one case, they didn't go far enough. i think they give too much of an exception in one area. i think the way it's worded, there are smaller financial institutions that have a legitimate need

i want to thank sheila bair from the federal deposit insurance corporation.e know her here having worked as legal counsel and being part of the bush administration. when she talks about our bill and says that she did today hear that there's absolutely -- this bill has been written specifically to end any notion of any kind of a bailout by the american taxpayer again -- i'll quote her again -- "it makes bailouts impossible and it should. we worked really hard to squeeze bailout language out of this bill. the construct is you can't bail out an individual institution. you just can't do it." end of quote. further, mr. president, our bill stops bailouts by imposing -- let me tell you how we do it -- tough new requirements on wall street firms. being too big and too interconnected will cost these firms dearly. and should that not be enough, our legislation, regulators can use the new powers in our legislation to break those firms up before they can take down the economy of our country. it stops bailouts by forcing firms to write their own funeral plans and to pay f

i want to thank sheila bair from the federal deposit insurance corporation. we know her here having worked as legal counsel and being part of the bush administration. when she talks about our bill and says that she did today hear that there's absolutely -- this bill has been written specifically to end any notion of any kind of a bailout by the american taxpayer again -- i'll quote her again -- "it makes bailouts impossible and it should. we worked really hard to squeeze bailout language out of this bill. the construct is you can't bail out an individual institution. you just can't do it." end of quote. further, mr. president, our bill stops bailouts by imposing -- let me tell you how we do it -- tough new requirements on wall street firms. being too big and too interconnected will cost these firms dearly. and should that not be enough, our legislation, regulators can use the new powers in our legislation to break those firms up before they can take down the economy of our country. it stops bailouts by forcing firms to write their own funeral plans and to pay

there's no question that this is something sheila bair has proposed.the fdic wants to see a prefund. the treasury would like to see a postfund. they'd like to see it come after the fact. i want to digress for a second and say that i hope the reason that treasury wants a post-fund is not because in lieu of having a pre-fund of $50 billion from these large institutions, they want to see a bank tax. as a matter of fact, i'm going to be surprised if, after republicans argue against a pre-fund and it's changed and the administration comes back and chairman dodd comes back and we end up with post-funding, both of which do the same thing, i might add, and both of them work, it's going to be interesting to me to see if whether that argument basically has led to treasury then having the ability to come back and -- and do a bank tax. i think at the end of the day, that's something that they've been wanting to achieve, and it's interesting how this debate is evolving. but -- but let me go back to this -- let me go back to this pre-fund. at the end of the day, i t

. >> we had sheila bair who went through the process of fdic closing down banks and selling thes a socie assets and positiv to bidders like yourself, and why if they are closing down the bank, are those assets attractive to you? >> well, in the case here, we actually are a bank that has planned on doing transactions with the fdic since 1993. the reality is that this transaction is a franchise that has the ability to grow its deposit base. the assets that we have are $6 billion in one to four-family covered assets, meaning covered by the fdic. the other assets, the ore, and the cie loans and commercial loans went with the fdic, and they are going to be sold in a separate transaction, so in this transaction, we have actually created a better and bigger bank. the combined bank is actually more highly capitalized because we issued $1 billion in stock and additional liquidity, because we have $3 billion in cash to keep in reserve and a much larger ratio of deposits to assets as well as significant greater likelihood of expanded earnings. so, in all respects, this transaction is very good. >>

our final panel this afternoon, sheila bair, chairman of the federal deposit insurance corporation, johnbowman, acting director of the office of thrift supervision. we are grateful not just for your being with us today. but for your voluntary or involuntary patience. i think you both know what our rules are so under rule 6, our witnesses -- all of them are sworn in so we would ask to you please stand, raise your right hand. do you solemnly swear that the testimony you're about to give to this subcommittee will be the truth, the whole truth and nothing but the truth so help you god? ms. bair, why don't we ask you to go first. >> chairman levin, i appreciate the opportunity to testify regarding the role of regulators in their supervision of washington mutual bank or wamu. the fdic shares the subcommittee's concerns about issues associated with the primary regulation of large and complex insured deposit other institutions that pose significant risk to the deposit insurance fund and the fdic's role as backup supervisor. to assist the fdic in carrying out its deposit insurance responsibilitie

and sheila bair, chair of the federal deposit insurance corporation, said her agency did all it could. battle lines have hardened on a bill to reform financial regulation. president obama called again today for reining in "derivatives". they include the mortgage-backed securities that triggered the housing market collapse. the president said, "i will veto legislation that does not bring the derivatives market under control." the senate could take up the bill next week, but all 41 senate republicans announced today they will oppose it. nearly all u.s. hospitals will have to give same-sex couples greater rights on visitation and medical decisions. the president issued the order last night. it will end policies that sometimes bar gays and lesbians from visiting their ailing partners or consulting on treatment. all hospitals accepting medicare and medicaid patients are affected. senate republicans and democrats went at it today over a federal court nominee who's become a lightning rod. newshour congressional correspondent kwame holman has the story. >> holman: the focus at the senate judi

and to their credit the administration helped i think by sheila bair and the fdic decide to step back and let them fail. you cannot find that failure in the day. they were bluffing. goldman sachs at 800 billion is not bluffing. if you let them tell you have a very safe problem on your hand. that's certainly how the administration sees it, and i agree with them. people say, well, simon, we have the revolutionary a 40. in dog bill. revolution other is requested by secretary geithner, support the white house. this will allow us to take over and managed the failure and contraction, liquidation, of megabanks when they get in trouble in the future. well, with all due respect, to people who work long and hard on capitol hill, and i do have a great deal of respect for many of them, the resolution will authority is a unicorn. unicorn is a magical beast with fantastic recuperative powers. it is also a myth. check with your children if you don't believe me. they will tell you. if you call for unicorn, it doesn't come. there are no unicorns that the revolutionary authority cannot work because the

there are >> now the chair of the fdic, sheila bair, and john bowman. they recently spoke before a senate subcommittee that examined the role of banking regulators in the 2008 recession. senator carl levin chairs this hearing. it's about 35 minutes. >> our final panel this afternoon, sheila bair, chairman of the federals do state insurance -- deposit insurance corporation, john bowman, acting directer of the office of thrift supervision. we are grateful not just for being with us today, but for your voluntary or involuntary patience. i think you both know what our rules are, so under rule 6 our witnesses, all of them, are sworn in, so we would ask you to, please, stand and raise your right hand. do you solemnly swear the testimony you're about to give to this subcommittee will be the truth, the whole truth, nothing but the truth so help you god? ms. bair, why don't we ask you to go first. >> chairman levin, i appreciate the opportunity to testify regarding the role of regulators in their supervision of washington mutual bank or wamu. the fdic shares the

there's no question that this is something sheila bair has proposed. the fdic wants to see a prefund. the treasury would like to see a postfund. they'd like to see it come after the fact. i want to digress for a second and say that i hope the reason that treasury wants a post-fund is not because in lieu of having a pre-fund of $50 billion from these large institutions, they want to see a bank tax. as a matter of fact, i'm going to be surprised if, after republicans argue against a pre-fund and it's changed and the administration comes back and chairman dodd comes back and we end up with post-funding, both of which do the same thing, i might add, and both of them work, it's going to be interesting to me to see if whether that argument basically has led to treasury then having the ability to come back and -- and do a bank tax. i think at the end of the day, that's something that they've been wanting to achieve, and it's interesting how this debate is evolving. but -- but let me go back to this -- let me go back to this pre-fund. at the end of the day, i

i heard sheila bair speak at new york public library monday of this week. first of all, she's extremely impressive person. i think she did, perhaps, the best job dealing with the credit crisis over the last year. but she talked about how they'll use this resolution authority to wind up a problematic bank. that way we don't have to worry so much about what's happening at, you know, goldman sachs or morgan stanley or pick your favorite institution. >> you're okay with the volcker rule for commercial banks? >> sure. i don't -- >> maybe not for investment baction. >> i don't think that private equity and hedge funds should be funded by taxpayer financed institutions. i don't think there's a good business reason for doing it. i think they could spin off those divisions. citi sold their real estate private equity recently. those are not -- i think if banks actually were simpler and easier to understand, they would try to trade higher valuations. maybe wouldn't earn as much but those earnings would be awarded a much higher multiple. as a result, the shareholders w

looking at regulators from the fdic and other government organizations including fdic chairwoman sheila bair. the hearing is expected to go some six hours or so. carl levin is the chairman of the subcommittee. on investigations. it should get underway shortly. also today we're covering this morning a discussion on the 15th anniversary of the oklahoma city bombing. the senate for american progress action fund is holding that discussion. former president bill clinton will speak to that. and that is coming up -- he is the keynote speaker. he'll speak about 10:00 eastern in about a half hour. the event is getting underway live now. you can follow that on c-span2. another senate hearing for you this morning the judiciary committee hearing for a california law professional. the associated press writes that the professor will be a test case of president obama's ability to win confirmation for a liberal appeals court nominee. round one is today when professor lu nominated for a san francisco based appeals court will appear before the senate judiciary committee. it will begin live at 10:00 am eastern

i introduced an amendment in the financial reform bill that sheila bair first recommended that would have a limited -- or would limit the priority preference that repo transaction get upon resolution. you could make the same argument in regards to derivatives. when a firm is in a death spiral, given what we know about lehman and the collateral grab they are in at aig, and the liquidity run that that created, would it not impose a more market discipline -- useful market discipline -- to limit the preference that repo transactions get or that the collateral provided for derivative transactions gets? do you have an opinion on that? >> i have not been involved and i do not have a deeply held opinion, but i do think it would impose useful market discipline. >> secretary geitner? >> i would not want to alter the claims to bankruptcy without enormous care and thought. you are exactly right that the risks of the accumulated in repo and derivatives were hugely consequential. i think the best way to limit those risks is to make sure that those markets are run with much tighter constraints to m

plans that have been debunked by the independent media analyst and even republicans like german sheila bair and let me point out the men of that suggested this game plan written by the political strategist was written long before even one word was written on the bill. they were told how to fight the bill that didn't exist out here by accusing the bill of leaving open the too big to fail even though they knew those who read the bill that those provisions had been written so tight no one could possibly argue too big to fail would ever be allowed again under the bill that we've written and the republican leadership return policy that every member of their caucus vote to kill this bill. before the debate even began. madam president, i know for a fact members of this body on both sides of the ogle want to pass a good bill. my colleagues here know me well and know my reputation over the years. i have never, ever passed a major piece of legislation in this body over three decades i haven't had the cooperation of backing a member on the other side of the ogle never once on every piece of legislatio

in fact, sheila bair who is the chairwoman of the fdic, someone who has been chairing the fdic with distinctionfor several years said it virtually eliminates the possibility of a taxpayer bailout so that's part of it. strengthening consumer protection. i mean, there has been, i think, an unfortunate generalization that consumer protections are bad for business. frankly, we should have discovered in the last several months that good consumer protections are very, very good for business. many of those consumer laws which would have protected people seeking mortgages which were ignored or exempted would have, i think, improved dramatically the mortgage situation, swro improved business, -- would have improved business, would have made the overriding issue of efficient capital easier. but when you have very little protection for consumers, they are at the mercy of those who are looking to make a quick buck. not one was watching out for them. but not only that, the individual mortgage didn't have anything as they say, any skin in the game they sent it to the securitization process, someone wrapped i

don't believe the press reports, madam president, here's what our friend, the head of the fdic, sheila bair, had to say. she, as i said, is the head of that organization, the federal deposit insurance corporation, former legal counsel to the minority leader, bob dole, a republican in good standing, i might add, as well. she pointed out -- and i quote her -- she shuts down by the way failed banks for a living. she's a republican. she says, "the status quo is bailouts. that's what we have now. if you don't do anything, you're going to keep having bailouts." further, she says, "it makes this bill" -- talking about our bill, this bill here, "it makes bailouts impossible. and it should. we worked really hard to squeeze bailout language out of this bill. the construct is you can't bail out an individual institution. you just can't do it." end of quote. madam president, i will speak a little bit later. i know my colleagues and others may want to be heard. can i ask for two additional minutes. the presiding officer: without objection. mr. dodd: thou how in the world the minority leader can come up

there's no question that this is something sheila bair has proposed.the fdic wants to see a prefund. the treasury would like to see a postfund. they'd like to see it come after the fact. i want to digress for a second and say that i hope the reason that treasury wants a post-fund is not because in lieu of having a pre-fund of $50 billion from these large institutions, they want to see a bank tax. as a matter of fact, i'm going to be surprised if, after republicans argue against a pre-fund and it's changed and the administration comes back and chairman dodd comes back and we end up with post-funding, both of which do the same thing, i might add, and both of them work, it's going to be interesting to me to see if whether that argument basically has led to treasury then having the ability to come back and -- and do a bank tax. i think at the end of the day, that's something that they've been wanting to achieve, and it's interesting how this debate is evolving. but -- but let me go back to this -- let me go back to this pre-fund. at the end of the day, i t

in 2002, sheila bair that assistant secretary of the treasury worked hard to try to put in place best practices or mortgage subprime mortgage lending. in 2004, the fbi warned that the was an epidemic of mortgage fraud that if unchecked could lead to losses greater than the s&l crisis. in 2005, the mortgage insurers wrote a letter to the federal reserve as well as other federal agencies warning that it is quote, deeply concerned about increased mortgage market fragility which combined with growing bank port louis at high risk products poses a serious potential problems that can occur with dramatic suddenness. in addition to that come their way number of internal actions, some of which you refer to. a staff member in 1998 to the community consumer affairs committee urging action in this area. a report by the staff called the problem of predatory lending in november 2000, in which the staff proposal urged that loans be banned to people who did not have the ability to pay and that there the broad prohibitions on deceptive lending. governor gramlich of course urged the promulgation of regu

please help me welcome sheila c. bair, rob dearment to the institute. >> things to all three of you for coming tonight. it's special to talk about senator tefra and his accomplishments as an individual. i would like to begin by asking each of you to tell how you came about working per for bob dole in the various roles you have in his office. let's start with you. >> i came to work for senator dole in '79 when the senator goes to the position of ranking member of the senate finance committee replacing paul curtis and dole as elevated and i think the senator wanted to give some young warriors to help staff that committee and through elizabeth elizabeth called one of her classmates at cal for ten and birling and the bald and myself worked at covington and birling and i think that bob recommended us and came over as the republican staff director and i came over as the deputy director. i think bob was particularly a litigator was interested in having somebody there who understood the tax law so that is one of the areas that i