sheila bair, welcome. >> thank you. happy to be here. >> if you were trying to help some of those young people that you write for, understand this business called libor, how would you begin? what's the "once upon a time?" >> i guess i would try to explain to them that when you borrow money there's something called an interest rate which is your cost of borrowing money and there are different mechanisms for setting what that interest rate should be. and one of them is something called libor. and we are discovering now that a lot of unscrupulous people were manipulating that interest rate apparently to line their own pockets. and that is something that should be severely punished. >> is there one thing in particular you've learned so far that caused you to hold your breath? >>s they one caused me to hold my breath. i mean, you know, libor always troubled me. there's always been judgment associated with what some people call a fudge factor, there's always been judgment associated with libor, the libor survey. you were supp

joining success former fdic chairman sheila bair.d morning. >> happy to be here. >> we have a lot to talk about, but dodd-frank turning 2 years old and questions whether we're better off or worse off than two years ago. tell us what you think we've come, where the improvement stands and what we need to do at this point still. >> i think we've improved bank capital levels, capital is up, liquidity, funding sources are somewhat more stable, so a credit quality is improving, delinquencies going down. there has been positive improvement, some the result of regulatory action and market forces and improving economy. there are a lot of challenges on the horizon and especially in the trading desk these large financial institutions it doesn't appear to be the reform has really taken hold. the culture still seems to be one of excess risk taking, perhaps ignoring the law when it means they can fatten their year-end bonuses. >> talking about the libor problems in? >> i'm exactly talking about the libor problem. so i think there's still a lot of

. >> here with her first on cnbc reaction to sandy weill's comments is sheila bair. she joins us on the "fast line." great to have you back on the "halftime" show. thanks for joining us. >> sure. happy to be here. >> your reaction to sandy weill this morning is what? >> well, flabbergasted. it's a little ironic, i must say, given the fact he and his institution were in the lead in pushing for the repeal of glass/steagall and then, of course, citigroup is the poster child for too big to fail in the bailouts during the 2008 crisis. so it is truly ironic. but obviously i agree with him. as i've said repeatedly, i think these banks are too big to manage centrally. they're too big to regulate and they do produce good shareholder value either. there's a lot of value to be had if they were broken up. >> what do you think it means to the conversation that sandy weill has now joined it? it's one thing for you to say so or for a politician on capitol hill to say so. but as you said, sandy weill is in many cases the father of the financial supermarket. when he joins the convers

we'll talk more about the libor scandal with former fdic chair sheila bair. the chair bair. but she isn't chair anymore. you knew that lawyers would be able to talk people into -- >> oh, right. >> that you would find a way to -- i remember when -- the guy that elizabeth warren's -- oh, he was -- >> the ambulance chaser. >> he had magnetic business cards as ambulances went by. call me, call me, call me. now he's in charge of the -- i mean, i -- >> they'll be running ads with 800 numbers for you to call. >> oh, yeah. definitely. >> except i think there's -- maybe i'm wrong on this. there's a mistaken belief that libor impacts a lot -- it does impact consumers but your mortgage rate is the prime rate. your credit cards, prime rate. >> what they're saying here -- >> not to dismiss what's happening -- >> are they saying rates were too low and they got in trouble? >> pre-2008 when manipulation was more related to the setting of derivative swaps but i still -- >> increasingly it appears this has been going on for -- >> a very long time. what makes me laugh -- to your point -- >> th

. >> sheila bair thanks for the hard work you put in.e fdic and founder of systemic risk council. >>> coming up i have told you about how congress needs to act and who is standing in your way of prosperity and who is going to protect you. now it is your turn to tell me what you think. i will tell you how you and i are going to debate. i upgraded to the new sprint direct connect. so i can get three times the coverage. [ chirp ] [ manager 2 ] it's like working in a giant sandbox with all these huge toys. and with the fastest push-to-talk... i can keep track of them all. [ chirp ] [ chirp ] [ male announcer ] upgrade to the new "done." with access to the fastest push-to-talk and three times the coverage. now when you buy one kyocera duracore rugged phone, for $49.99, you'll get four free. visit a sprint store, or call 855-878-4biz. [ chirp ] who are these guys? oh, that's just my buds. bacon, donuts. -my taste buds. -[ taste buds ] waffles. how about we try this new kind of fiber one cereal? you think you're going to slip some fiber by us?

host: sheila bair is a former chairman of the deposit organization and the current chair of the nonpartisan group. she wrote in this past week. she writes at the end of her column "we need regulators to write rules that the public can understand and examiners can enforce. they need to stop listening to lobbyists to come in with special perk -- a special interest provisions. they need to finalize treaties of an effective rules that are targeted at problems in our financial system. congress needs to support them. it is time to stop working around the edges and get the job done." host: we go to jacksonville, florida. bob is on the democratic line. caller: i would like a gentleman to address my question, or my statement, about how banks should go back to banking and not deal in equities or day trading period if they want the stock market, let them deal with long-term capital gains. it -- if i were a banker, i would be having 82. there is a need to the banks back to banking and let firms deal with equities, stocks. banks are having a heyday with the stock market, and that is the -- that is horri