. >> i believe is senator shelby on his way? >> i understand senator shelby is on his way. we have a second vote and i would appreciate your patience and i would put the committee into recess until senator shelby. >> you want to meet now, mr. secretary? thank you very much. the committee is in recess until senator shelby arrives. thank you very much. the committee is taking a quick break as you just heard. you can watch that on c-span2. earlier leon panetta said that a balanced approach for tax cuts is feeded in order to meet the $5 billion level mandated by the budget control act. >>> come quick programming updates while we wait for in committee to come back. this afternoon on c-span3 we'll have remarks from tim geithner. he's a featured speak or the council on foreign relations event where he's expected to talk about u.s. economic recovery efforts and preview next week's g-20 summit in mexico where world leaders are gathering to discuss issues surrounding europe's debt crisis. again, that's live here on c-span3 beginning at 4:30 eastern. and in about 25 minutes over on c-

chairman, senator shelby and members of the mitty. you are all probably familiar with the concept of the law and the instrument but you may know it as the law of the hammer. if you are holding a hammer everything looks like a nail. that concept is supposed to be a warning not to use reflexively a familiar tool in response to every problem but i must confess that the longer i taught and wrote in the area of financial regulation the more convinced i became in the centrality of strong standards. my time at the federal reserve has not changed my mind. on the contrary, a series of events most recently the jp morgan loss has only reinforced my conclusion. a bank with a strong capital position can absorb losses fraup unexpected sources whether external shocks to the economy, the insolvency of important counter parties or failures of risk management within the firm. strong buffers ensure that losses are born by share holders of the bank and not by taxpayers either directly through bailout or indirectly through a major effect on an economy. so

with that i turn to senator shelby. >> thank you mr. chairman and thank you for calling this very, very important hearing and to our panelists today. welcome again. i think we have spent a lot of time together. probably we will spend a lot more in the future right here. today the committee will hear from the financial regulators who supervise our nation's banks. the safety and soundness of our banking system depends on your efforts. it was not long ago that our banking system began to collapse not withstanding the presence of a large and vigorous regulatory structure. i believe it is critical that this committee conduct vigorous oversight to ensure that the regulators do not repeat the mistakes of the past. as the primary regulator of the national banks, the office of the comptroller is responsible for insuring the safety and soundness of our largest banks. this means that the occ supervises j.p. morgan chase. whose recent $2 billion-plus trading loss has been in the news. and because taxpayers basically guarantee j.p. morgan's deposit

. >> thank you senator shelby. this morning opening statements will be limited to the chairman and ranking member to allow more time for questions from the committee members. i want to remind my colleagues that the record will be open for the next seven days for opening statements and any other materials you would like to submit. now i will briefly introduce our witnesses. deputy secretary of the u.s. department of the treasury. he is currently serving as a member of the board of governors of the federal reserve system. thomas curry is comptroller of the currency. welcome, mr. curry, to your first hearing before the banking committee since your confirmation as comptroller. marty greenberg is the acting chair of the federal department insurance corporation. and richard is the director of the consumer financial protection bureau. i thank all of you again for being here today. i would like to ask the witnesses to please keep your remarks to five minutes. your full written statements will be included in the hearing rec

thank you. >> thank you, senator shelby. this morning's opening statements will be limited to the chairman and the ranking member to allow more time for questions from the committee members. senator warner is a valuable member of this committee and is absent to attend his daughter's graduation but he will be submitting a statement and questions for the record. i want to remind my colleagues that the record will be open for the next seven days for opening statements and any other materials you'd like to submit. now i will introduce our witness. mr. jamie dimon as chairman of the board, president and chief executive officer at jpmorgan chase and company. mr. dimon, your full written statement will be included in the hearing record. please begin your testimony. >> chairman johnson, ranking member shelby and members of the committee, i'm appearing today to discuss recent losses in a portfolio held by jpmorgan chase's chief investment office. these losses have generated considerable attention and while we are still reviewing the

senator shelby, what are you talking about?'t seem to understand the gist of your question at all. which is that jamie dimon is good fodder. but the u.s. government's not. i think he was kind of stunned by it, joe. it was one of those moments where i think he said, well, i don't know. i guess we do have a big deficit. it was kind of shocking. >> it was like, fair point. moving on. >> he's often puzzled, shelby. >> we stumped him. you know what, joe. to your point, i think it's a fair one. it would be one thing if jpmorgan had suffered a mortal blow. >> or lost client money. >> the numbers are big. don't get me wrong. but -- >> it's like you're making the leap. you're making the leap to taxpayer being damaged or deposits being damaged. the leap is this wide, but they don't care. they're making it anyway. >> it's theater. you know that. maybe there is an element of it that will result in education for those senators asking the questions. one can always hope. >>> final thoughts from our guest most, mike mayo, right after this. fid

today the prosscution calledd its final wiiness, and the shelby lin has more.gits case. more.eery sanduskyys defense attorney called witnesses to speak to tte former penn state assistant coach's character and reputation, including two participated in sandusky's charity,,the second mile.thh coaches testified it was normal for them to shower with children fter sporting events. but under cross examination the first coach was asked if he hugged boys in the shower and he saiddno.if ttis is what we're having a the defense, iim not ength of overwhelmed, and i think it was really a noo very strong beginning.earlier in the day the defense attempted to haae several of the 52 charges dropped, arguing they were too vague or testimony did not support theeclaims. the motions were rejected by the judge, but one chaage was withdrawn by the prosecution. sandusky has leaded not guilty.the prosecution rested &pmonday after nearll a eek of graphic testimony from alleged victimm.on cross examination, inconsistencies n the nd witnesses' testimony, and question their motivations. phere is lots of mo

shelby lynn brings us today's proceedings. >> jerry sandusky's defense attorney called witnesses to speak to the former penn state assistant coach's character and reputation. including two former coaches and a boy who participated in sandusky's charities. the coaches testified it was normal for them to shower with children. under cross-examination, the first coach was asked if he hugged boys in the shower and he said no. >> this is what we're having a preview as to the strength of the defense, i'm not overwelmed and i think that it was a really not very strong beginning. >> earlier in the day, the defense attempted to have several charges dropped. arguing they were too vague or testimony did not support the claims. the motions were rejected, but one charge was withdrawn by the prosecution. pleaded not guilty. the prosecution rested monday after nearly a week of graphic testimony from alleged victims. on cross-examination, the defense tried to find inconsistencies in the witness' testimony. >> there's lots of money out there, lawsuits have already been filed against penn state, against the

richard shelby. >> one opening statement will be permitted to the ranking member. i will note that senator warner is absent to attend his daughter's graduation but he will be submitting a statement and questions for the record. i want to remind my colleagues that the record will be open for the next seven days for opening statements and any other materials you would like to submit. now, i will introduce a our witness. mr. jamie dimon is the chairman of the board, president and chief executive officer at jpmorgan chase and co. mr. dimon, your full written statement will be included in the record. please begin your testimony. >> chairman johnson, ranking member shelby, and members of the committee, i am appearing today to discuss recent losses in a portfolio held by jpmorgan chase's chief investment office cio. these losses have generated considerable attention, and while we are still reviewing the facts, i will explain everything i can to the extent possible. oforgan chase's six lines business provide a broad array of financial products and services to individuals,

other than that, icon occur with what secretary wolin said. >> senator shelby? >> thank you. i think it's kind of a given here, from what i read and what i note, the stress test jp morgan went through and so fo h forth. i've been told that they would have to sustain losses 40 times -- in other words, 70, $80 billion to still be standing. is that right, governor tarullo? >> senator, in the stress test, what we did with the trading was to assume an instantaneous shock based on our very adverse scenario, which entail trading losses of $28 billion. we also assumed over the period of the stress test credit losses, the sum of those gives approximately the number you indicated. >> comptroller curry, tell us, walk us through from what you know what was going on at jp morgan. were they managing risks, making money, do a combination? everybody has to measure risk, but in other words what was really going on? you had people on site, right? >> that's correct. >> so, they took a position. was that a position to manage something they had already done or could you explain it to us? >> that'

our ranking member, senator shelby, talks often about sufficient capital as the greatest deterrant toward too big to fail, toward systemic risk, and i certainly agree with that. one of the other components that is involved, i think, in trying to make certain that the taxpayers are not responsible for the demise of a company like yours, a financial institution like yours, is the living will. so-called living will. would you describe to me what process has jpmorgan gone through to develop that living will, how transparent it is, what role the regulators play? what evidence, if we saw the living will developed for jpmorgan, would give me or others satisfaction that your company can be dissolved without a call upon taxpayer dollars? >> i think i would agree with most of the people here. we have to get rid of anything that looks like too big to fail. we have tool l allow our big institutions to fail. we shouldn't prop them up. we have tool lou th allow them . going one step further, you want to make sure they fail and not damage the american public. you want to be in a situation where a big ba

shelby lynn on when or if sandusky will take the stand. >> reporter: jerry sandusky's defense attorney called witnesses to speak to his character and reputation. a political consult and associated with sandusky charity second miami was inspired by the unique way sandusky related to young boys and girls in the program. a former penn state coach testified it was normal for coaches to shower with children after sporting events. but under cross-examination he was asked if he hugged boys in the shower and he said no. >> if there is what we're having a preview as to the strength of the defense, i'm not overwhelmed, and i think that it was a really not very strong beginning. >> reporter: earlier in the day the defense attempted to have several of the 52 charges dropped arguing they were too vague or testimony did not support the claims. the motions were rejected by the judge, but one charge was withdrawn by the prosecution. the prosecution rested after nearly a week of graphic testimony from alleged victims. the state's final witness was the mother of victim number 9. her son met sandusky thr

richard shelby. >> one opening statement will be permitted to the ranking member. i will note that senator warner is absent to attend his daughter's graduation but he will be submitting a statement and questions for the record. i want to remind my colleagues that the record will be open for the next seven days for opening statements and any other materials you would like to submit. now, i will introduce a our witness. mr. jamie dimon is the chairman of the board, president and chief executive officer at jpmorgan chase and co. mr. dimon, your full written statement will be included in the record. please begin your testimony. >> chairman johnson, ranking member shelby, and members of the committee, i am appearing today to discuss recent losses in a portfolio held by jpmorgan chase's chief investment office cio. these losses have generated considerable attention, and while we are still reviewing the facts, i will explain everything i can to the extent possible. jpmorgan chase's six lines of business provide a broad array of financial products and services to individua

i think you told senators shelby that the purpose of hedging is to earn a lot of revenue in the event of a crisis and i think you said hedging works to an extent in 2008 for your company. can you quantify the extent to which hedging worked in 2008? >> i don't recall the 2000 a year but the credit portfolio earned several billion dollars of income in the three or four years before. we could follow up and give you more specific details. >> i think that is probably what we need to do. i think you also said you did not know what the volcker rule is. if you don't, we don't either. i think you know how it is being drafted. as as currently drafted, how would that have affected the c.i.o. ability to do that hedging in 2008 and prevent several billion dollars of losses? >> i think you are allowed to portfolio edge under the volcker rule. i don't know what the current rule would do. we should step back for a second. the really important part is not portfolio hedging. it is the ability to actively make markets and raise capital for companies and clients and investors. we have the widest, best, d

. >> senator shelby? >> thank you, mr. chairman. mr. dimon, so that we would have some idea of what happened, could you explain a little further what really happened without divulging your proprietary interests. we don't want you to do this. could you tell us a little more, in other words, you were managing risk. what were you managing? >> so the biggest part, the biggest risk we take is credit, loans. the excess deposits, we have $350 billion portfolio, that's the biggest part of cio. its average rating is aa-plus. it's conservatively managed. there's an unrealized profit of $7 billion. in addition, i should also point out in terms of risk management we also have $150 billion in cash today, pretty much invested in central banks around the world. so we try to be a very conservative company. >> we understand that. in this particular occasion that brought these losses on, explain to us without getting into your proprietary area what you were doing and what went wrong. >> so the synthetic credit portfolio originally -- >> by synthetic cred

richard shelby. >> one opening statement will be permitted to the ranking member. i will note that senator warner is absent to attend his daughter's graduation but he will be submitting a statement and questions for the record. i want to remind my colleagues that the record will be open for the next seven days for opening statements and any other materials you would like to submit. now, i will introduce a our witness. mr. jamie dimon is the chairman of the board, president and chief executive officer at jpmorgan chase and co. mr. dimon, your full written statement will be included in the record. please begin your testimony. >> chairman johnson, ranking member shelby, and members of the committee, i am appearing today to discuss recent losses in a portfolio held by jpmorgan chase's chief investment office cio. these losses have generated considerable attention, and while we are still reviewing the facts, i will explain everything i can to the extent possible. jpmorgan chase's six lines of business provide a broad array of financial products and services to individua

as shelby lynn reports, this comes as president obama used a power that he's never used before. >> attee has voted along party lines to hold eric holder in content of congress for failure to turn over subpoenaed documents related to the fast and furious sting operation. president obama had asserted his presidential privilege. allowing the justice department to withhold the information. as the result of the program, more than 1,000 weapons were lost in mexico and may have ended up in the hands of drug cartels. >> our purpose has never been to hold the attorney general in contempt. our purpose has been to get the information the committee needs to complete its work. that it's not only entitled to do, but obligated to do. >> reporter: in a statement, he said the justice department has already provided thousands of documents. he says the committee chairman, darrell ica has taken unnecessary action intended to invoke an argument between congress and the executive branch. now some committee members are interested in what's in those documents. >> why would the president claim executive priv

and let me follow up a question that senator shelby posed. that is, the financial stability council has not designated a mutual fund as systemically important and subject to regulation, but they can do that, is that correct? >> i believe that, um, we could designate individual, um, funds as systemically important or, um, the activity of maturity transfer, credit mediation or whatever as systemically important activities. >> and that raises the possibility if the sec did not promulgate a rule that would apply to all mutual funds, then the fsoc could pick out, presumably, the largest funds and impose restrictions or impose operating procedures on them under their authority. is that a fair estimate? >> i think that's right. we're working to refine what criteria would be used for, um, asset managers in designated and systemically important, but i believe that's right. >> so you could have, essentially, a system in which some are regulated and some are not. yours -- i would presume anything the sec did under the investment act would apply to every

as shelby lynn reports, this comes as president obama used a power that he's never used before. >> ase committee has voted along party lines to hold eric holder in content of congress for failure to turn over subpoenaed documents related to the fast and furious sting operation. president obama had asserted his presidential privilege. allowing the justice department to withhold the information. as the result of the program, more than 1,000 weapons were lost in mexico and may have ended up in the hands of drug cartels. >> our purpose has never been to hold the attorney general in contempt. our purpose has been to get the information the committee needs to complete its work. that it's not only entitled to do, but obligated to do. >> reporter: in a statement, he said the justice department has already provided thousands of documents. he says the committee chairman, darrell ica has taken unnecessary action intended to invoke an argument between congress and the executive branch. now some committee members are interested in what's in those documents. >> why would the president claim execut

the big question, i think, we had senator shelby talk about it earlier.e's going to be grilling jamie dimon in just a bit, it's going to be about what he knew and when he knew it and it's still going to be all about disclosure. the tempest in a teapot. april 13th. what happened between that day and may 10th. and then as you guys have talked about, so frequently, this whole idea of reform and regulation, i think there's going to be a big discussion from what i understand about portfolio hedging which is how this happened. at least in that group under that direction. and i think you're going to see a lot of talk about ina drew. it's a name that was not mentioned directly in his opening testimony. but it's a human drama story about his relationship with her. his trust in her. she, of course, ran the cio group. what she had done for him for so many years. and how i think he is going to say that he became complacent in all of this. i think that's going to be an issue. people talk about risk coms in systems. you can have only so much of that. ultimately, this i

scott will be shelby, lisa shin, pierre and natalie brown. >> good morning task force. my name is lois scott, and i live by cathedral, i live on cathedral hill by st. mary's cathedral about two and a half blocks from the proposed hospital site. i'm on the board of the cathedral hill neighbors who were dispointed that our neighborhood who was going to be reunited in your quest and necessity to have the numbers come out was still split. i guess we joined russia hill as one of those neighborhoods that will be permanently split. we're some what of an emerging neighborhood association, that we've only been in existence about half a dozen years, not as long as some of the other neighborhoods in san francisco. we have a huge, huge issue coming up on the construction of the cathedral hill campus of the hospital. 555 beds, a huge impact on our neighborhood. that particular block we urgently request you put that back in district five. it has no population and as a future hospital it will have no population. it is so much more related to the western addition than the marina in dis

i had heard of marcus shelby and had been in join his work but never had the opportunity to meet him.rought together by the equal justice society specifically for this project. we were charged with beginning work. marquez and i spent a lot of time addressing our own position on the death penalty, our experiences with people who had been incarcerated, family members, friends of friends. pulling our information. beyond that, we did our own research. to create a picture that resonated with humanity. it is the shape of a house. in this context, it is also small and acts like a cell. i thought that was an interesting play on how these people make these adjustments, half to create home. what is home for these people? the home is their cell. people talk a lot about noise -- very noisy in prisons. that is interesting to me. looking at the communication level, the rise of frustration of being caged, wondering, where does redemption fit into the equation here? [singing] i think both of us really believe the death penalty is wrong, and is flawed for many reasons. the list is as long as my arm --

i was asked by senator shelby and senator toomey to provide background on the 300 o decisions -- 300 occasions where there's been capital provided to the -- >> okay. so my question is have you at the sec studied the impact of the sec's 2010 changes on money markets? >> yes, we have. and in the release if we publish one laying out potential further reforms, we would, of course, lay that full analysis out. but i will tell you we believe the 2010 reforms worked extremely well for what they were designed to do which is to provide sufficient -- assure that there is sufficiently quid fit in money market funds to meet heavy redemptions. and as we saw through the summer in europe when there was a period of extraordinary redemptions, they performed very well. but even that period, that three week period from june 14th on, um, about $100 billion was withdrawn from money market funds. that compares to $300 billion withdrawn from money market funds in just a few days after reserve broke the buck. so i guess i would disagree that there was no run. there was clearly a run in 2008, and the goal her

senator shelby. and our next guest starts about hiking taxes saying no way.ry communications provider is different but centurylink is committed to being a different kind of communications company. ♪ we link people and fortune 500 companies nationwide and around the world. and we will continue to free you to do more and focus on what matters. thought they were dead. huh? [ male announcer ] should've used roundup. it kills weeds to the root, so they don't come back. roundup. no root. no weed. no problem. . >>neil: well, it looks, looks, looks like they are trying to work out a compromise to fix the budget impasse that is gaining contraction. reports say some senators including some republicans want to consider tax hikes as part of the deal even if the ratio is something like $10 in spending cuts for every $1 in tax hikes. and a columnist says you cut that deal you will be cut out of your life. she will forget you and hate you forever. so, that is something you do not want to see them do, right? >>guest: no, i do not but it is not me they should fear but the ame

. >> i believe senator shelby -- center shelby the is on his way. we have a second vote. i need to get back to that. i would appreciate to put the committee into recess until center shall be arrives. >> we are not going anyplace. [laughter] thank you burn much. with that, the committee is in recess until senator shelby arrives. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] [conversation] >> senator john mccain has criticized president obama for being too passive in his response to violence in syria. he is called for u.s.-led air strikes. on monday, the armed services committee member will discuss his position on syria. you'll be joined by syrian activists, the senior editor of "the weekly standard," and others. that is live at 1:00 eastern on c-span 3. >> supreme court justice ruth bader ginsburg mentioned the courts upcoming ruling on health care on friday. she talks about the atmosphere surrounding the court, including press conferences, prayer circles, and protests. also the speculation of the media on

richard shelby, alabama, $2.5 million. bob corker, tennessee, $3.4 million. mississippi, $1.5 million. we could go on. >> i mean, this is why there is no line between religious leaders and bankers. and the on the millions of dollars they're getting to run the dollars to get elected in office and so forth, there is also the sort of additional value that is received by the fact jpmorgan chase is giving them money. it is not the only bank giving them money, the the entire industry. we're looking at a piece of it from the most largest and commercial powerful bank in the u.s., but this is the way it works. these people know partially why they're sitting there in those seats is, unfortunately, not because they're simply voted in but because that the money to basically market themselves and stay in and connect to their real friends, which are the banking community they're supposed to be legislating against. >> thank you for being with us, nomi prins, author of a number of books including, "it takes a pillage: behind the bonuses, bailouts, and backroom deals from was

. >> senator shelby has a very brief observation to make. >> mr. dimon, do you know of any bank that's been well capitalized, well regulated and we will managed that has failed? >> i do not, sir. >> are you aware -- i know you're aware, we've closed about 500 banks in the last four years. just about every one of those banks failed because they were inadequately capitalized. bad loans. so would you agree there's no substitute for capital in you're running a financial institution. you've got to have capital, and it's got to be liquid. >> fls no substitute for capital. that's correct, sir. >> thank you, mr. dimon. >> thank you. >> for your testimony and for being with us today. today's hearing is a good reminder that we can't let down our guard and we must remain vigilant so we continue to have a strong and stable financial system. before we adjourn, i also want to provide committee members a brief update on housing refinancing. ranking member shelby and i are continuing to discuss a way forward on housing -- >> so the chairman and ceo jamie dimon con

c-span: when shelby foote was wrthvir esust h en ahetlld on the same day that the battles were fought. >> guest: mm-hmm. c-span: and i notice that stephen crane did some of the same, you say in your book. when did he go to the battlefields? >> guest: that was actually later. that was much later than "the red badge." he didn't have the money to travel there when he was wting he ry s wco through his shoes, just like henry fleming's in "the red badge." after "the red badge" was published, was commissioned to do some magazine pieces or newspaper pieces on e civil wrg orse te was interestn disie ledsn and he did exactly what shelby foote did. he visited the btlefields at the time during which the battle occurred. c-span: did it have any impact on him? teea "thli me w ie y based on the--on fredericksburg it's really a wonderful tale. it's a nice companion piece to "the red badge." mouticn r e"s. anene ba w bld hiuny, it would've been 18... >> guest: '95. c-span: what was going on here? >> guest: oh, what was going on in the world in 1895? c-span: what kind of a world did the book come into

. >> senator shelby. >> thank you. i think it's kind of a given here from what i read and what i know, stress tests, jpmorgan went through and so forth that they have more than adequate capital. i've been told that they would have to sustain losses 40 times, in other words, $70, $80 billion and they'd still be standing. is that about right, governor tarullo? >> senator, in the stress test what we did with the trading book is to assume an instantaneous shock based on our very adverse scenario, which entailed trading losses of $128 billion. we also assumed over the period of the stress test credit losses of $56 billion, the sum of those gives approximately the number you indicated. >> comptroller curry, tell us, just walk us through, from what you know what was going on at jpmorgan. you know, were they managing risk, were they making money, were they doing a combination of what? everybody's got to measure risk, but in other words, what was really going on? you had people on site, right? >> correct. >> they took a positio

i believe senator shelby is on his way. i understand that senator shelby is on his way. we have a second form but i have to get back to work. i just ask for the demonstrations so that i can return from the second vote. i would appreciate it. i would put the committee into recess until senator shelby arrives. >> we are not going anywhere. >> good. if you want to meet now, mr. secretary? [laughter] with that, this is in recess until senator shelby arrives. [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations][inaud] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] >> in a few moments, deputy prime minister and liberal democrat leader nick clegg testifies before eight panel examining the relationship between british politicians and the media. in a little more than 2.5 hours, secretary of state hillary clinton on u.s. relations of india, includ

senator shelby has additional questions. >> thank you. governor tarullo, in your testimony, you stay, and i'll quote, and i want to be like senator toomey and agree with you on this. and you said -- recent events serve to remind us that the presence of substantial amounts of high quality capital is the best way to ensure that significant losses at individual firms, meaning financial institutions, are borne by their shareholders and not depositors or daxpayers. taxpayers. what percentage of capital under basel 3 will large banks likely hold, and under the new enhanced capital standards, and will this amount, in your judgment, be sufficient? i think there's -- i think it's a given here that there's no substitute for capital. you can regulate everything in the world, but if they have inadequate capital and you know what's going to happen, sooner or later? >> so, senator, as you know, i -- because i believe the centrality of capital. i don't think it's the only way. >> oh, no. >> but it is a central way. >> but it's number one. isn't it? >> i