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How do you noon eastern time -- the Treasury Secretary -- -- Capitol Hill Robert -- back with us by the way and generally -- well and I nine generally.
Hello let -- talk right now it's just moments ago a continental quite a big plane flying from my Brussels.
-- -- to -- yes the pilot died mid flight the plane just landed everything's fine and breaking it.
Italy and in bad weather as well here and it's -- if you're not in this area than in the country so quite a huddle and I.
I live it is channel was -- hearing -- -- touchdown actually moments before we walked and headlines -- in the -- -- denying him safely landing.
-- and that is that I'm really Oberstar I never heard anything like this happen.
I really think that given the easier worried about when you get on the popular against my right and to -- -- really worry about the healthier pilot.
She not know unless it really didn't have mr.
-- -- drunk pilots.
That was I don't know something else.
That's the story behind my I want to get back to businesses that are relatively quiet day so far and it's just my microphone.
You know we don't know yet what we're definitely -- some.
Less bad economic data that I'm not really -- not convinced that -- -- conventions that still point to think.
That's awfully sad it's better -- -- that's -- that's a lot better than they were expecting -- drop of seventeen and within that I think some people reporting to some of the new orders.
Numbers getting a little bit better jobless claims a little higher than expected it's still the trends lower.
The continuing claims number and the lowest level in many months now so dropping away from the record we'll see that's revised.
Right plus how -- revisions -- -- economic data out there is going to read this thing together.
They just thinking about this -- there is continuing claims this is the first time that we're seeing continuing claims of people accepting -- -- -- collecting first time unemployment.
Think continuing to do so the first suddenly -- instructions January.
The trouble is that you could actually move from first time unemployment to extended -- Stew that not being on any benefits at all.
And -- we get more data that shows a trend that there are people actually finding jobs.
We have no way of knowing.
If they are finding jobs -- -- just moving to extend about it.
And it's not only the -- that indicators it's it's not as bad people are saying that unemployment peaked.
It's still taking on come to find -- new jobs it's still not necessarily getting better.
If you that makes any sense -- -- potential silver lining it up and -- -- experts to.
-- tea leaves for -- and hopefully yes they did this mother -- his State Street the last of the ten banks saying they're gonna pay back -- that were approved last night after the -- on.
I'm clear to me why they waited so long everywhere the other nine got out during the trading day maybe they're busy.
Doing banking business and -- they have -- butter and jelly maker.
Blows the doors off their earnings reports.
Forecast well ahead of putting it in court TV it's a lot of peavy and it may be people hunkering down -- of a good TV -- myself yeah and my three year old now extends well.
-- -- Didn't didn't take long you know that's out there hey Hart yeah.
But it also interestingly you look through this -- Folgers coffee and they bought it not too long and not really that I added to the bottom line there.
For the you don't really think about coffee with the PBJ but intensity selling well and people are not going out they're not paying.
You know 45 bucks for these coffee drinks maybe just you know you have to PBJ after they've had their morning.
Ultimately of those voters commercial CNN's that I mean I knew anything they rip off the -- didn't have -- the top of the -- Never -- of soldiers costing about fourteen is that they usually seven in the -- educating our -- are stationed in Iraq.
I've got Humphries is the president and founder Voyager wealth management based out there in New Jersey right that's right CU -- you deal with sadness and making sure that people are investing your money and go where positive -- that is particular that's for.
-- focuses investment advisory services so that definitely is what we spent most of our time -- Partly because business that it's been it's been OK you know certainly 2000 it was a rough year for for everyone -- and we spent a lot of our time.
Coaching our clients and making sure where you we were.
Invested in the way that was most suitable for each client what do you sit waiting actually leads us out of what we're in right now.
-- you know I think get people are pretty pretty focused on the employment picture right now although.
That tends to be a lagging indicator more than a leading indicator.
So I I personally am more focused on the GDP numbers and the inflation.
And as well as.
The second quarter earnings.
Because we're gonna start to see some talk about that in the next week it -- refreshing -- -- -- -- on the -- yeah I think so you know I think a lot of the financial companies will probably have some negative news especially with you mentioned earlier about paying paying down target -- for the cost -- Absolutely -- that's gonna show up this quarter so you -- think there's definitely some things we got to keep our eyes on being with us.
Guys have -- -- -- when he sees banks are they healthy enough for you concerned maybe some are getting out.
For the wrong reason or too quickly even naming -- we hear a lot about the executive compensation but clearly you'd like to have -- government off your back as much as you can -- What are you concerned maybe some -- trying to exit before they showed.
Well I think that's certainly the concern.
The government and I think that's why they took it a little bit slower than what some banks would have wanted.
-- want them to pay back the TARP and then need money again -- six months from now so that's certainly don't write some absolutely that's certainly a risk.
If you look different -- so like I -- Banking housing autos.
That you green technology is -- is there one that you think we need to see a recovery and particularly in order to see -- recovery and the overall economy well I think what a lot of people focused on right now with regards -- sectors is the technology sector in general.
And I think a lot of people are looking for that to lead us out.
Because -- -- -- hey maybe a sector is broken that needs to be six in order for the -- definitely within the auto sector -- estimated that the governor was talking at the auto sector for example had to fix this otherwise the entire economy really is at a restaurant.
That was the same argument for the banking sector.
Housing not so much for a lot of people think that housing.
It's really at the heart.
-- have what you need to fix -- if you had to choose between those three what would you what would you choose.
-- I would think the financial sector probably was the most broken so that would be the first that would need to get corrected for us to really pull out of this.
And -- -- sectors are pretty broad sector that includes mortgages and banking and all that so.
I really think that you -- being the primary driver of what we you know went through last year yeah that's certainly will be needed to be fixed first and I think a lot of their financial regulation that's.
You know being discussed today and over the past few passionate issue and I think -- -- you actually worked for.
JPMorgan Bear Stearns Merrill Lynch as a trader yeah right so even inside the cultures the those institutions are familiar with them.
That's -- -- actually take for the change to happen that you think we might need.
To help repair the sector yeah I think you know some of -- he's been brought out with a new regulation and I think in terms of the risk that these firms are taking.
And how that risk is regulated.
And it's certainly a tricky line for the government to walk down.
With regards to that but there definitely needs to be some changes there you know how baby how they actually monitor that implement it and -- you know.
Implement the regulations could -- You know I had been doing that occurred about twenty years and was looking for -- a change.
Being nine in my career but there weren't that so far so good -- You know it was -- it's a bit of a change but you'll for the business Saddam running now.
I feel like it differentiates me a little bit from some of my competitors -- that my background is more from a products.
You know knowing that you know we use mutual funds a lot to invest in and I know a lot of mutual funds that.
That I'm using now more from an inside perspective as opposed to just reading the reviews on -- right so you know I look at that as a little bit of a differentiator.
In some of their competitors in the market -- and right now.
Always say can't regulate -- legislate greed so.
You know a lot of concern with the reforms are putting into place is sort of fighting the last battle may be if that some are you concerned that maybe.
The regulators can't keep up because clearly in the in the credit default swap market you know grew up -- 56 years has plenty of time after begin mushrooming for someone to step then.
And say wait a minute guys you're under capitalized here we needed to do something about this very concerned native people and that would be on these councils.
Overseeing these companies may not understand CBS CBOs.
Absolutely and I think from the attempt to regulate the derivatives market in general is going to be a monumental task it's the last I saw.
I read a stat the other day that it's a 450 trillion dollar market.
And that's just absolutely enormous and to come up with regulation to protects consumers.
In that market is going to be incredibly difficult just a lot of paper to -- capsule.
So you know if there's talk you know knew risking capital requirements.
At the banks there's talk of you know making you know having some of these banks have skin in the game reservoir.
To hold -- to the mortgages called into court -- each other if you're gonna sliced and diced in package did not deserve credit union default or sorry in the collateralized debt obligation or.
Or some kind of mortgage backed security that you released key part of incidents.
I guess he -- -- trying to stop people from let's -- -- -- from giving out alone they don't think it's gonna get repaid in packaged up and -- to someone else to their.
Record of taking money while people can still pay on and then making money on the security team to try to cut that out yet not that any bank would do that it's good but.
You know that's what it's a great point but -- I've seen some counter arguments that.
A lot of these things got into trouble by taking risk and now you're almost legislating them to maintain some of that risk on their books.
And -- instead of -- it out.
So don't let them and well I would say I would argue that you know maybe it would be okay for them had set out and -- the real question comes down to how do you actually monitor.
The hedging all of those positions as he's he's like I said it's a forty and fifty trillion dollar market.
It's going to be really difficult and you don't want to balance sheets of these banks and determine how they're gonna actually know whether they're hedging -- or -- -- yeah.
Talking about -- and indicated they may -- -- what this is exactly why this regulation is very difficult but if we're talking a different sectors a lot of our our viewers are writing and talking about different sectors they thought were most exposed need to be fixed in housing has come up as the reason -- -- -- -- -- -- risky -- A lot of is risky acts as simply tied back.
To mortgages and housing market sensitive repairing.
You know going in and try and fix the banks and six how they're gonna work with these.
You know funky different assets other -- they've created themselves in the foot in -- the financial innovation that has been and why not just focus more on housing.
Well absolutely and I think one of the aspects that hasn't talked to much about with regards the regulation is great new regulation on the credit rating.
Agencies right and a lot of the issue I would argue came from.
You know a lot of these some mortgage backed securities and other derivative instruments were highly rated by the -- and -- said.
-- you know it's it's some kind of strange alchemy to take.
Sub prime debt.
Put it all together and suddenly it's Walla AAA exactly and then we have it's got people here are saying is that may -- some of these guys should be prosecuted I'd that maybe taken -- -- for further -- but.
They were summoned to should be looked -- Right absolutely and and I think that's it and it hasn't been talked about too much at least over the past week.
With regards to what the regulation will look like and who's gonna regulator heard some talk that it was going to be the SEC it was gonna take on that.
That role and I think it's a big issue because you know a lot of us there there's regulation in that -- a money market mutual funds have to hold.
Highly rated securities and a lot -- -- securities are rated AAA right in reality they weren't.
And that that's a big risk -- that the regular investor was taking out without even knowing it.
So that's certainly something that is -- and my guess is gonna get brought up the brought out more frequently over the next six months as this to be kind of.
Takes -- yeah I mean in your savings account was -- a huge risk that you need to know exactly and money market mutual funds were considered by a lot of people -- savings account of -- in reality they weren't.
We don't know the hardware -- -- absolutely absolutely and and you know the big money market fund that.
Broke upon the reserves and reserve fund held Lehman debt and that was a big reason why so amazing yeah -- -- this meeting via the website as well console yet it's.
Born into wealth dot com okay cool that's -- -- a happy guy had a very much especially in comparison and it's actually been in the -- having us in the -- so easily.
Both both different to different has been inside and outside.
Enter your career got a great to have you thank you very much -- you know I even hear it at some online I am free under free.
-- certainly isn't Weis needs to be free but we're gonna find out more about it.
I now they may not find that it's funny.
And it I think it will probably -- that is -- -- -- having -- time.
Critics say -- -- exchange cards and information here so -- But we're just doing that the markets have -- the downs of about 78 points right now it's really held -- to these levels over the last couple hours and you didn't Geithner was on Capitol Hill talk again.
I continued to talk about regulation and reform in the systemic.
You know the drill probably by now unfortunately it's been on anything and -- -- -- to rest later on.
They are and why we're gonna we're focusing so much on the -- -- let's not lose site you have like consumer stocks that were faring pretty well yesterday in health care.
Has really we've talked about -- yesterday -- The stocks continue to do really well and you're seeing some notes -- -- one from BMO bank of Montreal and advisors and talk about.
This is saying now that they think that you know president Obama's health care plan not only is running out of -- it looks like it may not had reached congress to laughter.
July 4 but.
I grassy mall galaxy really seeing huge row I think percent and this -- made me really -- is that some of these -- company stocks today.
A pregnant and -- -- unsatisfied I can't you see the next few times and everything to get idea that he and a paycheck -- packing.
You know pat I just kind of Beck's show -- something like that good.
I felt I could hold your -- We're -- I didn't let actually put -- security.
-- -- -- -- I took a lawyer is CEO of Edgar online would explain yourself up.
They -- much.
Home so I draw a line the company that provides financial information -- -- to investors to individual investors we were the first company.
To take SEC filings onto the Internet come back in 1996.
We democratize access to financial information.
Jeffrey editor -- and -- -- name implies it is free of charge.
For some of the videos have the pace sort of as well let's talk a little.
I guess if it is looks -- -- and his credit card -- -- -- -- -- -- -- Yes and can you just talk a little bit more about it you've got the free at your service.
It offers access to SEC fines and you have the paid service sort of the -- someone is not familiar with -- tell us a little bit about it and what differentiates the two products.
-- -- we don't look so.
Since about 19931996.
Companies have been filing documents like this -- -- SEC.
And so you can go online you can get access these documents are free.
Well but if you want the information inside of here that's resort pending for four more information -- -- -- the subscription.
-- So heavy that we went what is it what is it like during this recession and what people want it to -- -- a lot of people don't want to pay attention -- what's -- -- -- information is the is the raw -- -- Financial industry and so we need more information.
You know one of the things that we specialize and it's -- technology it's called -- -- Well I brought with me.
The reasonable when I brought with me so distracted this is a toxic gas.
If you've never seen mortgage backed securities this is -- facts.
So yeah this hasn't and I won't -- all the loans that are being a mortgage backed security.
It was you should buy Merrill Lynch.
Is -- city group annual financial floor anchor and it paid back right and right here and this is 1376.
I'll give you a hundred dollars you can find a loan that's inside of there being here.
Within the next hour.
It didn't solve the problem.
One of the problems that we saw when we specialize in and that we encourage the industry that would try to encourage the industry and regulators move to.
Is not require more of this.
Because there's plenty of reporting there's plenty -- reporting -- executive compensation section of this document.
Is extraordinary truck that fit inside -- there but it's on legally is this really hard to Parse through exactly.
-- I -- it.
I don't know who actually understands -- and quite frankly based on what happened in the market didn't want to that maybe part of the problem you look at the triple trailer -- still -- And trying to get people that I hadn't had interstate thirty but yeah so where it is like he's that looks like -- excel -- is over now look at this is a particular happen.
And that an order that.
And -- -- wanted to know really the true equality that you have to go through each and every one of those and -- problem fast -- the loans that's exactly the thing you.
Get a direct airliner service -- for congress.
-- and we spent a lot of time with congress -- -- -- OUS and talking about the fact that it's not just about more reporting.
It's not just about more regulation.
Our regulators are outgunned.
But this sure you know there's thousands of banks something that looks like this aren't strong and right in having got to date total could -- I'm not looking for conspiracy theories that the same time I think they've.
There's a limited amount exclusive group that can actually understand and and play them then it can't keep certain individuals out I mean this is the just the nature of -- and our -- Premises that if something's publicly traded if you're socializing risk -- you better democratize access the information.
You have to be able to provide access this information for every one.
Which is what our company was founded on what it's bureau US is about it is what what they you have to move to some kind of a format that people can understand so.
Tell us a little bit about wolf we're talking tell -- what XB RL list -- a lot to me that notion of what that stands so if you could imagine on Monday.
The SEC after tremendous amount of work over a number of years actually what we're looking to cut by the way the same time it's requiring the company to actually file in addition to this huge document.
The small little packet of data.
-- -- -- data would amount is less than than a song the size of the song on the iPod.
On what it actually contains every single fact -- inside of this okay -- and so it actually makes it easy for a consumer to pull up and say what is executive compensation for Citigroup.
What the credit card fees they charge you know what is their pulse you'll use of the corporate jet and executive compensation wearing those sorts of things instantaneously because.
You don't have to page through the thousands of big -- -- this week branding and that this committee Nancy C three days ago -- Monday Monday minded sort of and so little.
How do you see instantly -- -- -- -- -- have access to it.
So the short answer is yes on on the sec.gov you can actually go of this company started to -- and so this is a phased in introduction.
Second quarter -- his.
-- you know it's very it's extraordinary gonna have a 500 largest companies in the United States basically 86% of the United States market cap.
He's going to be producing more information.
For investors than it has ever been available before in the history of the financial industry.
Tends to be coming out of form of the can be consumed finally as opposed to something like this now how does it benefit your company and other competitors.
So we actually we -- an early investor in this technology we we took every single publicly traded company for the past ten years and converted their format they're their files into this format.
-- advanced this.
And so a lot of people come to us in advance of this and to look at the kind of information society here at a level of depth it's just a match and we also help companies that have to file in this format.
We help them say this is how you take this and turn it into.
It's a who would -- competitor being there was to stop Google or somebody from coming in conservative you know -- It's getting all the books in want to scan of the documents -- out of.
-- it's not just -- -- you have to accounting decisions and so it's not just as easy as indexing words you actually have to say you know treasury stock has to be that can't be negative.
You have to -- interest outside of liabilities.
Those sorts of things require a little more intelligence from just before computer technology of course of that information.
I'll -- the the competitors.
Our traditional information providers the information was sort of -- Parsons information to a few data elements and I -- charging thousands and thousands of dollars to get access to that information.
And so this really is you know we're about trying to help companies get their information brightening that you know investors here if -- -- -- I was gonna say it felt all due respect I mean.
Not the most exciting -- talent.
Wise you land -- his business.
Home you know I spent a lot of time seeing that -- decisions will be made.
How this whole concept of mark to market accounting that's purely based on what the fear and greed is in the marketplace that we professionally either.
-- and I saw companies like I was at Microsoft fifteen years there's been a lot of time the technology industry has spent time in the health care industry.
In the same kind of data problems we face -- -- -- curious who were trying to move to electronic health records I don't believe people realize we -- the big six the same thing in the financial.
His -- Danny was just joking on the board saying it page and I thought it was a new health care bill you're looking at -- here.
Probably think they I didn't even -- is maybe when.
Stimulus bill for the country's only eleven herb page is about to hear from the Citigroup can get -- and testing facility move into something like health care what is that another opportunity outside.
There hasn't -- an answer to her or even getting to businesses like.
Because of benevolence and this is a great position to be an and he had a technology -- -- -- a lot of immediate access to a lot of people she's a great -- that means not having jobs.
So I want -- html changed publishing industry.
And I view X -- the same potential change for the financial reporting industry.
And so I look at this I know there's -- -- extraordinary opportunity for our company was an extraordinary opportunity for investors.
I would commit those two things happen that's a great thing if it's professionally for -- and it is -- -- -- to have access and analysis about expansion plans would you.
Move it to a health care or something else where you're looking to.
Document records and make it more easily search was at an opportunity for you -- gloom over the long term potentially yes but we're really focused on is there's so much work that's been done across mortgage backed securities municipal bonds crossed the equities marketplace for us -- credit derivatives across.
You know hedge fund reporting for us and we could just keep going there's hungry and they could say one -- regulations are -- they could be a growth industry legend heading for the reporting and Starbucks I gotta get guess that's good for your business do what sort of obsolete before -- -- in 1999 this was -- 265 pages.
Post sarbanes Oxley this when it's this much convinced -- -- because people required to report and disclose more.
They -- and that it's that's the point we keep making is that people are disclosed an extraordinary amount of information you'd be stunned as to what's it's inside the -- -- -- people reporting it's just on considerable today.
-- oh believe me a type that we know -- their sales levels that you feel like you've reached a saturation point with the information did you feel that way sometimes it's just it's so much is overwhelming him and that's why you know we need to issues like it's medically get this isn't what we're watching this morning mortgage backed securities how many thousand.
-- -- -- and independent streak while.
A report things I keep saying what do you expect from we do we can find reason why we -- there's target some of tort -- because nobody can I -- he's.
But this is fattening though thank you so much for Kenny yeah added that run back up -- certainly appreciate the honesty of Edgar -- effective advocate for him to check out that I think next time we're gonna CDS and.
Yeah I -- in the us that is made it worse and I think it is my office right NBA now I didn't be -- They see it that way I'm sorry can you please call that the duffel bag in which you bring their -- and the biggest hit seven -- -- -- -- didn't seem concerned right.
It works -- Atlanta.
Mortgage backed security -- -- international -- put it on the you know a little memory stick or something in the locker room.
The -- -- I don't know it's much much more aggressive in the despondent.
That is facetime.
-- we are gonna talk about yeah get into the consumer protection part of this new regulation might not be.
What you think.
What is the little bit more about -- right it's like hey please -- he had we're talking a little bit more about regulation out that's extraordinary.
You know couldn't tell our producers right for ever getting -- and and and bringing -- and those mortgage backed securities because for younger used to kind of behind alcoholism as dusk.
I think it's I have read it break a game.
Today I didn't see appreciate that nice guys and I will not touch it and then you get a courtesy I haven't even thought I was trying to -- -- this sort of thing.
A gentleman a lot of -- -- -- -- he's Dana left and mindset.
-- -- -- -- Let's get -- -- -- -- Group do you shut the superstar -- a lot and that they had that design is that correct.
Closest to right close pretty close and have -- very close yeah.
Yeah yeah we -- -- talk a little bit more about regulation an annual limit things that I think he really picked up again the key point.
They did the regulation is to make sure that there is fewer ways -- pose a risk.
To the entire system systemic risk.
What do you think poses it as systemic risk -- -- you know right now.
In the economy.
Couple of vantage points intend to win systemically important institutions -- risk.
I think part of the problem right now is it's you know -- lack of clarity and run walk is considered systemically important.
What metric do you actually use what assistant -- the important what do you steadily and I over the security investments days.
So it was a pleasing -- should be.
I think it should be you know it depends upon you got to recognize that he talking a bit of -- divorce financial industry.
I think to what extent you can say hey.
Any -- could be there are hedge fund that country it's more than a -- a lot of trading volume -- a -- product to -- class should be deemed systemically important.
If you're -- -- -- trading more than 10% off that -- Notched -- equities on the NASDAQ exchange every day you should be considered systemically important.
So it's not just the definition off let's say it -- to -- institution being important don'ts of the capital base that institution has.
But it could also mean a lot of trading activity -- name of activity in any asset class a product market.
Yeah I'm not view the changes would mean that medicine I hear that hedge fund industry to maybe political scene and -- looked at securities as you mentioned.
It doesn't body and then now that man in the interest so what hedge fund has her firm has -- and certain part of the market doesn't change I don't mention I -- daily basis.
-- actually actually that's a great point it actually does but -- look at if you rise above the noise and look at the long term trends.
This a pretty clear trends in terms of who plays a major role in what might have institution can be considered.
Systematically important over time.
I'll give -- interesting anecdote here in terms of -- are -- fact all right.
Who's going through some more Federal Reserve testimony last couple of years.
Have you discovered that in one of the testimonies that Timothy Geithner before you to -- Treasury Secretary talked about -- The tremendous structural change in what was deemed to be structurally important institution -- pick and it's his 78 years ago.
So back in 2000 almost about 75.
Percent of the US financial assets -- of the banking sector.
And their fourth -- and it fell under the jurisdiction of the Federal Reserve.
Which meant that meant the -- -- -- activity could actually make -- -- off on three quarters of assets in the US financial system.
By the end of 2007.
Only about fifty cents on the dollar was being had a -- -- traditional banks.
Fifty cents in the dollar fence outside the banking sector it was hedge funds it was a large investment banks because.
-- asset backed commercial paper.
So that the Fed acted in 20082009.
To control system at risk.
It was only -- half the market.
-- look at the proposal that came out yesterday.
At the last couple of months there's been a move towards bringing -- the assets back under the Federal -- forward.
And therefore the veterans of having more impact on a larger part of the financial of the capital base in the US -- it has been over the last statistic seven years.
Yeah we saw that two went with TARP last fall right because all the the Wall Street firms did the survivors anyway had to convert.
To bank holding companies today would then be under the auspices.
But that the Fed and treasury to get this money as opposed to being part of that shadow banking system neo traditional investment bank.
Do you think that was part of that the reasoning here is like if you're gonna take money you're -- I'm gonna be under stricter control and and are they -- -- gonna be a little bit loath to give up.
That control even -- they're they're paying back TARP money in some cases like -- Morgan Stanley or Goldman Sachs.
No I think even after that -- back the TARP money I think the new definition off.
You know what is considered systemically important.
You know you've got that pretty bad enshrined into the -- -- those -- -- -- -- mind and the government's mine site -- I think that's not gonna go away.
And if you look at the proposal that came out yesterday very clearly gives the Federal Reserve responsibility.
All of our -- that it considers systemically important what exactly the definition might be a systemically important institution.
Is probably still need to be defined.
What's important is going for -- the Federal Reserve -- to oversee the banking sector.
He's actually -- oversee any form that's deemed -- the importance of -- it gave it back TARP money and not does not make any difference the government could have apps you know control.
In terms of equity investor control over you.
But if you consider to be system -- be important for the US financial system.
Well guess what you gonna be over by the Federal Reserve so that's a big change for.
Yeah I think I think you're just saying -- -- exchange for firms that traditionally never fell under the -- of course it reserve you know Goldman Sachs and Morgan Stanley being fine examples and over the bank according come.
Yeah but one cannot go to that you need to -- never understood -- broker dealer presented AIG right they're trying to cast a wider net just in case something like you know insurance companies.
You think god you know for your your traditional insurance policies suddenly they're riding off you know trillions of hollers in not a credit default swaps.
There are basically unregulated you know not by that the Fed under their auspices so they're trying to cast a wider net.
It -- to capture these is that is that the intent there and do you think that's a good thing for the Fed to do.
That is -- intent and -- thing that is you know net net a good thing overall for.
-- -- regaining some of the loss of investor confidence and improving the stability of the financial system.
I'd like to just in you talk about one aspect that we haven't talked about in terms of these reforms and -- of bringing these bombs within the purview of the Federal Reserve.
It could possibly lead to a lot of unintended consequences.
For example bringing you -- responsibility -- for example as -- types of farms within the Federal Reserve.
That is -- dramatically impact the competitive positioning.
Off in different categories of financial phones -- -- each other so how banks compete broker dealers was as hedge fund those disaster management for the insurance companies.
As good as it up pretty major implications far the positioning of the compared to strand hall forums within a certain category.
So it could dramatically change for example if -- -- systemically important foment -- -- Stanley.
You -- it applied before and allowed one of capital in reserve.
Under Federal Reserve guidelines and its -- broker -- regional brokerage -- like Jeffries all our formal that size.
So that could have pretty major implications for how these -- compete with -- each other.
And what the growth rates might be in these in various -- the finances of this is second -- former.
-- listen I ended and inducing interview with the former governor attorney -- New York Eliot Spitzer last night and his perspective on this was that.
That is really the regulatory reforms that are being put out there really don't.
Making that much have a difference at all the powers that are being deemed to -- it -- to begin into the Federal Reserve for example.
Are just -- -- they already have it's more about.
Maybe an enhanced to make over.
That powers it if it happens then but essentially the powers already remain there and if we just went back to the intentions.
-- each of these different bodies that overlook the financial sector in the economy overall.
We would have our answer we don't necessarily need this.
This acts regulation -- may -- enforcement.
-- -- it that's it that's it that's a good point and clearly not put an industry has that view.
If you look at the proposal that came out and I think it's very important -- -- -- at this point it's just a proposal play good this is becoming -- political process and we've got to wait for the next couple months before you know all the -- -- a walked out once this -- through congress and the final thing that we have.
And then in comes up what will be using as a blueprint for the financial system going forward and it's a couple of months on the mind might look very different in the way look at.
You know 1250 in the afternoon yesterday and the president -- But I think to the point that you made about what -- -- Spezza said.
Our perspective overall it is that yes you know this is short off sweeping change.
-- -- -- regulatory landscape but I think you could collectively look at the changes responsibilities.
Given to the Federal Reserve.
The creation enough and you put in the protection agency.
They -- -- -- the Office of Thrift Supervision.
If you look at all those individual pieces you realize that it's you know one plus one equals three kind of situation that -- -- net impact the entire industry may be a lot wider and broader.
Then each one of those individual thing stands to instant and it tends to mean and in our -- it doesn't really mean that -- never -- kind of expected and assumed.
That people that I have a major change in comes up you know something as dramatic as.
The SEC's responsibility.
You know what go down to half its level of response -- last ten years clearly that has not been in the proposal.
And you see more off reorganization.
Off today's regulatory agencies right what's is a massive restructuring which I don't think -- frankly need it.
I think they have a -- -- enforcement like you said is required but I think -- Some of the changes that have been made to the Federal Reserve's remic.
I'm an address some of the issues we've been looking at it comes at a loss of investor confidence.
And instability in the -- of -- -- -- US financial system.
All right well we will definitely see every time any -- shot -- -- -- so much for joining us from the tower appreciate your time here on this Thursday right now.
We're gonna -- thinking about it -- little and taken and let it.
-- -- Markets a little guy right now up 68 points on the Dow.
-- -- -- -- You know we talk a lot about the big banks to talk about the different government agencies we -- a lot about the administration we talk a lot about the media but there is a big group in between there's more than 8000 makes in the country right now a lot of them -- community banks a lot of them are just haven't -- -- there and yeah at your corner.
So this is why this is great to have our next guest says this -- dirty air is the and Ice-T B a senior vice president IC DA is -- independent community bankers.
I've America and Steve we haven't heard a lot of that into perspective from -- good grip so why -- take it.
I'd take you through what what is your group think is good about this new regulatory reform what he -- what is the group opponents.
Well our group is.
Looking at this -- -- pretty carefully and it is a -- it is a mixed bag of course are.
Our banks were the ones that you know remain now safe and sound pretty friendly to the consumer self.
I appreciate the plug there is a community bank and in every community so.
You know go -- -- But -- in terms of the overall proposal.
If you know there there are things and it's that that we like things that.
That we don't like there are some things that were left out that we're happy there were left out and things that were left out that we wish they could be put in so.
You know -- the administration's gone.
Some ways to strengthen in this systemic risk regulation we think that they can make gets stronger by impose any -- specific.
Oh absolutely yes I think -- as far as the resolution authority that the FTSE would have under this.
That should be pre funded there should be a systemic risk fee that would a build up over time so that the taxpayer wouldn't be on the -- for.
These major problems.
We think that the any bank that's associated with one of these systemic risk companies should pay a special -- into the FDIC and congressman Gutierrez of Illinois has a bill that would do just that.
Those are things that we think there are very good.
Ideas that could be added to this we do like the administration's requirement to increase the capital.
For these systemic risk institutions because they're gonna be identified and then so they needed they need to pay those fees than it did.
The increase their capital may need to have tougher regulation.
So we need to have that.
In terms of things that they're not in there we we're very pleased that the administration did not.
Decide to amalgamated all the safety and soundness regulators and the one shop that actually.
The that the system we have as far as community banks are concerned.
Has worked quite well our banks have been as safe and sound and are still out there providing services to their communities so.
We didn't need to get into a needless fight over -- in the boxes of the regulatory agencies we need to focus.
As Treasury Secretary and others have said need to focus on where the problems came up and I was amazed.
Systemically -- He institutions -- my question from Tom in north Carolina's throughout writing and saying.
What kind of protections do individual community banks need from the -- out there and those so called systemic systemically Rio.
Important -- risky institutions.
Well I think -- to be they needed.
Work under the same kind of regulatory system the tough regulatory system that we have so we're really looking for any protection from.
The -- there are folks are very good competitors out there in their communities but we don't want them to be operating with less capital less regulation.
And less protection from the taxpayers are banks -- are extremely upset that.
They're too big to fail crowd they get bailed out.
On you know perhaps even on a Sunday afternoon but on Friday afternoon.
The too small to save institutions they get close down -- the FDIC.
That's not protection we just want equity.
Is there concern that I mean this designation too big to fail.
Maybe -- -- some firms to get bigger and may keep some firms figure who perhaps should be shrinking a little bit.
Well that's why we think that the program could be strengthened by the by the addition of the fees -- We think that the the program as it exists and as it can be improved.
Could really discourage banks from being or other institutions from becoming too big to fail higher capital that's -- -- discourage excessive growth.
Increased fees -- to have the same -- and we also think that the 1994 limits on deposit growth.
Of the institutions that should be toughened up and -- systemic risk regulator should really have the authority.
Two to downsize institutions or.
And and also to.
To prevent the amalgamation of these these monster institutions so.
We have identified a certain number of institutions as too big to fail and we -- -- is part of this plan counteract that with very strong measures.
Let's get you know there's been a lot of criticism of the office -- thrift supervision and its lack of supervision over a large part of the financial sector.
I went and did the note says reading that for a man here.
Saving your your your group -- is that.
You would like that you're really looking at did the merger between opposites or supervision Office of the Comptroller of the Currency we talked to John -- we should mention last week who heads that.
Asserting that they should the federal stripped of thrift charter.
Should still survive why -- why did federal thrift charter why do you see value there.
Well let charter does have a good focus on I'm home lending and consumer lending and -- Some of our institutions they they've had a charter for a long time they've operated safely and soundly.
Where that and they would like to.
For it to remain in place I think the but the problem you alluded to which is the the problem with AIG.
The administration's proposal would really take care of that by saying.
The Office of Thrift Supervision may not be you know that -- the place to to regulate AIG.
-- -- and -- it was countrywide was watching the usual line it was there was so many.
Yeah well they did in some of those institutions were were so large that they posed a systemic risk and so.
And that's why we need -- separate systemic risk regulator to say.
You know the bank the bank regulator the OTS CO CC they're not doing.
As you know a great job maybe was Citibank.
In the case of the SEC but let's look at -- at the systemic risk of the bank itself or indeed the holding company that's part and no that's the -- beauty of the administration's proposal was it does.
It does provide that kind of a backstop for.
For a larger institution it might -- that kind of risk.
This -- what it -- so what are the feelings among folks in your organization.
About Glass-Steagall should -- come back should we separate investment banking and commercial banking once again.
Well I've heard that I've heard that suggestion and you know I love to tell -- so because we were out there arguing against the repeal glass deal.
And that a lot of a lot of the so called Smart people around town said -- you guys are -- kind of backward the year out of date well it sounds like we were.
We were not backward we were ahead of the curve and you know I may not -- it may not -- Politically feasible to.
To reimpose Glass-Steagall but I think systemic risk regulator congress ought to be.
Looking very carefully at at the kind of linkages that we see exposed in this current crisis and and maybe.
On you know a case by case basis or on a blanket basis say.
You know these kinds of functions this kind of financial services ought not be linked in an ownership manner -- -- kind of financial service.
And this or whether it's Glass-Steagall under that name -- You know more contemporary set of sponsors.
You know that's that's left in the congress ought to look at in terms of maintaining some kind of credentials separation between.
Types of functions.
RAI ST thank you very -- it's great that it perspective from the community bankers association and -- -- make sure -- it contains continue to be included in this discussions at thank you so much.
After joining -- laundry had a very good -- thank you don't nobody -- a question on the board about what do our viewers think.
-- -- What poses at systemic arrest and had a -- the first answer government.
What -- that.
-- my next guest went in hosts in the creation and the consumer financial protection agency.
Why didn't that it's.
We're gonna -- and find out yeah.
Just a minute -- Think that we'll be right back.
Well -- Scott -- is joining us now skies at the senior vice president for government affairs for the financial services roundtable I got that says reading off fed.
-- release up the roundtable about the round table being opposed to the creation of consumer financial protection agency.
Why don't why would that.
-- Her -- -- let's say we need reform the system we applaud a lot of reforms that were posed yesterday.
Number we're talking about we're not -- not more regulation lower fourth more effective regulation.
And -- four protect consumers but creating a separate regulatory agency out of whole cloth.
Moves in the opposite direction.
What the net effect of this proposal will be used to separate them -- separate out the regulation of the institution.
From the regulation of the products -- -- of the two regulators under that scenario would only have half of the picture.
The -- really go hand to hand as they currently are.
To make sure that the institution is safe and sound as well as consumers are safe and sound.
And so -- we would rather see instead of creating a separate agency is strange thing to consumer protection departments have already exist in the federal banking regulators help shore up the system.
Who who who would you strengthen.
Well the Federal Reserve the OCC the FDIC.
-- always easy after the I would say Clinton how then -- -- -- gifts and we're looking Clausen that they consumer in this equation is is -- because it seems like the consumer is the one.
They matter why that is forgotten in all of this you know.
What so if so why would -- turn back to the existing institutions.
What -- I EDC within them.
That can be approved and I didn't.
I disagree advocates who is have been forgotten in all of this -- very -- part of all listeners usual -- -- on the and we've got invited that time and seeing -- our viewers feel -- down a conversation me he would listen to Tim -- if you listen to the president.
And they -- think -- did I mean it's out of their intentions are and there.
But indicated that consumers are not getting funneled -- despite hitting it with a stimulus package and then we'll get insight on the same money and that the banks are nor the same air time.
I nor the same type of priorities should that tell our viewers a feeling that it.
We'll all -- I'll let the viewers take up an administration but I would remind him that there was a stimulus package that was passed directed towards consumers and towards small business owners and strengthening the economy.
But let me go back to your original question.
That the difference here is by separating out a -- creating a new agency is a worse proposal actually weaken the system.
They could have a stifling effect on the creative and creation of products and the pricing rather than beefing up the current system so it's a matter of which one is better.
And more effective we believe -- the current system is better than creating a whole new agents say how much like that that agency.
Both simple football but let me just finish up that's created a new -- she's gonna cost money so who's gonna pay that the institutions the individuals those are going to be attacked some products.
How we cover the cost of that new regulatory agency.
And that those costs would undoubtedly what will cost would increase the price of products as far as beefing up the existing regulatory agencies.
-- that the president has proposed a number of principles that can be used across products and the industry support of those principles.
Help guide the agency's existing regulators as they examine new products and examine practices to ensure that consumers are protected.
The first big piece here and there is a silver lining to all of this is to help strengthen consumer literacy helping increase financial literacy.
And help increase -- reliance on savings and investments.
And that's been the same great Americans woefully inadequate.
And illiteracy rate needs to come up we need to increase both of us and we'll see an increase on both those areas going forward.
OK so addicted consumer protection agency part of the play anything should be taken out.
But that correct and correct today it goes -- -- -- about it -- -- -- why why would we trust though.
That there could be proper enforcement.
It's still within seven that the credit card bills and things that are out there that are they're supposed to have -- the consumer from seven the outrageous practices that it happened.
Over the last several years.
How can you be sure that the funds are and the proper manpower and proper talent.
If any existing.
Institutions and in it in the existing agencies that are going to be able to provide the support that the consumer needs right now.
Well let me ask to your question around is if you could argue that the current regulars made mistakes which I think is that the crux of your argument what's to say this new agency will be infallible.
If we -- to take out every regulatory agency never made a mistake we would have no regulators left in Washington.
The point is is which of the two systems is going to be better for consumers and we think -- -- the existing system which you have the -- -- primary regulator has it has supervision over -- and -- -- -- enforcement authority they have the ability to to really drill down in years' experience and.
Saying this is creating a new investment take that not acting in six different surrounding listen let's answer the question at hand if the -- broken down.
And -- -- said that he can fix a car -- -- -- now you need to fix a car 'cause broken down.
And -- take it into the same auto -- shot you time and time again is still not getting six.
Then what police didn't believe -- they should take it a third and fourth and fifth time why I think that you can actually improve.
The same place that you've gone to the last several times.
I have a feeling one way or the other about it is what the consumer to have the best protection possible.
So what I'm asking you is why do you have confidence to return to the same site -- even try to fix it why -- why do you why do you really believe that the tools are there to do that.
Check the first ball who's to say the shop next door to -- -- -- through it any better.
And that's my point is that the new regular may not be any better secondly what we're focusing on -- strange thing that -- it's not going to be the same shop.
We're gonna focus on increased principles we'll have increased staff of increased budgets and almost fully fresh attempt to keep that better.
Doesn't -- not as much marginally it'll be much less much less much less expensive.
And more importantly -- to to focus on the regulator as we move through this new into this new system will be able to see the institution.
That's that's going to be all cars as well as that particular car so they'll have the ability see the bank as well as the product.
Think keeping those two together is a better system -- separating them out into two different agencies.
City do you feel that the that the Fed.
It's the right in entity I guess to take on greater power here in the regulation is an -- it certainly seems.
That a lot of the eggs are being placed in their basket so to speak.
Yeah we think the Fed has the right person for systemic risk regulator to oversee the entire system.
As well as monetary policy continue their role as consumer protection agency.
Four to products like mortgages we think the SEC makes sense continue to roll its consumer income to consumer -- for credit cards.
The FCC is continue to roll for mutual funds.
Those are all of -- that's where the current system -- solutions trade finance system running creating a whole new one now and dinner come -- not more regulation but more effective regulation right.
Know what the Fed becomes more than a scuba -- some say.
What's the check and balance there with them you know going in and deciding that SM company he had no longer it you know does -- some kind of systemic risk.
In some way shape or form -- it certainly seems like a lot more power.
Given to this.
Quit with the power and they came in the proposal -- saw yesterday there are a number of checks and balances first the ball.
As part of the systemic risk regulator the Fed will be part of -- council that would would coordinate with all the other regulators before declaring an emergency -- before declaring a particular institution.
Secondly the Fed has right now called section thirteen three of those -- its emergency powers but what did -- the authority to act if there's an emergency.
Under the proposal it would have to check with the the United States treasury before it could exercise those powers so -- -- these increased powers also comes the increased taxes increased checks and balances.
Which helps create a good dynamic.
And more importantly allows the agencies to share information.
About transit they're seeing him problems that they're facing which is the problem with the current system -- why we need to modernize what is it financial services roundtable do exactly.
There were trade association that represents the largest financial services firms in the country like well represented banks -- bank securities firms and insurance companies became alternate names as.
But of course Citigroup bank Citigroup Bank of America nationwide state farm.
All of these are members and so when he's getting your members at -- hat status at work.
-- -- had days on the roundtable we we abdicate their positions up on the hill.
I -- look -- -- regulated so we can.
Take -- -- -- associate -- it didn't most of these big institutions and we share your viewpoint and bought most of these.
Yeah we have a group an -- we got all the CEOs together we -- we developed our own proposal we've been pushing it for a couple years now.
And these -- the the positions that we've taken to what we're supportive out.
-- do you think your proposals haven't worked so far.
Department to have an intern and then this is like different idea and if -- an even pushing his proposals for a couple years now and then let what attending.
I was just really great I mean had -- been increased both the savings rate -- -- the financial literacy in America.
-- -- -- I believe he stated pushing for a couple years it seems that your -- pushing -- because you don't feel like you have an adequate.
And -- -- response for those things aren't always give it was so what what kind of what are you -- on the hill.
That's -- not -- you know maybe a challenge for you.
Well I think that dead increasing the savings rate has been great challenge it's difficult for people we live in a culture.
Where people spends more than they say.
And changing that mindset has been very difficult to go back to the Great Depression.
Following the Great Depression everybody saved everything and didn't spend enough and that didn't work that we shifted over to a consumer based economy -- -- spend spend spend instead of save some.
And changing that mindset has been -- has been proved very difficult -- a lot of efforts up on the hill.
To increase financial literacy is a big effort every April there's an ongoing effort throughout the year -- our company's focus on it.
But it's been a towns and it's taken this crisis I think to -- Put a spotlight on the need to save -- -- -- for a rainy day because it's rain and and people turning to their savings are losing their jobs and -- they don't have their own means financial independence.
Through their savings.
You planning and looking at everything they can you -- -- had -- advocacy groups at all.
I'm sorry deep aren't really any consideration -- do you partner with any consumer advocacy group.
We have we joined with a couple of consumer groups to try and change the way credit card debt nice handle from a regulatory standpoint to give more relief.
To consumers who are struggling to pay their credit cards right now.
We work with consumer groups as -- non profits.
Focusing on being the financial literacy -- leave the roundtable of the yearlong effort called community service so nine we do it every it would just change them the last digits.
And where we focus on efforts across the country will all of our company's.
Sounds great Scott yeah president has -- -- -- for the financial services roundtable.
Think it's all right well thank you from.
This legislation and yeah a little bit -- -- and -- giants like.
Let's do that I have is that -- -- team that finally.
Somebody should Bonnie judge she's funny at the NASDAQ is here tonight that we talk that practices -- -- like you had just got on Twitter.
It's my understanding that that's -- -- it for you.
I have a pretty good time at -- certainly I'm probably having a little bit too much time I'm a little bit too much time on Twitter don't -- on -- -- we're not telling anybody don't tell anybody that joined me on Twitter thanks in body -- -- -- talk about a lot at tech staff of course today.
British shake things up talking about something that may be a little bit more fun and interesting -- gadget lovers out there the whole Smartphone.
-- that's going on in the entire industry right now we've got tons of new fun gadgets that are gonna come out.
This summer Research in Motion is announcing -- announced a new Blackberry -- -- which is.
Gonna be just an updated version featuring the best.
This feature is that many of the other blackberries -- we've got Big Apple.
Three G assets coming out tomorrow and then next week we're expecting to hear from global.
-- brand new android phone that's going to be called them myTouch three G phone I can't keep up with all the names.
And it we've got Chris that Humphrey.
-- here in the market guys this is a great time device on an even if you're not in the market just around by focusing got some cool stuff going on right now.
Yeah we do it what sort of buzz is building up.
Yeah I covered the iPhone launch last summer -- those quite a bit of people camping out everywhere -- they ran into a lot of technical problems everywhere sinking at the same time iTunes.
You hearing a lot of built up ahead of the 3GS and how are they ready -- out.
-- of this explosive this managing things going on a -- as you know yesterday was it big iPhone software update yesterday and there were some technical glitches.
On the web -- the you know what people -- twittering me and they said.
Hey this is actually big marketing ploy to draw attention to apple that's kind of what I'm hearing from people on the ground there leases he has some kind of conspiracy -- if -- well.
But -- even expect perhaps perhaps some glitches tomorrow which turning on your brand new phone as far as I'm hearing all that -- -- Units have already been sold and then there's also a question of whether or not the eighteenth -- network is upgraded an -- where it needs to be so there is that.
But of course apple is apple and people are gonna talk and buzz about this company knowledge new gadgets no matter why even -- -- glitches and people still want what they want and you know people want the -- -- Yes but he has -- -- time in North Carolina has a very good memory.
And he was asking if you're ever wouldn't let us know what apple down -- into the downloaded to your Blackberry time -- -- I.
I was -- Democrat that.
That it's not really listen no he's during doing Twitter and you need to -- talk about it yeah -- is extremely important and it's you making the world go left.
He has a much better memory and I do I have since bloated probably 55.
I didn't have my -- is that and then after.
And then you know we talked about.
In -- case you missed this -- you can stream this particular.
I'm on the iPhone hasn't yesterday we have we debuted that we actually watch ourselves -- what's disturbing about the S and.
-- -- -- -- -- -- -- -- -- -- -- -- Just not trust that the sounds like a great hour of programming head.
The way it's that is reading anything else we'll have about a minute here he says people can't pay their bills -- they're gonna go out and via a phone.
Some -- I think it's being sarcastic and that I -- that right but yeah if it didn't -- these -- consumer discretionary items -- -- slowdown in the latest three session -- this is kind of budgeted it money -- and this is.
Not -- and -- a lot of people out there are shutting down our home lines are shutting down -- closing down all their other phone.
Means of communications it just consolidating that and it's one phone so it's not necessarily.
I discretionary item a lot of people considered a stable and they're willing to pay -- so that they can get their Internet -- get their phone and they can get everything -- one gadget that's exactly what these things as.
Or else you're paying a little different guys in you know you -- unless you're carrying the man -- -- on here goes -- But you know you it's.
Any time -- probably carried several and then yeah.
But -- got them diligently pockets in the summertime you know well let's and then and so you know I didn't -- -- -- finally got his.
Today I never knew Robert -- -- fashion content you know Brandon handbags even.
Metro sexual there.
I don't want to know about talking at a howling noise from calls until now there aren't that we're not that the defendant some words for me to have been done that's got Hazmat guys hey that's why they get -- I can't Texan running ads letter thanks tonight yes -- and eight Integra bank's business reports -- us.
I delay Friday but it's tricky thing with this Leon it's their later -- between US and all right CS by guys.
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