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CNBC TRANSCRIPT: CNBC'S "SQUAWK BOX" SPEAKS WITH SENATOR CHRISTOPHER DODD, SENATE BANKING COMMITTEE CHAIRMAN, TODAY, FRIDAY, APRIL 23RD

WHEN: Today, Friday, April 23rd at 8AM ET

WHERE: CNBC's "Squawk Box"

Following is the unofficial transcript of a CNBC interview with Senator Christopher Dodd, Senate Banking Committee Chairman, today, Friday April 23rd on CNBC's "Squawk Box."

All references must be sourced to CNBC.

KERNEN: JOINING US FROM WASHINGTON, SENATOR CHRIS DODD, CHAIRMAN OF THE SENATE BANKING COMMITTEE. SENATOR, GREAT TO SEE YOU. I DON'T KNOW WHETHER IT WAS GOLDMAN OR WHAT BUT IT DOES SEEM TO BE THAT THINGS ARE COMING TOGETHER. ARE YOU SHOCKED BY THAT? SHOULD WE BE SHOCKED BY THAT?

DODD: NO.AGAIN, UNLIKE HEALTH CARE THIS IS AN ISSUE WHERE MOST AMERICANS NOT ONLY GET IT, BUT THEY REALLY EXPECT US TO GET IT AND HAVING GONE THROUGH WHAT WE'VE BEEN THROUGH THE LAST COUPLE YEARS AND CERTAINLY

"SQUAWK BOX" HAS BEEN REPORTING ON IT ON A DAILY BASIS HERE, THE 8.5 MILLION JOBS, 7 MILLION HOMES UNDER FORECLOSURE, RETIREMENT INCOMES ALL OF THE THINGS THAT HAVE DIRECTLY AFFECTED CONSUMERS AND THE PUBLIC AT LARGE SO THERE IS A HIGH EXPECTATION WE'RE NOT GOING TO ALLOW STATUS QUO TO BE MAINTAINED. WE'RE GOING TO HAVE COPS ON THE BEAT. WE'RE GOING TO END TOO BIG TOO FAIL SO NEVER AGAIN WILL WE WATCH MAJOR FINANCIAL INSTITUTIONS GET THAT IMPLICIT GUARANTEE FROM THE FEDERAL GOVERNMENT THAT THEY CAN DO WHATEVER THEY WANT BECAUSE IN THE FINAL ANALYSIS WE'LL PULL CHESTNUTS OUT OF THE FIRE WHILE THEY GAMBLE WITH OUR MONEY AND THEN THEY GET TO SEE THEIR MAJOR EXECUTIVES PROSPER AS A RESULT OF THE TAXPAYER ASSISTANCE. THAT'S OVER WITH IN THIS BILL, AN EARLY WARNING SYSTEM THAT WILL BE CRITICALLY IMPORTANT. AND LET ME SUGGEST SOMETHING BECAUSE I'VE BEEN LISTENING TO YOUR ACCOUNTS HERE OF WHAT'S GOING ON WITH GREECE, ONE OF THE THINGS WE NEED TO DO IN ALL OF THIS IS AS WELL IS TO MAKE SURE AS WE DO ALL OF THIS THAT WE ARE NOT GOING TO STRANGLE OR SUFFOCATE OR CAUSE THE UNITED STATES TO LOSE WORLD LEADERSHIP AND FINANCIAL SERVICES. AND IT IS GLOBAL IN PERSPECTIVE. WE'RE NOT ONLY DEALING WITH DOMESTIC ISSUES, BUT AS YOU ARE REPORTING THIS MORNING AN EVENT IN A RELATIVELY SMALL COUNTRY FAR REMOVED FROM THE UNITED STATES CAN CAUSE MAJOR ECONOMIC PROBLEMS HERE AT HOME. WE SAW THAT A FEW YEARS AGO WHEN THE SHANGHAI MARKET WHICH REPRESENTED ONLY 5% OF THE VOLUME OF THE NEW YORK STOCK EXCHANGE WENT DOWN, I THINK DECLINED BY 12 POINTS AND WITHIN 24 HOURS THE WORLD WAS BEING ADVERSELY AFFECTED BY IT. SO WE NEED TO UNDERSTAND IN ALL THIS WE NEED HAVE BETTER CONTROLS, BETTER REGULATIONS, PEOPLE DOING THEIR JOBS, GREATER ACCOUNTABILITY, GREATER TRANSPARENCY BUT ALSO A FINANCIAL SYSTEM THAT ALLOWS FOR JOB CREATION AND WEALTH CREATION AND FOR PEOPLE TO PROSPER. IT'S A DIFFICULT CHALLENGE BUT WE'RE GETTING THERE AND I'M CONVINCED WE WILL HAVE A BILL THAT WILL PASS.

KERNEN: SENATOR. DODD I HAVE CAM FINE HERE. I'M AFRAID TO GIVE HIM THE MIC. IF HE TALKS, THERE MAY NOT BE ANY WALL STREET AFTER THIS.

DODD: DOING A GREAT JOB. I THANK THE ICBA. THEY'VE BEEN A GREAT SUPPORTER AND GREAT HELP. SO CAM I THANK YOU

FINE: I WANT TO THANK YOU, MR. CHAIRMAN, FOR TRYING TO ADVANCE THIS BILL AND WORKING SO HARD TO CHANGE THE STATUS QUO TO BRING ACCOUNTABILITY TO WALL STREET. ONE OF THE CONCERNS THAT WE HAVE AT OUR ASSOCIATION AND AMONG COMMUNITY BANKS AND MAIN STREET BANKS IS THAT THE SHADOW BANKING INDUSTRY, THE MORTGAGE BROKERS, THE FINANCE COMPANIES AND SO FORTH MIGHT ESCAPE REGULATION IN THIS BILL. I WOULD LIKE YOUR REACTION TO THAT.

DODD: WELL FIRST OF ALL I AGREE WITH YOU TOTALLY. YOU ARE ABSOLUTELY RIGHT. I DON'T KNOW IF EVERYONE UNDERSTANDS ALL OF THIS BUT THE COMMUNITY BANKS ACROSS THE COUNTRY, ROUGHLY 8,000 OF THEM, NEVER REALLY GOT US INTO THIS KIND OF MESS. THEY WERE VERY CAREFUL. GOOD UNDERWRITING STANDARDS. VERY FEW FORECLOSURES WHERE COMMUNITY BANKS WERE INVOLVED IN WRITING MORTGAGES. IT WAS IN THE UNREGULATED, THE SHADOW ECONOMY, THE SHADOW BANKING SYSTEM WHERE THE OVERWHELMING MAJORITY OF THESE PROBLEMS EMERGED. UNDER THIS BILL AS CRAFTED, WE INCLUDE THAT NO LONGER WILL THESE UNREGULATED ENTITIES WILL BE UNREGULATED. THEY WILL BE REGULATED AND THAT’S A GREAT ASSET FOR OUR COMMUNITY BANKS, BUT MORE IMPORTANTLY A GREAT ASSET FOR CONSUMERS. WHEN THEY GO IN AND GET A MORTGAGE OR DEAL WITH A BROKER, THEY WANT TO KNOW SOMEONE IS WATCHING TO MAKE SURE THEY'RE NOT TAKEN TO THE CLEANERS. THIS BILL FIXES THAT. I HAVE TO THANK MY COMMUNITY BANKER FRIENDS AROUND THE COUNTRY FOR INSISTING UPON THAT.

FERRY: SENATOR, THIS IS KEVIN FERRY. I WAS TALKING WITH CAM EARLIER. AS A MARKET GUY I WOULD JUST -- EVERYONE KEEPS SAYING THAT WE'RE GOING TO END TOO BIG TO FAIL. BUT WHY ARE WE WILLING TO LOOK AT MARKET PRICING TO TELL YOU THINGS WILL HAPPEN OR NOT. THE MARKETS WHEN YOU LOOK AT SPREAD METRICS DOES NOT PRICE THE END OF TOO BIG TO FAIL IN ANY OF THOSE RELATIONSHIPS ESPECIALLY IN THE RELATIONSHIP BETWEEN THE UNITED STATES GOVERNMENT AND ANY OTHER PIECE OF PAPER. SO I GUESS I'M SAYING IS WHY ISN'T THE MESSAGE GETTING THROUGH TO THE MARKET THAT YOU'RE GOING TO DO THIS OR DOES THE MARKET JUST NOT BELIEVE YOU?

DODD: MAYBE THE LATTER. BUT I THINK ONE OF THE DIFFICULTIES HAS BEEN THAT WE'VE HAD THE OPPOSITION TO THIS BASED ON A POLITICAL MEMO DRAFTED BEFORE THE BILL WAS EVEN WRITTEN AND IF YOU WANT TO DEFEAT THIS BILL, CONVINCE THE AMERICAN PUBLIC AND THEY'VE BEEN AT IT TIRELESSLY THAT THIS BILL WILL STILL MAINTAIN A TOO BIG TO FAIL CONCEPT AND OF COURSE ONE OF THE MAJOR EFFORTS OF OUR BILL OVER THE LAST YEAR OR SO IS TO DO THAT. ONE, WE HAVE AN EARLY WARNING SYSTEM TO PICK UP PROBLEMS BEFORE THEY GET OUT OF HAND. WE'RE GOING TO SET CAPITAL STANDARDS AND LEVERAGE STANDARDS AND NOT ALLOW THESE INSTITUTIONS TO TAKE ON THE KIND OF RISK THEY ARE. WE ARE GOING TO HAVE VOLCKER RULE ADOPTED IN MANY AREAS HERE. IT WILL STOP SOME OF THIS PROPRIETARY TRADING THAT PUT US AT GREATER RISK. AND THEN IF YOU BEGIN TO FAIL YOUR IN BANKRUPTCY WE ARE GONG TO MOVE IN RECEIVERSHIP, MANAGEMENT GETS FIRED. SHAREHOLDERS SUFFER. CREDITORS LOSE. IF YOU FAIL, YOU FAIL. I DON'T KNOW HOW MUCH MORE CLEARLY I CAN SAY IT. I URGE THEM TO READ THE BILL. THE IDEA THAT IT'S AN ESCAPE VALVE IS NOT THE CASE. WE'VE WORKED SO HARD. DEMOCRATS AND REPUBLICANS, PEOPLE LIKE BOB CORKER OF TENNESSEE, MARK WARNER PARTICULARLY ON OUR COMMUNITY, SPENT MONTHS WORKING WITH PEOPLE WHO UNDERSTAND THESE ISSUES TO CRAFT THE LEGISLATION OF OUR BILL.SO THE MARKET MAY NOT BELIEVE US BUT BELIEVE ME, IF YOU THINK YOU WILL TAKE ON RISK THIS WAY AND JEOPARDIZE THE ECONOMY AND BE ABLE TO SURVIVE, YOU ARE WRONG. BY THE WAY, IF YOU'RE MANAGEMENT OF THESE FIRMS THAT DOES THIS, WE BAN FROM YOU BEING BACK IN THE FINANCIAL SERVICES SECTOR FOR YEARS TO COME. IF YOU THINK YOU'RE GOING TO GET A FREE RIDE OR A WHITE HORSE TO BAIL YOU OUT, THE WHITE HORSE IS DEAD. IT'S OVER WITH.

FERRY: IS FANNIE AND FREDDIE INCLUDED WITH THAT? IS THEIR WHITE HORSE DEAD?

DODD: FANNIE AND FREDDIE AND THE WHOLE GSE SYSTEM AND IT'S A GREAT QUESTION AND LEGITIMATE ONE IN DESPERATE NEED OF REFORM. BUT CANDIDLY THERE'S ONLY SO MUCH I COULD ONLY TAKE ON WITH THIS BILL AND SO THAT COMES UP, BUT NOT IN THIS ROUND. IT'S THE NEXT WAVE HERE WE HAVE TO DEAL WITH GSEs.

QUICK: LAST WEEK WE SPOKE WITH SENATOR SHELBY. HE TOLD US THAT BEHIND THE SCENES DESPITE ALL OF THE ANIMOSITY AND VERY TOUGH HEADLINES BETWEEN THE PARTIES, BEHIND THE SCENES YOUR STAFF HAS BEEN WORKING CLOSELY. WHERE DO THINGS STAND BEHIND THE SCENES RIGHT NOW AND HOW SOON CAN WE EXPECT SOME SORT OF BILL THAT BRING AT LEAST SOME REPUBLICANS ON BOARD?

DODD: RICHARD SHELBY AND I AND HE'S THE FORMER CHAIRMAN OF THE COMMITTEE, WE SIT NEXT TO EACH OTHER AND HAVE BEEN SITTING TOGETHER FOR 39 MONTHS. I HAVE A LOT OF RESPECT FOR RICHARD. HE KNOWS THE ISSUES WELL. WE WORK VERY WELL TOGETHER AND WE'RE GETTING THERE. WE'RE NOT THERE YET. WE MET AGAIN LAST EVENING AND WE'LL TALK OVER THE WEEKEND TO IRON OUT REMAINING DIFFERENCES. MY HOPE IS MONDAY AFTERNOON WE'LL HAVE A VOTE ON A MOTION TO PROCEED WHICH ALLOWS TO YOU BEGIN THE DEBATE. AND RIGHT NOW THE REPUBLICAN LEADER IS URGING HIS MEMBERS TO VOTE AGAINST THAT AND NOT START THE DEBATE. MY EXPERIENCE OF 30 YEARS IS IF YOU LOOK FOR RESOLUTION OF ISSUES OUTSTANDING, YOU HAVE TO BEGIN THE DEBATE. IF YOU DON'T BEGIN THE DEBATE, ALL YOU END UP WITH IS ENDLESS CONVERSATIONS. SO I'M URGING FELLOW SENATORS, DEMOCRATS AND REPUBLICANS, MANY OF WHOM WHO HAVE DIFFICULTIES WITH THIS BILL FOR ONE REASON OR ANOTHER, LET US GET TO THE DEBATE ON MONDAY. THE AMERICAN PEOPLE EXPECT THIS. WE'LL RESOLVE THESE ISSUES BUT I DON'T BELIEVE WE'LL RESOLVE THEM IF WE'RE NOT ON THE BILL WORKING ON IT. I HOPE WE GET 60 VOTES TO ALLOW US TO BEGIN THAT DEBATE ON MONDAY EVENING.

KERNEN: SENATOR, IN THE ENVIRONMENT THE WAY IT'S CHANGED AND THE WAY WE ALLUDED TO AT THE TOP, HAVE YOU MOVED FURTHER AWAY FROM WHERE THE REPUBLICANS WERE AND THEY FOLLOWED YOU TO GET CLOSER? HAVE YOU CONCEDED AT ALL TO GET TO THIS POINT AND WHEN IT'S ALL SAID AND DONE WHAT IS YOUR PREDICTION FOR HOW MANY REPUBLICANS YOU HAVE?

DODD: WELL, I WOULD LOVE TO SEE US GET 75, 80, 85 VOTES ON THIS BILL.

KERNEN: WHAT'S YOUR PREDICTION?

DODD: I THINK WE GET A STRONG VOTE IN THE END. CAUSE I DON’T BELIEVE PEOPLE DON'T WANT TO BE ON THE WRONG SIDE OF THIS ISSUE.

KERNEN:WILL YOU HAVE TO COME BACK AND DO THINGS THEY WANT OR WILL THEY HAVE TO COME TO YOUR SIDE?

DODD: LOOK AGAIN, RICHARD SHELBY AND I, LISTEN THIS IS A LEGACY ISSUE, THIS IS THE FIRST TIME IN 80 YEARS THAT ANY ATTEMPT HAS BEEN MADE TO REFORM THE SYSTEM. WE NEED TO DO WHAT WE CAN TO SEE TO IT WE NEVER GO THROUGH WHAT WE'VE BEEN THROUGH BUT SECONDLY WE BOTH FEEL VERY STRONGLY THAT WE DON'T WANT TO HAVE A FINANCIAL SYSTEM THAT CAUSES US TO LOSE MARKET SHARE IN THE UNITED STATES. WE NEED TO HARMONIZE RULES INTERNATIONALLY AND MAKE SURE WE CREATE WEALTH AND CREATE JOBS.WE'RE TRYING TO GET THIS AS RIGHT AS WE CAN. THE POLITICAL DEBATE IS SECONDARY. I KNOW WE HAVE TO PRODUCE THE VOTES BUT I'M NOT GOING ACCEPT SOME IDEA THAT'S A BAD IDEA BECAUSE WE HAVE A COUPLE POLITICAL VOTES AND THEN WATCH OUR COUNTRY SUFFER AS A RESULT. WE NEED TO DO WHAT'S RIGHT HERE. WE'RE BOTH DETERMINED TO DO THAT.

KERNEN: YOU'RE ON THE RECORD, SENATOR, THAT "SQUAWK BOX" IS YOUR FAVORITE SHOW.

DODD: IT IS.

KERNEN: I JUST WANT TO CLEAR UP. THAT INCLUDES WEEKEND SHOWS AS WELL? SHOWS THAT APPEAR ON SUNDAY FOR EXAMPLE?

DODD: I LIKE HOW YOU ARE TRYING. GOOD EFFORT HERE.

KERNEN: COULD YOU PROBABLY JUST SAY WEEKDAYS.

DODD: WE'LL START WITH WEEKDAYS AND TALK TO ME OVER THE WEEKEND.

KERNEN: WE’VE GOT DAVID GREGORY AS A GUEST COMING UP.

DODD: I WILL SEE DAVID ON SUNDAY MORNING.

KERNEN: I WANTED SOME WAY TO INTRO INTO HIM WITH A SOUND BITE FROM YOU.

DODD: REMIND HIM HAS FAMILY IN CONNECTICUT.

KERNEN: HE BETTER WATCH IT. ALL RIGHT. SENATOR THANKS. GOOD TO SEE YOU.

DODD: THANK YOU.

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