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CNBC TRANSCRIPT: CNBC'S "FAST MONEY" TALKS TO SENATOR CHRIS DODD TODAY

Beth Goldman
Monday, 8 Nov 2010 | 6:08 PM ET
Sen. Christopher J. Dodd (D-CT) speaks at a news conference following the Senate's cloture vote on health care reform legislation on Capitol Hill.
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Sen. Christopher J. Dodd (D-CT) speaks at a news conference following the Senate's cloture vote on health care reform legislation on Capitol Hill.

WHEN: TODAY, MONDAY, NOVEMBER 8TH AT 5PM

WHERE: CNBC'S "FAST MONEY"

Following is the unofficial transcript of a CNBC interview with Senator Chris Dodd today on CNBC's "Fast Money."

All references must be sourced to CNBC.

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MELISSA LEE: OUTGOING DEMOCRATIC SENATOR CHRIS DODD MAY BE REMEMBERED MOST FOR THE FINANCIAL REGULATION BILL THAT BEARS HIS NAME, BUT THE CURRENT LEGISLATION COULD BE UNDER SIEGE AFTER LAST WEEK'S GOP TIDAL WAVE. SENATOR DODD JOINS US NOW FROM THE CONFERENCE IN NEW YORK CITY.SENATOR, GREAT TO HAVE YOU WITH US HERE ON "FAST."

DODD: THANK YOU. GOOD TO BE WITH YOU.

LEE: ALREADY REPUBLICANS ARE SAYING THAT THEY'RE GOING TO GUT FINANCIAL REFORM. DO YOU BELIEVE THAT THE REPUBLICANS AT THIS POINT HAVE THE POWER AND ABILITY TO DO SO?

DODD: WELL, I HAVEN'T HEARD THAT. I HAVE HEARD LANGUAGE OR SIMILAR LANGUAGE ABOUT HEALTH CARE, BUT I THINK ON FINANCIAL REFORM, THERE MAY BE SOME EFFORTS TO MODIFY THIS WHICH MAY BE LEGITIMATE. I WOULD BE THE LAST PERSON TO TELL YOU WE'VE WRITTEN SOMETHING HERE THAT OUGHT TO BE ETCHED IN MARBLE OR GRANITE.I THINK WE HAVE A GOOD BILL. IT WAS NEEDED IN MY VIEW, TO STEP UP AND REFORM A SYSTEM IN LIGHT OF THE EVENTS THAT OCCURRED OVER THE LAST SEVERAL YEARS. BUT THE IDEA THAT YOU ARE GOING TO JUST SCRAP THIS WHOLE THING OR GUT IT ALL ENTIRELY, I THINK THE BUSINESS COMMUNITY, ONE, WOULD REACT NEGATIVELY TO THAT.THEY WANT SOME CERTAINTY IN ALL OF THIS. THE REGULATORY ENVIRONMENT WILL BE CRITICAL.ONE CRITICISM IS WE LEFT TOO MUCH TO THE REGULATORS. BUT FRANKLY I'D RATHER LEAVE SOME OF THESE ISSUES TO REGULATORS THAN THE VAGUERIES OF A VOTE IN THE HOUSEOF REPRESENTATIVES TO DETERMINE WHAT THE RULE OUT AUGHT TO BE OR WHAT PROPRIETARY TRADEING OUGHT TO BE.I'M OPTIMISTIC THIS WILL GO FORWARD. OVERALL THE FUNDAMENTAL BILL WE PASSED WILL REMAIN INTACT.

LEE: AS ONE OF THE MAJOR ARCHITECTS OF DODD/FRANK, SENATOR, WHAT IS IN YOUR VIEW THE CENTERPIECE OF THE FINANCIALREFORM BILL.WHATS THE MOST IMPORTANT THING TO KEEP INTACT?

DODD: WELL, ONE IS THE TOO BIG TO FAIL NOTION. IT'S CRITICALLY IMPORTANT.THE AMERICAN TAXPAYERS HAVE SPOKEN VERY STRONGLY ON THIS. THEY DON'T EVER WANT TO BE CONFRONTD AGAIN OF A BAILOUT SITUATION WHERE SOME INSTITUTION CAN SO DISREGARD THE RULES OF THE ROAD THAT THEY CAN BECOME SO BIG THEY CAN COUNT ON THE TAXPAYER FOR PULLING THEIR CHESTNUTS OUT OF THE FIRE. THOSE DAYS ARE OVER WITH. I THINK THE CONSUMER PROTECTION BUREAU IS CRITICALLY IMPORTANT AGAIN GIVING PEOPLE A SENSE OF CONFIDENCE AND A PLACE TO GO. WE HAVE THAT WITH CONSUMER PRODUCTS, BUT WITH FINANCIAL PRODUCTS, WHERE DOES THE CONSUMER GO WHEN THEY ARE DEFRAUDED ON A HOME MORTGAGE OR A STOCK OR AN INSURANCE POLICY. AND I THINK HAVING A PLACE WHERE THAT'S GOING TO BE THE FOCUS OF ATTENTION IS CRITICALLY IMPORTANT.I THINK THE SYSTEMIC RISK COUNCIL WHICH I HOPE THEY NOW GET INVOLVED IN THE FORECLOSURE ISSUE.THIS IS A PERFECT EXAMPLE WHERE AGAIN THAT RISK COUNCIL OUGHT TO BE SITTING DOWN AND EXAMINING THIS ISSUE AND DETERMINING WHAT THE BEST POLICY IS TO GO FORWARD.SO THOSE ARE THREE THINGS I THINK ARE GOING TO BE CRITICALLYIMPORTANT TO MAINTAIN.

LEE: YOU DID NOT MENTION THE VOLCKER RULE AND THAT SEEMS TO BE SQUARELY IN THE SIGHTS OF REP. BACHUS. IF THEY TWEAKED THAT, WOULD YOU FEEL COMFORTABLE IN THE LEGACY THAT YOU LEAVE BEHIND AS YOU PREPARE TO RETIRE?

DODD: I MISSED YOUR LAST POINT. I APOLOGIZE.

LEE: IF THEY TWEAK THE VOLKER RULE WHICH YOU DID NOT MENTION AS BEING CRITICAL TO FINANCIAL REFORM, BECAUSE THAT IS SQUARELYIN THE SIGHTS OF REPRESENTATIVE BACHUS WHO IS OPENLY SPOKEN AGAINST IT IN THE PAST WEEK OR SO. WOULD YOU FEEL THAT FINANCIAL REFORM REMAINS INTACT ENOUGH TO BE EFFECTIVE?

DODD: LET ME RESPOND. MY VIEW IS LOOK.I DON'T THINK ANYONE WANTS TO SEE THAT SOME INSTITUTION PLAYS WITH DEPOSITORS MONEY.YOU CAN BEGIN THERE.YOU, AGAIN, THERE'S A NEED EVERY NOW AND THEN DEPENDING ON WHAT WE'RE TALKING ABOUT WHERE PROPRIETARY TRADING HAS A VALUE. ONE REASON WE DIDN'T JUST SLAM THE DOOR ON THIS ALTOGETHER WAS BECAUSE I DO THINK THERE ARE NUANCES THAT NEED TO BE APPLIED WHEN YOU ARE DEAL WITH THE VOLKER RULE. THAT'S WHY THIS OUGHT TO BE IN THE HANDS OF THE REGULATORS TO DO THE JOB TO DO THE WORK AND EXAMINE THIS QUESTION.AGAIN, THE SUGGESTION WE SHOULD NOT HAVE A VOLKER RULE OR THAT YOU HAVE ONE SO TIGHT THAT IT DOESN'T ALLOW FOR NEEDED LIQUIDITY SEEMS TO BE A HUGE MISTAKE.SO I DON'T THINK YOU ARE GOING TO SUCCEED IN DROPPING THE VOLKER RULE ALTOGETHER.THAT WOULD BE A HUGE MISTAKE. BUT I SEE THE REGULATORS COMING UP WITH A MORE NUANCED APPROACH THAN MIGHT HAVE BEEN THE CASE HAD YOU LEGISLATED IN THIS AREA.

PETE NAJARIAN: WITH $27 TRILLION IN SWAPS TRADING ANNUALLY, OF THE U.S. EXCHANGES PREPARED TO WIN THAT MARKET SHARE VERSUS THE OVERSEASEXCHANGES AT THIS POINT?

DODD: I BELIEVE THEY ARE.AND AGAIN, I AM FINDING LESS ANDLESS.THERE'S SOME CONCERNS ABOUT IT.THE CME AND OTHERS HAVE RAISED CONCERNS.BUT AGAIN, YOU KNOW, WHEN YOU ARE TALKING ABOUT AN INDUSTRY THAT WENT FROM $90 BILLION TO $600 TRILLION IN DOLLARS OVER-THE-COUNTER AND AGAIN WHERE WE'RE CLEARING CAN OCCUR, HAVINGTHE KIND OF EXCHANGE ACTIVITY HERE, I THINK IS EXTREMELY IMPORTANT. DERIVATIVES ARE SO ESSENTIAL, SOIMPORTANT TO OUR FINANCIAL SUCCESS, THE ECONOMIC SUCCESS OFOUR COUNTRY. AND SO -- BUT YOU WANT TO MAKE SURE YOU'RE GOING TO HAVE THE TRANSPARENCY THAT I THINK THE BILL PROVIDES FOR.AND AGAIN, THERE MAY BE SOME NUANCES ON THIS THAT CAN MAKE THIS WORK EVEN BETTER. I'M CERTAINLY OPEN TO THAT AS SOMEONE WHO HAS AUTHORED PART OFTHIS BILL.BUT HAVING THE REGULATORS AGAIN WORK AT THIS.AND THEY'RE DOING THAT I'M TOLD. BOTH THE CFTC AND THE SEC ON TRYING TO COMING UP WITH SOME REGULATIONS HERE THAT MAKE SENSE.

LEE: SENATOR DODD, THANKS FOR JOINING US.

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