Financial Regulatory Reform

" Data management associate director for financial market all of the of the Center for American Progress mark Calabria stricter financial regulations -- kingdom good to have both of you with us. David -- is a little bit defensive here because there has been a lot of criticism from the left that he's not doing enough and from the right. -- doing too much and creating even more of a moral hazard. "

" Right well you know I think that this is one approach that at that the Obama administration could've taken. The other approach of course would be a break up the too big to fail institutions. I think that that is certainly something a lot people aren't particularly on the left and right actually we're we're pushing for war. But you know I think the Obama administration again that they may have political calculation that. That would be too tough to do what is not a viable solution I would point out is just pretending that we cannot let these guys fail with no changes so -- whatsoever. That the status quo is good enough fan and that you know somehow the previous folks messed up -- by assuming these guys are too big to -- on that. That that these guys really could be allowed to collapse and and nothing would happen."

" Now what are -- waiting and we may hear a little bit more mark is is this whole issue of when a bank fails not currently the plan would say you get what -- to sixteen months. Sit sit to deal with the problem your bank but then lot of critics have said no thanks -- to pay into a fund right now every single bank. And that we would use that money and and some thought that Barney Frank would actually put this topic -- this back on the table. Do you think that the current plan that he has is is really just more moral hazard more tax Payer support."

" Well first I want to say. I don't think anybody's taking the perspective while we need to do nothing -- that the system is all right I don't know anybody defensive stats for this as fiscally broken. And the question is how do you deal that moral hazard how do you deal with resolving that. I don't see anything in the proposal that actually forces creditors for instance take care cots there's all this well you know regulators -- the ability to do this regulators -- ability that. Raiders had lots of abilities and lots of hours they didn't exercise and before that didn't stop the mass before. So I'm very questionable about that she's giving massive distraction to regulators. You know to -- and if we learned a lesson from this savings and loan crisis for instance was. If you allow regulators to get forbearance they're going to give forbearance they -- not address the problem. There's nothing and Barney's bill that forces. The regulators to go in there. For instance one of the things we have the federal deposit insurance act is least cost resolution they don't have that this -- there's nothing -- guarantees us. That the latest work will be to minimize the cost the taxpayer. We knew we get flowery language about protecting the taxpayer for the -- mechanism to actually force that so where's the credibility of our allows bailout so. You ought to be I think you're just gonna have every week instead of via Lehman negotiation over somebody can --"

" money well we'll leave it there for now obviously this is to be continued with with both of you as we do find out more at of course. Should chairman Frank's say anything specifically about -- key issue of who would bear the burden of responsibility to bail out failed institution -- an update you on map to really keep those phones how he's going to include that in the bill."