CNBC EXCLUSIVE: CNBC TRANSCRIPT: CNBC'S MARIA BARTIROMO SITS DOWN WITH ROGER FERGUSON, TIAA-CREF PRESIDENT & CEO, TODAY ON "CLOSING BELL"

MARIA BARTIROMO: A SPECIAL INTERVIEW RIGHT NOW. A CNBC EXCLUSIVE. I'M JOINED BY ROGER FERGUSON. THE FORMER VICE CHAIRMAN OF THE FEDERAL RESERVE AND THE CURRENT PRESIDENT AND CEO OF TIAA-CREF. SO NICE TO HAVE YOU ON THE PROGRAM, ROGER.

ROGER FERGUSON: MARIA, THANK YOU VERY MUCH FOR INVITING ME. LOOKING FORWARD TO IT.

BARTIROMO: THIS IS GREAT TO HAVE YOU. FIRST OFF, CONGRATULATIONS ON THE NEW ROLE. TELL ME WHAT YOU'RE DOING HOW YOU'RE SPENDING MUCH OF YOUR TIME AT TIAA-CREF.

FERGUSON: THANKS VERY MUCH.I'VE BEEN IN THIS JOB FOR SLIGHT SLIGHTLY MORE THAN A YEAR. LIKE MOST CEOs IN FINANCIAL SERVICES RIGHT NOW I FIND MYSELF DOING THREE THINGS. ONE VERY MUCH FOCUSED IN ON RISK MANAGEMENT, LOOKING AT THE PORTFOLIO, MAKING SURE WE'RE MAKING THE RIGHT DECISIONS FOR OUR 3 1/2 MILLION AMERICANS WHOSE RETIREMENT WE PROTECT. SECONDLY I'M SPENDING AN AWFUL LOT OF TIME COMMUNICATING, TELLING OUR STORY, LISTENING TO WHAT OUR PARTICIPANTS ARE TELLING US ABOUT THEIR CONCERNS AND ANXIETIES AND THEIR WORRIES. THAT'S EXTREMELY IMPORTANT AT THIS STAGE BECAUSE EVERYONE IS QUITE UNCERTAIN. AND THE THIRD THING I'M DOING,

OBVIOUSLY, IS SPENDING A LOT OF TIME INTERNALLY. WE'VE GOT IN OUR OWN COMPANY 7,000 EMPLOYEES. THEY'VE GOT TO KNOW THAT WE ARE MAKING THE RIGHT DECISIONS, MOVING THE RIGHT DIRECTION.

BARTIROMO: HOW ARE YOU MANAGING THAT PENSION MONEY RIGHT NOW? PEOPLE ARE VERY WORRIED. THEY SEE THAT THEY'VE LOST A LOT OF VALUE AFTER THIS MOST RECENT UPSET. DO YOU ALLOCATE AROUND THE WORLD? HOW DO YOU DECIDE WHAT'S SAFEST AND WHERE THE RISK TO TAKE IS?

FERGUSON: OUR VIEW HAS ALWAYS BEEN THAT WHEN YOU'RE DEALING WITH PENSION AND RETIREMENT YOU HAVE TO TAKE A VERY, VERY LONG-TERM PERSPECTIVE. MANY PEOPLE WILL BE RETIRED AND LIVING OFF RETIREMENT FOR 20 OR 30 YEARS. CONSEQUENTLY, WE'VE MAINTAINED BROAD DIVERSIFICATION. WE HAVE CERTAINLY LOOKED FOR OPPORTUNITIES TO GET INCREMENTAL RETURN WITH LOW RISK. RECENTLY WE'VE SEEN OBVIOUSLY A RUN-UP IN INTEREST RATES IN THE FIXED INCOME WORLD. AND WE ARE GLOBALLY DIVERSE. WE ALSO RECOGNIZE THAT DIVERSIFICATION INCLUDES NOT JUST EQUITIES, FIXED INCOME, BUT ALSO ALTERNATIVE OPTIONS AND INVESTMENTS, AND SO WE'RE THINKING BROADLY ABOUT ALL THE ASSET CLASSES.

BARTIROMO: SO YOU'RE STILL LOOKING AT ALTERNATIVES EVEN THOUGH A COUPLE YEARS AGO WE WERE TALKING A LOT ABOUT ALTERNATIVES LIKE PRIVATE EQUITY, LIKE HEDGE FUNDS AND YET THAT BLEW UP ON US. BUT YOU NEED TO HAVE DIVERSITY IN TERMS OF ALTERNATIVES.

FERGUSON: YOU ABSOLUTELY NEED TO HAVE A BROAD DIVERSIFICATION ACROSS ALL THE ASSET CLASSES. APPROPRIATELY PRICED IN THE HANDS OF THE PEOPLE. WE DO NOT DO HEDGE FUNDS AT OUR COMPANY. ON THE OTHER HAND, WE DO HAVE EXPOSURE TO TIMBER. WE HAVE EXPOSURE TO COMMERCIAL REAL ESTATE, APPROPRIATELY MANAGED. AND YES, WE ALSO HAVE SOME EXPOSURE TO PRIVATE EQUITIES. THOSE ARE ALL RELATIVELY SMALL COMPARED TO OUR LIQUIDS. BUT WE THINK IT'S QUITE IMPORTANT TO HAVE THAT KIND OF DIVERSIFICATION.

BARTIROMO: YOU MENTIONED TIMBER. LET ME ASK YOU ABOUT TIMBER, ABOUT OTHER COMMODITIES WHICH OF COURSE WE'VE SEEN A LOT OF RUN-UP IN. A LOT OF PEOPLE SAY YOU NEED TO HAVE EXPOSURE TO THINGS LIKE OIL, IRON, COPPER, WHATEVER IT IS, BECAUSE THAT WILL BE THE AREA THAT YOU WANT TO BE IN ONCE WE DO SEE A RECOVERY. DO YOU BUY INTO THAT STILL?

FERGUSON: WELL, WE TAKE A LONG-TERM VIEW. AND AGAIN, WE'RE THINKING ABOUT A 30-YEAR PROFILE. AND OBVIOUSLY, FOR A 30-YEAR PROFILE WITH INFLATION RISKS BEING UNCERTAIN, HAVING AN EXPOSURE TO THE COMMODITIES IS A SMART THING TO DO. I CAN'T COMMENT ON WHETHER OR NOT THERE'S A BUBBLE IN COMMODITIES RIGHT NOW. WE ARE REALLY LOOKING OVER THE LONGER-TERM PERSPECTIVE.

BARTIROMO: ARE YOU WORRIED ABOUT INFLATION?

FERGUSON: I'M NOT WORRIED ABOUT INFLATION PERSONALLY. I THINK WE AT TIAA-CREF RECOGNIZE WE HAVE TO HAVE INFLATION PROTECTION FOR OUR PARTICIPANTS. AS ONE THINKS ABOUT WHAT'S LIKELY TO HAPPEN, INFLATION MAY BECOME A PROBLEM IN A FEW YEARS THAT THE FED WILL HAVE TO ADDRESS. BUT RIGHT NOW I'D SAY THERE'S TOO MUCH OF WHAT WE CALL AN OUTPUT GAP TO HAVE INFLATION BE A NEAR AND PRESENT DANGER.

BARTIROMO: WHERE ARE WE IN THE ECONOMIC SLOWDOWN? PEOPLE WONDER IF IN FACT WE'VE SEEN THE WORST OR, WITH COMMERCIAL REAL ESTATE SORT OF STILL QUESTIONABLE, WE ARE GOING TO SEE ANOTHER SHOE DROP.

FERGUSON: I THINK THE REALITY IS THAT THE ECONOMY IS GRADUALLY HEALING. THERE ARE MANY INDICATORS THAT SUGGEST THAT. ON THE OTHER HAND, AS YOU POINT OUT, NOT EVERYTHING IS POINTING IN THE SAME DIRECTION. THERE ARE ASSET CLASSES THAT DO HAVE DIFFERENT CYCLES. I'D SAY BROADLY SPEAKING WE'LL SEE THE ECONOMY CONTINUING TO IMPROVE YEAR OVER YEAR. NOT A DRAMATIC TURNAROUND BUT A GRADUAL IMPROVEMENT.

BARTIROMO: BUT IS THERE ANY REASON TO BELIEVE WE'LL SEE GROWTH IN 2009?

FERGUSON: I THINK IT'S REASONABLE TOWARD THE LAST QUARTER WE'LL SEE NUMBERS THAT APPEAR MORE POSITIVE FOR SURE. THE RISK AROUND THAT STATEMENT IS IT COULD BE SLIGHTLY TOO OPTIMISTIC. I'M MUCH MORE COMFORTABLE ABOUT GROWTH IN 2010.

BARTIROMO: SO YOU DO THINK WE'LL SEE GROWTH IN 2010?

FERGUSON: YES, I DO.

BARTIROMO: LET ME ASK YOU ABOUT ALL THE PROGRAMS COMING OUT OF THE FEDERAL RESERVE. THE FED HAS BEEN SO RESPONSIVE AND AGGRESSIVE IN WHAT HAS BEEN TRULY AN EXTRAORDINARY MOMENT IN TIME FOR ALL OF US. DO YOU SEE AN EXIT STRATEGY FOR THE FED WINDING DOWN ALL OF THESE PROGRAMS?

FERGUSON: I KNOW THE FED IS QUITE FOCUSED ON THAT. THEY'VE MADE THOSE COMMENTS PUBLICLY. AND I'M SURE KNOWING THE WAY THE FED OPERATES THEY'RE THINKING ABOUT IT PRIVATELY AS WELL. ON THE OTHER HAND, THE ECONOMY, I THINK, STILL REQUIRES SOME FED STIMULUS AND SOME FED INTERVENTION. SO THE CHALLENGE AROUND THE EXIT STRATEGY IS GETTING IT RIGHT. YOU DON'T WANT TO EXIT TOO EARLY BECAUSE WE SAW WHAT HAPPENED IN JAPAN, FOR EXAMPLE. YOU DON'T WANT TO EXIT TOO LATE, OBVIOUSLY. SO I DO THINK THE FED IS ABSOLUTELY THINKING ABOUT THE EXIT STRATEGY AND THINKING ABOUT THE TIMING OF THAT STRATEGY.

BARTIROMO: SOME PEOPLE ARE CONFUSED ABOUT SO MANY PROGRAMS. WHAT DO YOU THINK HAS BEEN THE MOST IMPORTANT PROGRAM OUT OF THE FED IN RESPONSE TO THIS MOMENT IN TIME?

FERGUSON: I THINK THE REALITY IS THE FED HAS DONE WHAT IT SHOULD DO IN TERMS OF HAVING A PLETHORA OF PROGRAMS RESPONDING TO DIFFERENT ISSUES IN DIFFERENT MARKETS. AND SO ONE LOOKS AT THE TALF, FOR EXAMPLE. PROVED TO BE I THINK QUITE HELPFUL IN THE STRUCTURED MARKET. SOME OF THE OTHER THINGS THEY'VE BEEN DOING HAVE ALSO BEEN USEFUL. I THINK IT'S IMPOSSIBLE TO IDENTIFY ONE THAT'S CRITICAL. I THINK THE FED SHOULD GET HIGH MARKS FOR BEING CLEVER, BEING CREATIVE, AND FOR TRYING TO COVER MANY MARKETS WITH A RANGE OF DIFFERENT PROGRAMS.

BARTIROMO: AND YET WE STILL SEE UNEMPLOYMENT EXPECTED TO WORSEN LATER ON IN THE YEAR AND WE'RE STILL LOOKING FOR THE FINANCIAL SYSTEM TO SEE CREDIT FLOWING AGAIN. WHAT DO YOU THINK IT'S GOING TO TAKE TO GET CREDIT MOVING AGAIN? I MEAN, WE HEAR FROM A LOT OF SMALL AND MID-CAP COMPANIES WHO SAY WE DON'T HAVE ANY ACCESS TO CREDIT.

FERGUSON: THE REALITY IS ALL OF US KNOW THAT UNEMPLOYMENT WILL BE A LAGGING INDICATOR. SO IF WE'RE WAITING FOR THAT AS THE MAIN SIGNAL, THAT WILL COME AFTER THE ECONOMY ITSELF IS ON A MUCH HEALTHIER FOOTING. WITH RESPECT TO CREDIT, IT'S A-TALL OF TWO CITIES, IF YOU WILL. WE'VE SEEN LARGE COMPANIES GOING OUT TO MARKET IN THE CORPORATE BOND MARKET, FOR EXAMPLE. BIG ISSUANCE OVERSUBSCRIBED. SO THERE WE ARE SEEING CREDIT FLOWING AGAIN. FOR SMALL AND MEDIUM SIZED ENTERPRISES I THINK THE ISSUE REALLY IS FOR THE BANKING SYSTEM ITSELF TO FEEL MORE CONFIDENT AND BE READY TO WHAT THEY'RE SUPPOSED TO DO, INTERMEDIATE RISK.

BARTIROMO: FIRST WE THOUGHT WE NEED TO GET THE TOXIC ASSETS OFF THE BANK BALANCE SHEETS TO GET THE ECONOMY GOING BECAUSE EVERYONE SAID YOU CAN'T FIX THE ECONOMY UNTIL YOU FIX THE FINANCIAL SYSTEM. THEN WE THOUGHT, WELL, NO, NO, NO, WE NEED THE CONSUMER TO START SPENDING AND GET TRUST AND CONFIDENCE BACK. THEN SOMEONE ELSE SAID NO, NO, NO, WE NEED HOUSING TO STABILIZE. WHAT IS IT? WHICH IS THE MOST IMPORTANT?

FERGUSON: THE ANSWER, I THINK, IS IN A CRISIS OF THIS MAGNITUDE ALL OF THOSE THINGS ARE IMPORTANT. HOUSING WAS A PLACE WHERE THIS STARTED. I THINK HOUSING IS STARTING TO BOTTOM OUT. IT WILL BE IMPORTANT FOR THAT TO TURN BECAUSE FOR MANY INDIVIDUALS THAT IS AN IMPORTANT PART OF THEIR NEST EGG. SIMILARLY, WE HAVE A CONSUMER-DRIVEN ECONOMY. AND WHILE I THINK OVER TIME WE CLEARLY NEED TO HAVE SAVINGS RATES RISE, WE ALSO NEED TO HAVE CONSUMERS DEVELOPING THEIR CONFIDENCE AND GETTING BACK INTO THE MARKETS. AND FINALLY, CONFIDENCE FROM AND IN THE BANKING SYSTEM IS ALSO IMPORTANT. I WOULD CAUTION ANYBODY AGAINST CHOOSING ONE THING AS BEING MOST IMPORTANT AND RECOGNIZE THAT THIS IS A MULTIPRONG CRISIS NEEDING A MULTIPRONG SOLUTION.

BARTIROMO: IS THE U.S. IN BETTER SHAPE THAN THE REST OF THE WORLD, OR IS EMERGING MARKETS IN BETTER SHAPE THAN THE REST OF THE WORLD? HOW DO YOU SEE IT?

FERGUSON: I THINK THE U.S. IS AHEAD IN THE SENSE THAT WE'VE GONE THROUGH MUCH OF THE WORST OF THE CRISIS AND WE SEEM TO HAVE GRADUALLY COMING OUT OF THE BACK END. WE HAVE REGULATORS AND A CENTRAL BANK THAT HAVE BEEN ON THE GAME, IF YOU WILL.AND THE TREASURY'S BEEN QUITE ACTIVE. SO I THINK WE'RE MOVING PERHAPS A LITTLE MORE QUICKLY THAN SOME OF THE OTHERS. THE EMERGING MARKETS, BECAUSE THEY'RE HEAVILY DEPENDENT ON CONSUMPTION AND TRADE WITH THE U.S., I THINK WILL LAG A BIT,AND WE HAVE TO GET BACK ONTO A FIRMER FOOTING BEFORE THEY ARE CONFIDENTLY ON A FIRMER FOOTING.WITH THE EXCEPTION OBVIOUSLY OF THE COMMODITY-DRIVEN ECONOMIES WHERE THE RISE OF THE COMMODITY PRICES HAS UNDOUBTEDLY BEEN A HELP TO THEM.

BARTIROMO: WHAT ARE YOUR THOUGHTS ON THE FINANCIAL REFORM PLAN OUT OF THE OBAMA ADMINISTRATION, GIVING BASICALLY THE FEDERAL RESERVE MORE REGULATORY POWER AND OVERSIGHT?

FERGUSON: I THINK AS THEY THEMSELVES HAVE SAID THEY HAVE PUT FORTH A SERIES OF PROPOSAL THAT'S ARE THE ART OF THE POSSIBLE. WE CLEARLY NEED TO THINK ABOUT SYSTEMIC RISK AND A SYSTEMIC SUPERVISOR IN A MUCH MORE COHERENT FASHION, BEING MUCH MORE EXPLICIT ABOUT THAT. THE FED SEEMS LIKE A GOOD CHOICE. MORE BROADLY SPEAKING I'D SAY THE OBAMA ADMINISTRATION HAS PUT ITS FINGER ON A NUMBER OF OTHER ISSUES THAT ARE IMPORTANT. THERE ARE SOME THINGS ON THE OTHER HAND THEY DIDN'T DO. THEY DID NOT PUT FORTH AN OPTIONAL FEDERAL CHARTER FOR INSURANCE COMPANIES, WHICH I THINK WOULD HAVE BEEN A NICE ADDITION. AND THEY'VE LEFT OFF FOR A NUMBER OF GOOD POLITICAL REASONS THE POSSIBLE INTEGRATION OF SOME OF THE REGULATORY AGENCIES.

BARTIROMO: SO DO YOU THINK WE WILL SEE A CHARTER FOR THE INSURANCE PART OF THE STORY, A CHARTER FOR THE INSURANCE COMPANIES? DO YOU THINK THAT WILL BE ONE MORE PROPOSAL THAT COMES DOWN? OBVIOUSLY, IT'S NOT ON THE TABLE RIGHT NOW.

FERGUSON: TO BE HONEST, I HOPE IT COMES OUT. I THINK IT'S GOOD FOR CONSUMERS AND IT'S GOOD FOR THE INDUSTRY ITSELF. RIGHT NOW WE HAVE 51 JURISDICTIONS. IF SOMEONE IN THE INSURANCE INDUSTRY WANTS TO INTRODUCE A NEW PRODUCT THAT IS BENEFICIAL TO CONSUMERS, IT COULD TAKE TWO TO THREE YEARS. SO I CERTAINLY HOPE THAT IN CONGRESS AS WELL AS THE ADMINISTRATION THEY PUT A FOCUS ON THIS OPTIONAL FEDERAL CHARTER FOR THE INSURANCE INDUSTRY.

BARTIROMO: WHAT ABOUT THIS CONSUMER ADVOCACY AGENCY? A LOT OF BUSINESS PEOPLE ARE UNNERVED BY THIS. DO YOU THINK THAT WILL WORK?

FERGUSON: THE REALITY IS WE ALREADY HAVE A NUMBER OF INSTITUTION THAT'S ARE FOCUSED IN ON CONSUMER PROTECTION AND INVESTOR PROTECTION. THAT'S BEEN PART OF WHAT THE S.E.C. DID. IT IS PART OF WHAT THE BANK REGULATORS HAVE DONE. ON THE OTHER HAND, I THINK IN SOCIETY AT LARGE WE NEED TO REBUILD CONFIDENCE AROUND FINANCIAL PRODUCTS AND FINANCIAL SERVICES. IF THIS NEW CONSUMER AGENCY IS TO WORK I THINK IT'S GOT TO BE SOMETHING THAT'S NOT JUST AN EXTRA ADDED LAYER OF BUREAUCRACY BUT REALLY BECOMES THE FEDERAL SOLUTION TO A NUMBER OF QUESTIONS THAT CURRENTLY EXIST. SO I THINK IT'S TOO EARLY TO SAY.

BARTIROMO: SHOULD THE SEC AND THE CFTC BEEN MERGED? THERE ARE A NUMBER OF PEOPLE WHO FEEL LOOK, WE'VE ALREADY GOT MORE LAYERS, THIS IS JUST ANOTHER LAYER AND INSTEAD OF PUTTING MORE LAYERS ON WE NEED THESE AGENCIES TO MERGE?

FERGUSON: PERSONALLY I WISH THEY HAD MERGED. IT MIGHT OCCUR AT SOME POINT. ON THE OTHER HAND LET'S BE HONEST ABOUT IT, BOTH AGENCIES HAVE THEIR DEFENDERS, BOTH IN THE HILL AND THE PRIVATE SECTOR. AND SO THERE ARE SOME POLITICAL HURDLES THAT HAVE TO BE GOTTEN OVER BEFORE WE SEE THAT MERGER.

BARTIROMO: YOU HAVE A PROUD AND AMAZING RESUME AND HAVE WORKED WITH BEN BERNANKE. HOW'S HE DOING?

FERGUSON: THE REALITY IS CHAIRMAN BERNANKE AND THE FED OVERALL I WOULD GIVE PASSING MARKS. ONE HAS TO RECOGNIZE THAT THEY CAN ONLY MAKE DECISIONS WITH THE INFORMATION THAT THEY HAVE AT THE TIME. SOME OF THE DECISIONS THAT THEY'VE MADE CLEARLY HAVE BEEN CONTROVERSIAL. THERE'S NO QUESTION ABOUT THAT. BUT OVERALL I THINK THE FACT THAT THEY'VE BEEN CREATIVE, ACTIVE, HAS IN FACT HELPED TO GET THIS ECONOMY TURNING AND AVOID A MUCH WORSE OUTCOME THAN WE MIGHT HAVE HAD OTHERWISE.

BARTIROMO: WHEN YOU LOOK BACK TO THAT FATEFUL WEEKEND OF SEPTEMBER 15th WHEN LEHMAN DECLARED BANKRUPTCY AND MERRILL WAS SOLD AND THE GOVERNMENT TOOK 80% OF AIG, CAN YOU LOOK AT DECISIONS AND SAY YOU KNOW WHAT, THIS SHOULD HAVE BEEN DONE DIFFERENTLY, THIS COULD HAVE BEEN DONE IN A DIFFERENT FASHION? WHAT'S YOUR THOUGHT?

FERGUSON: REALITY IS I THINK IT'S MUCH TOO EARLY TO START THAT SECOND-GUESSING PROCESS. THERE WILL BE HISTORY BOOKS AND DISSERTATIONS WRITTEN AROUND THAT. SO MY VIEW AT THIS STAGE IS LET'S LET THIS PLAY OUT, LET'S TAKE A LOOK BACK, AND THEN IN A CALMER WAY MAKE DECISIONS AROUND THAT WEEKEND.

BARTIROMO: IF OFFERED THE POSITION WOULD YOU TAKE BERNANKE'S JOB?

FERGUSON: ONE NEVER ACCEPTS, REJECTS, OR DO ANYTHING ELSE WITH RESPECT TO A JOB LIKE THAT ON TV. THANK YOU FOR ASKING.

BARTIROMO: WHEN YOU LOOK AT WHAT HAS BEEN TALKED ABOUT, YOU KNOW, PERHAPS LARRY SUMMERS MOVING IN THERE, I MEAN, DO YOU WORRY ABOUT THE UNDERMINING OF THE FEDERAL RESERVE WITH SOMEONE FROM THE WHITE HOUSE COMING IN AND PERHAPS TAKING THAT JOB? I KNOW THIS IS ALL HYPOTHETICAL, OBVIOUSLY. BUT THE INDEPENDENCE OF THE FEDERAL RESERVE, AND I KNOW YOU FEEL THAT THIS IS INCREDIBLY IMPORTANT AS WELL. TELL ME HOW YOU FEEL ABOUT THE INDEPENDENCE OF THE FED AND WHETHER OR NOT THIS MOST RECENT TALK HAS UNDERMINED IT.

FERGUSON: OH, LOOK, INDEPENDENCE OF THE FED IS EXTREMELY IMPORTANT. WHOEVER BECOMES THE NEXT CHAIR OF THE FED WILL I THINK UNDERSTAND THAT, WILL RESPECT IT, AND WILL PROTECT IT.

BARTIROMO: TELL ME WHAT NEEDS TO BE DONE NOW IN TERMS OF THIS FINANCIAL CRISIS. EVERYONE IS WONDERING WHERE WE ARE AND HOW WE GET OUT OF THIS. ARE THERE ONE OR TWO THINGS THAT YOU THINK ARE A MUST RIGHT NOW?

FERGUSON: I THINK ONE OF THE THINGS THAT IS A MUST IS TO CONTINUE WHAT WE'RE DOING NOW, WHICH IS TO HAVE THE FEDERAL RESERVE AND OTHERS PROVIDE SUFFICIENT LIQUIDITY FOR THE MARKETS TO START TO CLEAR. WE'VE SEEN THAT IN SOME CASES, NOT IN ALL CASES. SO I THINK THAT ABSOLUTELY IS A MUST. THE SECOND OBVIOUSLY IS TO

REBUILD CONSUMER CONFIDENCE AND PERHAPS SOME OF THE REGULATORY SUGGESTIONS FROM THE ADMINISTRATION MAY BE AN IMPORTANT PART OF THOSE. SO THOSE ARE THE TWO THINGS I THINK ARE MUST DOS.

BARTIROMO: SOME PEOPLE SAY THE FED HAS BEEN PRINTING MONEY AND AT SOME POINT WE'RE GOING TO HAVE AN ISSUE WITH INFLATION. SHOULD THE FED HAVE BEEN ON A DIFFERENT TACK IN TERMS OF THE WAY IT'S HANDLED THIS FINANCIAL CRISIS? DO YOU WORRY THAT WE ARE LEADING INTO A WORLD WHERE AN ENVIRONMENT WHERE WE ARE GOING TO HAVE PROBLEMS DOWN THE ROAD?

FERGUSON: WELL, YOU EARLIER ASKED A QUESTION ABOUT THE EXIT STRATEGY. THIS IS ANOTHER VERSION OF THAT ISSUE. AND AS I SAID THEN, I'M SURE THE FED IS THINKING ABOUT THE TIMING, THE MAGNITUDE AND THE NATURE OF THE EXIT STRATEGY. SO I TRUST THEM BECAUSE I KNOW THEY'RE FOCUSED ON IT TO HANDLE THAT EXIT WELL JUST TO AVOID THE KIND OF OUTCOME YOU'RE TALKING ABOUT.

BARTIROMO: THE PASSING GRADE, THOUGH, THAT'S NOT EXACTLY A RINGING ENDORSEMENT. WHAT COULD THEY BE DOING BETTER?

FERGUSON: AT THIS STAGE I THINK THEY'RE DOING THINGS THAT THEY NEED TO DO. FOR SURE. I THINK A PASSING GRADE IS EXACTLY THE RIGHT THING TO SAY. AND I'M NOT GOING TO BE IN A POSITION TO SUGGEST NEW THINGS BECAUSE I THINK WHAT THEY PUT IN PLACE ALL SEEM TO ME AT HAD STAGE TO BE WORKING AS INTENDED AND WE'RE STARTING TO SEE THE BENEFITS OF THAT.

BARTIROMO: WHAT ABOUT THE OBAMA ADMINISTRATION? THERE'S BUSINESSPEOPLE OUT THERE WHO SAY, LOOK, THIS OWNERSHIP OF BUSINESS, OWNING SUCH A LARGE PORTION OF GENERAL MOTORS, OWNING 30% PLUS OF CITIGROUP, THEY'RE UNCOMFORTABLE WITH THIS CHANGE. HOW DO YOU FEEL ABOUT IT?

FERGUSON: I THINK THE REALITY IS ONE SHOULD BE UNCOMFORTABLE IF THAT BECOMES A LONG-TERM WAY OF DOING BUSINESS, A LONG-TERM WAY OF HAVING THE GOVERNMENT INTERACT WITH THE PRIVATE SECTOR. IF IT'S A SHORT-TERM NECESSARY EXPEDIENT BECAUSE WE NEED TO HELP MOVE TO THE NEXT STAGE IN TERMS OF ANY OF THESE COMPANIES YOU'RE TALKING ABOUT, THEN I THINK ONE CAN BE COMFORTABLE. SO IT'S VERY IMPORTANT TO INDICATE THIS IS A SHORT-TERM EXPEDIENT REQUIRED BY UNUSUAL AND EXTENT CIRCUMSTANCES AND NOT THE WAY THAT THE ADMINISTRATION PLANS TO DO BUSINESS GOING FORWARD. AND I HAVE A LOT OF CONFIDENCE IN THE ADMINISTRATION THAT THEY WOULD EASILY SAY THESE WERE SHORT-TERM STEPS TAKEN FOR AN UNUSUAL CIRCUMSTANCE AND CERTAINLY NOT THE LONG-TERM PLAN.

BARTIROMO: SHORT-TERM MEANS WHAT? IS IT FAIR TO SAY WE'RE STILL SEEING A SIMILAR OWNERSHIP IN THREE YEARS? FIVE YEARS? WHAT'S SHORT-TERM?

FERGUSON: IT'S IMPOSSIBLE FOR ME TO GUESS, AND SO I WON'T VENTURE A GUESS RIGHT HERE RIGHT NOW. BUT I THINK THE POINT IS TO RECOGNIZE IT'S TEMPORARY AND NOT

MEANT TO BE PERMANENT.

BARTIROMO: ROGER SO, NICE TO HAVE YOU ON THE PROGRAM.

FERGUSON: MARIA, THANK YOU SO MUCH FOR INVITING ME. IT WAS FUN.

BARTIROMO: ROGER FERGUSON HERE IN ASPEN. WE'LL SEE YOU SOON I HOPE, YOU'LL COME BACK SOON.

FERGUSON: THANK YOU VERY MUCH FOR THE INVITATION.

BARTIROMO: CEO OF TIAA CREF. FORMER VICE CHAIRMAN OF THE FEDERAL RESERVE.

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