When: Today, Monday, July 16, 2012
Where: CNBC’s “Closing Bell with Maria Bartiromo”
Following is the unofficial transcript of a CNBC EXCLUSIVE interview with Senator Richard Shelby (R-Ala.) today, Monday, July 16th, on CNBC’s “Closing Bell with Maria Bartiromo.”
Following is a link to the video on CNBC.com: http://video.cnbc.com/gallery/?video=3000102787&play=1.
All references must be sourced to CNBC.
BARTIROMO: WELCOME BACK. THE RATE RIGGING SCANDAL IS HEATING UP AS CONGRESS JOINS A GLOBAL INVESTIGATION INTO THE POTENTIAL MANIPULATION OF KEY LENDING RATES GLOBALLY. LAWMAKERS ARE WIDENING THEIR FOCUS TO INCLUDE U.S. REGULATORS WHO MAY HAVE KNOWN ABOUT THE PROBLEM AS EARLY AS 2007 WHEN THE FINANCIAL CRISIS STARTED. TREASURY SECRETARY TIMOTHY GEITHNER AND FEDERAL RESERVE CHAIRMAN BEN BERNANKE WILL APPEAR BEFORE THE SENATE BANKING COMMITTEE THIS MONTH FOR REGULARLY SCHEDULED HEARINGS AND THEY’LL LIKELY FACE QUESTIONS ABOUT THE RATE RIGGING ISSUE. PARTICULARLY MR. GEITHNER WHO FLAGGED THE ISSUE WHILE HE WAS THE HEAD OF THE NEW YORK FED. BUT HE DID NOT APPEAR TO FOLLOW UP. SENATOR RICHARD SHELBY IS THE RANKING REPUBLICAN ON THAT PANEL AND JOINS US NOW FOR EXCLUSIVE INTERVIEW. SENATOR GOOD TO HAVE YOU ON THE PROGRAM. WELCOME.
SHELBY: THANK YOU, MARIA.
BARTIROMO: DID TIM GEITHNER DO ENOUGH?
SHELBY: ABSOLUTELY NOT. HE'S GOT STARTED BUT THEN HE STOPPED. HE STOPPED WHEN HE SHOULD HAVE BEEN WALKING TO THE NEXT LEVEL. HE SHOULD HAVE BEEN INVESTIGATING WHAT WAS GOING ON WITH LIBOR. HE HAD INFORMATION THAT SOMETHING WAS AMISS. BUT HE DIDN'T DO MORE.
BARTIROMO: WHAT WOULD YOU HAVE LIKED TO SEE HIM DO? WHAT WILL YOU BE FOCUSED ON WHEN THESE GUYS TESTIFY IN FRONT OF YOUR COMMITTEE?
SHELBY: I THINK FIRST, WE HAVE GOT TO GET TO THE BOTTOM OF ALL OF IT. IN OTHER WORDS, SEE EXACTLY WHAT HE DID. WE HAVE SEEN SOME INFORMATION. YOU KNOW, ABOUT THE BANKS AND SAYING SOMETHING IS WRONG. HE FORWARDED THAT TO THE BANK OF ENGLAND. BUT NOTHING REALLY HAPPENED IN THE MEANTIME. THERE ARE HUNDREDS OF TRILLIONS OF DOLLARS WORTH OF LOANS PREDICATED ON LIBOR EVERY DAY. SO YOU HAVE TO HAVE TRUST, YOU HAVE TO HAVE INTEGRITY IN THE BANKING SYSTEM. A LOT OF THAT IS LACKING TODAY WHICH IS SAD. WE HAVE GOT TO RESTORE TRUST AND THIS IS A START. WE SHOULD TALK CARE OF.
BARTIROMO: LET'S TALK ABOUT THIS RATE RIGGING SCANDAL. HOW WIDESPREAD COULD THIS THING GET? WHAT'S YOUR TAKE ON HOW THIS PLAYS OUT.
SHELBY: WE DON'T REALLY KNOW. WE KNOW WHAT HAS BEEN GOING ON IN THE UK AS FAR AS PARLIAMENT IS CONCERNED. WHERE BARCLAYS WAS INVOLVED. PAID A HUGE FINE. BUT WE DON'T KNOW IF THERE'S CRIMINAL ACTIVITY THERE. WE SEE WHERE THE JUSTICE DEPARTMENT IS INVOLVED. BEGINNING TO GET INVOLVED IN THIS. IT IS PROBABLY GOING TO TAKE NOT ONE HEARING, TWO HEARINGS. A LOT OF HEARINGS, TO GET TO THIS. THIS IS COMPLEX. BUT IT IS IMPORTANT. IMPORTANT TO THE WHOLE BANKING SYSTEM AS WE KNOW IT.
BARTIROMO: WHAT ABOUT THE WHOLE BANKING SYSTEM? I WANT TO GET YOUR LEVEL OF CONFIDENCE HERE IN THE BANKING SYSTEM, PARTICULARLY IN THE WAKE OF THE RATE RIGGING SCANDAL, THE JPMORGAN TRADING MESS. WE ARE STILL WRITING THE RULES OF DODD/FRANK AS WE SPEAK. SHOULD FOLKS OUT THERE BELIEVE THE SYSTEM HAS BECOME STRONGER OR NOT?
SHELBY: WELL, I CAN TELL YOU THERE IS NOT A LOT OF TRUST IN THE BANKING SYSTEM. BUT IT SHOULD BE. BECAUSE WE USED TO HAVE THAT TRUST. WE HAVE GOT TO EARN IT. WE'VE GOT TO WORK IT BACK. WE HAVE GOT TO BE MORE TRANSPARENT. THERE IS A LOT OF GREED OUT THERE. IT IS OBVIOUS. THERE ARE A LOT OF BAILOUTS WHICH PEOPLE RESENT. NOW THERE IS MANIPULATION AND EVIDENCE OF MANIPULATION OF SOME OF THE CURRENCY RATES WHICH ADDS FUEL TO THE FIRE.
BARTIROMO” SENATOR, LET'S FACE IT. YOU ARE THE RANKING REPUBLICAN ON THIS SENATE BANKING COMMITTEE. I MEAN, ARE YOU MISSING ALL OF THIS? DAY IN AND DAY OUT? WHY MORE SCANDALS? EVERY TIME WE TURN AROUND HOW WILL WE GET CONFIDENCE BACK IF PEOPLE DON'T TRUST THE POLICEMAN AT THE -- YOU KNOW, IN CHARGE.
SHELBY: WELL, THE POLICEMAN HAS TO BE DILIGENT. IF YOU REFER TO THE REGULATORS AS POLICEMEN WHICH THEY ARE, OF THE BANKING SYSTEM, FINANCIAL THING, THEY HAVE GOT TO BE INVOLVED. THEY CAN'T JUST HAVE SOME INFORMATION SOMETHING IS GOING WRONG AND QUIT AND KICK IT DOWN THE ROAD AND HOPE IT NEVER COMES UP AGAIN. THAT’S BASICALLY WHAT HAPPENED AS FAR AS WE KNOW IT THIS TIME. THEY HAVE GOT TO BE DILIGENT. THEY’VE GOT TO SAY GOSH WE HAVE TO INTEGRITY ABOVE EVERYRTHING IN OUR BANKING SYSTEM. WE USED TO HAVE IT. WE NEED TO GET THERE AGAIN.
BARTIROMO: LET ME ASK YOU THIS. I'M GOING TO SWITCH GEARS TO THE FISCAL CLIFF. ARE YOU WILLING TO SIT THERE AND NOT COME TO AN AGREEMENT BEFORE THE ELECTION OR BEFORE YEAR END WITH YOUR COLLEAGUES ON THE OTHER SIDE TO ACTUALLY MAKE SURE THAT OUR LIVES, AMERICAN LIVES ARE NOT HANGING IN THE BALANCE? YOU HAVE TAX CUTS EXPIRING AND SPENDING PROGRAMS EXPIRING. THIS FISCAL CLIFF IS GOING TO SEND THE ECONOMY PLUMMETING. WHAT ARE YOU GOING TO DO ABOUT IT?
SHELBY: MARIA, I'M WILLING TO MORE THAN MEET THE DEMOCRATS HALFWAY ON -- MEANINGFUL COMPLEX, COMPREHENSIVE TAX REFORM. THAT'S NOT WHAT THEY WANT. THEY ARE MAKING POLITICAL POINTS, THEY THINK. I HOPE IT WON'T WORK OUT IN THE FALL. BUT WE NEED COMPREHENSIVE OVERALL TAX REFORM. WE DON'T NEED TO GO OUT AND DEMAGOGUE ONE GROUP AGAINST THE OTHER.
BARTIROMO: WELL THEY DON'T EVEN WANT TO -- YOU KNOW, THE -- THE DEMOCRATS SAY THAT THEY ARE NOT GOING TO DO IT IF IT MEANS NOT RAISING TAXES. ARE YOU GOING TO RAISE TAXES FOR THE RICH?
SHELBY: WE ARE NOT GOING TO RAISE TAXES ON ANYBODY, I HOPE. BUT WE DO NEED TAX REFORM BECAUSE THERE ARE A LOT OF PEOPLE PAYING NOTHING IN THIS COUNTRY AND GETTING BY. BUT WE -- WHAT I'M ABOUT IS LOWERING THE RATES OF PEOPLE'S TAXES. INCLUDING ANYBODY THAT WORKS.
BARTIROMO: GET RID OF THE LOOPHOLES.
SHELBY: ABSOLUTELY.
BARTIROMO: FINAL QUESTION HERE. ARE -- WHAT DOES YOUR GUT TELL YOU? WHEN WILL WE GET A RESOLUTION ON THE FISCAL CLIFF? IS IT AFTER THE ELECTION? WHAT’S YOUR GUT?
SHELBY: I BELIEVE IT WILL BE AFTER THE ELECTION. AND MIGHT EVEN BE INTO THE -- NEW YEAR. BUT I BELIEVE WE WILL HAVE A RESOLUTION. A LOT OF IT WILL BE DEPENDENT ON WHAT HAPPENS IN THE ELECTION.
BARTIROMO: WOW. GIVE ME A BREAK SENATOR. 2013 NOW WE ARE TALKING ABOUT. WE WILL SEE WHAT HAPPENS TO EVERYBODY WHO IS WAITING ON THIS AND COUNTING ON THEIR JOB AFTER THE ELECTION, WHAT THEY ARE GOING TO BE FORCED TO GET FIRED, I GUESS.
SHELBY: WELL, I HOPE NOBODY GETS FIRED. I HOPE WE --
BARTIROMO: WELL THE SPENDING PROGRAMS ARE GOING AWAY. ITS NOT BRAIN SURGERY. THE SPENDING PROGRAMS ARE GOING AWAY. RIGHT.
SHELBY: WELL, THERE ARE A LOT OF SPENDING PROGRAMS THAT NEED TO GO AWAY. BUT WE NEED TO MAKE SURE THAT AMERICA IS NOT DESTROYED IN THE MEANTIME.
BARTIROMO: ALRIGHT SENATOR GOOD TO HAVE YOU ON THE PROGRAM. THANKS FOR WEIGHING IN ON THESE IMPORTANT ISSUES. WE APPRECIATE ALWAYS YOUR CANDOR.
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