because more clearly some people are having trouble hearing you with of the bipartisan tube financial task force of which i have had the privilege to be a member it has now been more than a year since the near meltdown of the financial system since then the congress has worked hard to develop a comprehensive legislative to restoring faith in our financial institutions and markets as well as to strengthening our lending institutions to the point where they can feel comfortable again lending to businesses and consumers you will find many common elements between our recommendations and the specifics of the bills that have come out of the house financial services committee and that are now being considered in the senate banking committee our task force members came into the process with very different views much like the differences you see in congress we debated these views intensely call molly and we listened to each other and frankly we learned from each other and at least for my part there were a few minds changed including my own on some issues while we did not cover the waterfront and while some members would have preferred different approaches with respect to specific recommendations we came up with a package of principles and reforms that we believe would be a significant improvement over the status quo myco task force member bob steele will aberrate on some of our ideas here as my quick overview five points number one we need  monitoring and regulation by and oversight council comprised of the relevant financial agencies specifically this council on its own initiative or upon recommend a should add to minimum standards for capital liquidity margins and leverage to prevent or slow the formation of future asset or credit bubbles second there are several ways to make sure that no financial institution is too big work too complex to fail we can do this through capital and liquidity requirements that increase with an institution size and complexity and by mandating that large institutions file and gain regulatory approval of what are called wind down plans third we recommend the consolidation of all current federal financial supervision and regulation into a single regulator we believe that eliminating gaps and duplications in our current fragmented regulatory system would be a significant improvement but at the same time we also would retain the dual banking system under which banks would have the opportunity to choose between a statement for derivatives markets clearly should be strengthened by using capital requirements to drive more o t c derivatives to a central clearing house and eventually exchanges the compensation of senior financial executives and risk takers should be tied to long term performance best through very long term restricted stock much like the kind of things that the fed has recently proposed housing market is of course impossible to answer such a hypothetical question i am convinced however that the consumer financial protection agency is structured with the appropriate regulatory authority funding and independent but such requires that we reorient the financial system award the mission of promoting economic wellbeing for american public this means removing the financial unnecessary financial instability for consumers and ultimately the system there's a lot of confusion a problem we're really talking about protecting creditors in full because the shareholders get wiped out and although actually in some cases the management did not get wiped out but we certainly in our task force recommend the people that are responsible for failures to definitely lose their jobs but the key thing the ending too big to fail is to make sure that unsecured creditors take some hits in some form and so the bankruptcy process is clearly one approach to this you could also accomplish that same haircut in an administrative process but the pain the second point i would just elaborate on what bob said this notion of there's a huge debate now about whether or not we ought that extensively we came down where bob said which is we would not just across the board eliminate all too big because there are benefits of size especially in the global market but what we do say is that all large institutions ought to file this this funeral plan or there's one down plan with the regulators and the regulators would have the ability if they are unhappy with the wind down plan and see that it would not it would not go go forth in a way that would protect the financial system they would have the authority to chop the institution operate order to be chopped up only in that circumstance so we're against across the board size limits but  i want to thank you all very much for what you said in your testimonies and the response that you've given to these questions and the complexity of this situation is clearly in the context of the questions but even more so in the context of the answers to the question we're dealing with a very very difficult and dangerous set of circumstances economically for the future of this country and one of the things that strikes me is the huge financial institutions of them now hold half of the mortgages in america issue nearly two thirds of our credit cards and hold roughly forty percent of all bank deposits that strikes me as an absolutely fascinating set of circumstances and why we allowed that to happen was a very big mistake and when we allowed it to happen intentionally we were out of the habit intentionally because there was a great interest on the part of some people to make as much money as possible and engage in this financial operation in ways that can be most beneficial to them and if it had some benefits to others well you know that might not be so bad but the fact of the matter is that hasn't been precisely the case because of the size of these institutions that's one of the main reasons why the economic class class that we experience came about one of the things that strikes me is th whole idea of too big to fail if we have a situation where something is too big to fail then we're just saying to ourselves turning everything over to them they're going to do whatever they want and all of the consequences of that are going to blow up on everybody else so nothing should be too big to fail and the regulation of setting forth something that is that is not that it's not going to be too big is also very important i think that ought to be some analysis or some acceptance of the idea too big to exist we should not allow these institutions that are this size to actually come into play here and to engage in the circumstances that they've engaged in particularly with regard to the way in which there has been this combined operation of commercial and investment banks and how that operation in and of itself significant role and the impact of the economy that began to fall in the end of two thousand  what do you think that we should be doing about that what is it that we should be engaged in here a number of the pieces of legislation that have come forward are constructive they are moving in the right direction but they're moving  slowly in the right direction i think that there are more things that need to be done we see what happened back in the one nine hundred thirty s when there was less basic legislation passed  combinations that we've seen and the effects the adverse effects of those combination in the media the manipulation of investment activities all of that is now much clearer to us and we need to stop that from happening in the future and that was done we have gradually weakened that process and then we completely eliminated it just a decade ago now we've got to go back to something that is much more positive maybe you could talk a bill of mine that will bring transparency and accountability seven hundred billion dollars in tarp funds and that's an important bill and i have to go to the floor but i would like to ask a necessarily the issue of credit rating agencies is incredibly complex no one disagrees at least none of the experts disagree that they were at the heart of a crisis among many other  causes and what they were doing in clearly that contributor crisis is that they were writing instruments on the basis of very limited history and then extrapolating that they would have aaa ratings and we all know now that that was deeply mistaken by the way so two similar mistakes were made by bond insurers so the question is what to do are our task force debated this extensively i can't tell you there is a silver bullet to fixing the rating agencies what we end up recommending is that we replace the letter grades that they now give with a suggestion of not a requirement that the rating agencies tell us what we really want to know which is what is their estimated probability of the fall of the bond and then have an agency or at least private sector organizations track  predictions so that the investing public knows how good these forecasts are and then the u s government could have a choice if it sees an agency that is consistently overestimating  be some price to be paid for consistently going out to the public with overoptimistic writings now my personal view on the public utility model is and i'm not sure we extensively debated this within the commission my own personal view is i'm not wildly enthusiastic about it you've got to remember that all of our bank regulators all of them had major failures and so i don't have a lot of confidence that another government agency  a lot of the things that were done and i know they may have been dealing with limited information but we had testimony that there were folks who were just not being honest and maybe that's why you would have such a problem trying to come up with solutions well the core of the problem is this is that there's an inherent conflict as you know and just because the way the market has developed people can free ride on the information and so the only way they can stay in business up to now is by charging the people who issue the bonds and that right there a blatant conflict and frankly given the state of the market i'm not sure we know how to fix it except all we can do maybe is think of ways penalize in these guys requirements to induce that so in effect what we would say is if you're a big bank and you have an a position that is not on a clearing house or exchange you have a much higher capital charge very strong  direction that talks about the reason why the clearing houses are so important is that we then a little bilateral situation where laterally responsible to its counter parties and you have  how i cut my teeth and academia i've been through this i've seen this movie before this movie will happen again the best that we can hope for and this is what i think you should tell the american people is that this bill will system was citi group but the rest of the big banks that got their trouble were not really mixing commercial banking and any great degree so i don't view the graham bill which eliminated the vestiges of glass steagall which by became too big to fail well if you look at these names that i rattled off they're all pretty big even as investment banks as commercial banks so i would go to the i would conclude by looking at the recommendation of the