| 00:00:02 | WAS FIXATED ON THE NATIONAL DEBT, BUT IT'S MORE THAN THE NATIONAL DEBT WE SHOULD BE WORRIED ABOUT. |
| 00:00:09 | PEOPLE IN THE WASHINGTON FORGOT ABOUT THE DEBT THAT PUT US IN THE DEEP RECESSION AND COST OUR COUNTRY AND ALMOST EVERYONE IN IT SO MUCH, AND THAT'S THE DEBT OF THE FINANCIAL SECTOR. |
| 00:00:19 | CBO ESTIMATES THE ENTIRE COST OF RESCUING THE FAILING BANKING SYSTEM, NEW SPENDING PROGRAMS IN RESPONSE TO THE TROUBLED ECONOMY AND INTEREST PAYMENTS WILL COST OUR NATION SOME $8. |
| 00:00:36 | 6 TRILLION MEANS EIGHT THOUSANDS TRAIL DOLLARS. |
| 00:00:40 | THAT'S MORE THAN 6% OF THE GDP. |
| 00:00:45 | THIS PLAYED AND CAUSED THE DEEPEST RECESSION SINCE THE GREAT DEPRESSION, AND THAT'S THE PURPOSE OF THIS HEARING. |
| 00:00:51 | IN NEARLY THE LAST CENTURY AND A HALF, U. |
| 00:00:54 | S. CAPITAL RATES DECLINED FROM 25% AND ALL OF YOU WROTE AND THOUGHT ABOUT THIS A LOT DECLINED TO 5% OF TOTAL ASSETS. |
| 00:01:05 | IN THE LAST TWO DECADES, THE TEN LARGEST BANKS DOUBLED LEVERAGE. |
| 00:01:09 | THAT IS THEY HAVE HALVED ASSETS AVAILABLE TO PAY OFF THAT DEBT. |
| 00:01:14 | THE TIME OF THE FINANCIAL CRISIS IN 2007 AND 2008, FOUR OF OUR FIVE LARGEST INVESTMENT BANKS WERE LEVERAGED 35 AND IN ONE CASE 40 TO 1. |
| 00:01:27 | WHEN ASSETS DECLINE BY THE SMALLEST AMOUNT, THEY ARE UNABLE TO COVER -- PAY THEIR DEBTS. |
| 00:01:34 | THIS OVERRELIANCE OF BORROWING FROM OTHER BUSINESSES MAKES THE FINANCIAL SYSTEM SO INTERCONNECTEDDED AND INTERDEPENDENT THAT THE FAILURE OF ONE FIRM CAN BRING DOWN ONE SECTOR AND THE ENTIRE ECONOMY. |
| 00:01:48 | THIS GIVES COMPANIES AN INCENTIVE TO ENGAGE IN WHAT ECONOMISTS HAVE CALLED LOOTING. |
| 00:01:56 | COMPANIES CAN RISK BANKRUPTCY VIA THE RISK OF THE SOCIETY. |
| 00:02:02 | ACCORDING TO KANSAS CITY PRESIDENT, THE 20 BANKS THAT ARE HIGHLY LEVERAGED THAN THE COMMUNITY BANK COMPETITORS, IF I CAN USE THE WORD "COMPETITORS" IN THIS CASE. |
| 00:02:15 | IT'S ASSUMED THE GOVERNMENT WILL STEP IN TO PREVENT THEM FROM FAILING. |
| 00:02:18 | AS A RESULT, THE LARGEST BANKS MAKE BIGGER PROFITS THAN THOSE WHO DO NOT ENJOY GOVERNMENT SUBSIDIES. |
| 00:02:25 | THEY ARE LEAST ABLE TO WEATHER ECONOMIC DOWN TUNS BECAUSE OF THAT LEVERAGE, AND NOT SURPRISINGLY, THE LARGEST BANKS ARE BIGGER THAN BEFORE. |
| 00:02:36 | PRIOR TO 2006, THEY HELD 68% OF TOTAL BANK ASSETS. |
| 00:02:41 | BY 2010, THEY HELD 77% OF TOTAL BANKING ASSETS. |
| 00:02:46 | WERE THERE ANOTHER ECONOMIC CALAMITY, BAILING THE BANKS OUT AGAIN IMPOSES AN EVEN HIGHER COST ON TAXPAYERS. |
| 00:02:54 | THIS IS NOT CAPITALISM IN ANY SENSE OF THE WORD. |
| 00:02:57 | TO PREVENT THE NEED OF BAILOUTS IS SIMPLE IS REQUIRING BANKS TO HOLD RESERVES. |
| 00:03:03 | THEY REQUIRE BANKS TO FUND THEMSELVES USING THEIR OWN MONEY INSTEAD OF OTHER PEOPLE'S MONEYS. |
| 00:03:08 | LAST TUESDAY THE RANKING MEMBER OF THE FULL COMMITTEE SAID ONE OF THE LESSONS OF THE FINANCIAL CRISIS SHOULD BE THE IMPORTANCE OF MAINTAINING STRONG CAPITAL REQUIREMENTS ESPECIALLY FOR LARGE GLOBAL BANKS. |
| 00:03:19 | I COULDN'T AGREE MORE. |
| 00:03:20 | THE LEAST WE CAN DO IS ASK THE FINANCIAL SECTOR HAVE HAVE ITS OWN MONEY TO COVER ITS OWN LOSSES. |
| 00:03:27 | WE REQUIRE AS MUCH OF THE COMMUNITY BANKS, MUCH LESS A THREAT TO OUR SYSTEM AND THE SAME RULE SHOULD APPLY TO EVERYONE. |
| 00:03:34 | THAT'S WHY WE'RE HAVING THIS HEARING TODAY AND TESTIFYING ARE SOME OF THE NATION'S GREATEST ECONOMIC MINDS THAT HAVE GREAT INSIGHT INTO ALL OF THIS. |
| 00:03:44 | LET ME INTRODUCE THE FOUR OF YOU, AND WE'LL THEN CALL ON ALL |
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