| 00:00:20 |
Johnson, Tim P. - U.S. Senator, [D] South Dakota
SECRETARY. >>> THIS HEARING IS CALLED TO ORDER. IT IS ALSO AN OPPORTUNITY TO DISCUSS WHETHER BANK REGULATORS THE IMPLICATIONS OF THE LAWS. ON A BANK...
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| 00:08:16 |
Shelby, Richard C. - U.S. Senator, [R] Alabama
THANK YOU MR. CHAIRMAN AND THANK YOU FOR CALLING THIS VERY, VERY IMPORTANT HEARING AND TO OUR PANELISTS TODAY. WELCOME AGAIN. I THINK WE HAVE SPENT A...
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| 00:15:04 |
Johnson, Tim P. - U.S. Senator, [D] South Dakota
MORNING OPENING STATEMENTS WILL BE LIMITED TO THE CHAIRMAN AND RANKING MEMBER TO ALLOW MORE TIME FOR QUESTIONS FROM THE COMMITTEE MEMBERS. I WANT...
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| 00:16:20 |
Wolin, Neal - Deputy Secretary
RECORD. SECRETARY WALLEN, YOU MAY BEGIN YOUR TESTIMONY. >> MEMBERS OF THE COMMITTEE, THANK YOU FOR THE OPPORTUNITY TO APPEAR TODAY TO DISCUSS IMPLEMENTATION...
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| 00:21:36 |
Tarullo, Daniel K. - Member
YOU ARE ALL PROBABLY FAMILIAR WITH THE CONCEPT OF THE LAW AND THE INSTRUMENT BUT YOU MAY KNOW IT AS THE LAW OF THE HAMMER. IF YOU ARE HOLDING A HAMMER...
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| 00:25:31 |
Curry, Thomas J. - Comptroller of the Currency
CHAIRMAN JOHNSON AND RANKING MEMBER SHELBY AND COMMITTEE MEMBERS. THANK YOU FOR THE OPPORTUNITY TO UPDATE YOU ON OUR IMPLEMENTATION OF THE DODD-FRANK...
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| 00:30:49 |
Gruenberg, Martin J. - Chair
THE OPPORTUNITY TO TESTIFY TODAY ON THE FDIC'S EFFORTS TO ENHANCE BANK SUPERVISION AND REDUCE SYSTEMIC RISK. THE MOST IMPORTANT NEW FDIC AUTHORITIES...
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| 00:35:52 |
Cordray, Richard - Director
PROCEED. >> THANK YOU FOR THE OPPORTUNITY TO TESTIFY TODAY AS PART OF THIS PANEL OF MY COLLEAGUES. AS THE DIRECTOR OF THE CONSUMER FINANCIAL PROTECTION...
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| 00:40:54 |
Johnson, Tim P. - U.S. Senator, [D] South Dakota
AND SUPPORT A VIBRANT FINANCIAL SYSTEM. I'M HAPPY TO ANSWER ANY QUESTIONS YOU MAY HAVE. >> THANK YOU. I WOULD LIKE TO THANK ALL OF OUR WITNESSES...
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| 00:41:21 |
Q&A, -
TO MITIGATE SUCH A LARGE LOSS. WAS THIS A FAILURE IN RISK MANAGEMENT?
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| 00:41:28 |
Curry, Thomas J. - Comptroller of the Currency
IF SO WHAT SHOULD THE BANK HAVE DONE DIFFERENTLY? >> IN ESSENCE WE BELIEVE THAT THE ISSUE IS ONE OF INADEQUATE RISK MANAGEMENT WITHIN THE OFFICE OF...
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| 00:45:34 |
Wolin, Neal - Deputy Secretary
IMPLICATIONS ON THE WALL STREET REFORM RULE MAKINGS THAT HAVE YET TO BE COMPLETED? >> OBVIOUSLY THE LOSS AT JP MORGAN CHASE WAS A BIG LOSS AND ONE THAT...
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| 00:47:59 |
Tarullo, Daniel K. - Member
WOULD JUST SAY THAT ONE THING ABOUT THE EUROZONE PROBLEMS, THEY'VE BEEN WITH US FOR SOME TIME, WHERE WE'VE BEEN ABLE TO REGULARIZE A SYSTEM OF...
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| 00:48:55 |
Shelby, Richard C. - U.S. Senator, [R] Alabama
READ AND WHAT I NOTE, THE
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| 00:48:58 |
Q&A, -
STRESS TEST JP MORGAN WENT THROUGH AND SO FORTH FORTH. I'VE BEEN TOLD THAT THEY WOULD HAVE TO SUSTAIN LOSSES 40 TIMES -- IN OTHER WORDS, 70, $80 BILLION...
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| 00:49:23 |
Tarullo, Daniel K. - Member
IN THE STRESS TEST, WHAT WE DID WITH THE TRADING WAS TO ASSUME AN INSTANTANEOUS SHOCK BASED ON OUR VERY ADVERSE SCENARIO, WHICH ENTAIL TRADING LOSSES...
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| 00:50:26 |
Curry, Thomas J. - Comptroller of the Currency
THAT'S -- >> COMPLICATED. >> THAT'S ACTUALLY THE KEY QUESTION THAT WE'RE TRYING TO ADDRESS, SENATOR, REALLY IS WHAT ACTUALLY HAPPEN EDED IN THIS PARTICULAR...
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| 00:56:10 |
Reed, John "Jack" F. - U.S. Senator, [D] Rhode Island
SENATOR REID? >> THANK YOU VERY MUCH. MR. CURRY, YOU HAVE
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| 00:56:16 |
Q&A, -
65 PERSONNEL
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| 00:56:18 |
Curry, Thomas J. - Comptroller of the Currency
DEVOTE DEVOTED TO SUPERVISION. HOW MANY ARE IN LONDON? >> WE HAVE FIVE INDIVIDUALS WHO UH, RESIDE OR HOUSE IN OUR LONDON OFFICE. >> AND THEY'RE RESPONSIBLE...
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| 01:00:58 |
Wolin, Neal - Deputy Secretary
STRONGER POSITION. >> SENATOR, I THINK THAT BOTH DODD-FRANK AND THE ABILITY OF THE FINANCIAL OVERSIGHT COUNCIL TO COME TOGETHER AND DISCUSS AND UNDERSTAND...
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| 01:01:48 |
Tarullo, Daniel K. - Member
THAT BEGINNING IN 2008 AND WITH THE HEARINGS CONDUCTED BY THIS COMMITTEE AND YOUR COUNTERPARTS IN THE HOUSE IN 2009 ON REFORM, THERE JUST WAS A SEA CHANGE...
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| 01:02:37 |
Corker, Bob - U.S. Senator, [R] Tennessee
THANK YOU FOR THE HEARING. I HOPE WE'RE SUCCESSFUL ON THE MARKUP BILL. THAT'S A REAL MARKUP. HOPEFULLY, IT WILL HAPPEN SOON. 2,400 PAGES, BIG LEGISLATION,...
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| 01:02:55 |
Q&A, -
IN THE REAR VIEW MIRROR, IT'S APPARENT TO ME THAT DODD-FRANK WAS A POLITICAL RESPONSE TO A -- INSTEAD OF REAL REFORM IN SO MANY WAYS. I DO HOPE THAT...
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| 01:06:12 |
Wolin, Neal - Deputy Secretary
IMPLEMENTED? STARTING WITH YOU, NEAL. >> AS THE STATUTE SAYS AND AS YOU QUOTED IT CORRECTLY, IF YOU'RE HEDGING SOMETHING THAT IS RELATED TO THAT,...
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| 01:08:16 |
Tarullo, Daniel K. - Member
OF THE DISTINCTION BETWEEN PROPRIETARY AND MARKET MAKING AND THE DISTINCTION NOW IS BETWEEN PROPRIETARY TRADING AND A HEDGING TRADE. WHEN YOU ASK...
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| 01:09:53 |
Curry, Thomas J. - Comptroller of the Currency
STANDPOINT, WE EXPECT ALL THINGS, LARGE OR SMALL, TO HAVE ROBUST AND COMPREHENSIVE LIABILITY MANAGEMENT POLICIES AND PRACTICES IN PLACE. >> AND...
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| 01:10:37 |
Gruenberg, Martin J. - Chair
ADDRESS. ADDRESS. >> SENATOR, THE CENTRAL ISSUE HERE IS THAT HEDGING IS A RISK AS OPPOSED TO WHAT WE GET INTO SPECULATIVE NATURE WHERE YOU'RE REALLY...
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| 01:12:01 |
Warner, Mark R. - U.S. Senator, [D] Virginia
BIT WHERE MY FRIEND, SENATOR CORKER, LEFT OFF. YOU ARE STILL HERE MONTHS AFTER -- AT LEAST LOOKING INTO SOME OF THESE JP MORGAN ACTIVITIES, TRYING...
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| 01:12:13 |
Q&A, -
THEIR STRATEGY. AND I BELIEVE GOVERNOR TARULLO SAID THAT ONE OF THE RESULTS OF WHAT YOU ENVISION OF VOLKER RULE BEING IMPLEMENTED MIGHT BE IS THAT...
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| 01:13:26 |
Curry, Thomas J. - Comptroller of the Currency
THE DISCUSSION ON THE VOLKER RULE AND JP MORGAN CHASE, WE DON'T KNOW ALL THE FACTS. I THINK THAT'S IMPORTANT BEFORE YOU MAKE ANY JUDGMENT ABOUT THE...
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| 01:14:27 |
Tarullo, Daniel K. - Member
COMPTROLLER HAS BEEN ADDRESSING THE ISSUE, IS THIS A PROPRIETARY TRADE? HE IS SAYING, I BELIEVE, THAT HE DOESN'T HAVE INFORMATION IF VOLKER WERE IN...
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| 01:16:46 |
Gruenberg, Martin J. - Chair
AND THE REQUIREMENT IS THAT YOU HAVE TO MAKE A JUDGMENT AS TO WHETHER THE PLAN COULD CREDIBLY RESULT IN AN UNWINDING OF THE INSTITUTIONS WITH THE STANDARDS...
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| 01:17:55 |
Tarullo, Daniel K. - Member
POSSIBLE TO TAYLOR A LOT OF PLANS. OUR REVIEW OF THE PLANS THAT ARE SUBMITTED IS GOING TO NEED TO INCLUDE BASIC QUESTIONS ABOUT THE ONGOING STRUCTURE...
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| 01:19:02 |
Crapo, Michael "Mike" - U.S. Senator, [R] Idaho
FIRST OOH FIRST, I WANT TO INDICATE I STRONGLY AGREE WITH THE TENOR OF THE QUESTIONS WE HEARD FROM SENATOR CORKER AND SENATOR WARNER WITH REGARD...
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| 01:19:14 |
Q&A, -
THOROUGHLY. I'M NOT GOING TO GO INTO THAT FURTHER MYSELF. I ENCOURAGE YOU TO TAKE THEIR COMMENTS TO HEART AS WE MOVE FORWARD. I'M VERY CONCERNED...
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| 01:20:27 |
Cordray, Richard - Director
THIS PROPOSED RULE? >> THANK YOU, SENATOR, FOR THE QUESTION ABOUT THE QUALIFIED MORTGAGE OR ABILITY TO REPAY RULE. ONE OF THE REASONS WE DID REOPEN THE...
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| 01:22:57 |
Gruenberg, Martin J. - Chair
BUT THERE IS A LOGIC TO THAT. >> MR. CURRY, DO YOU AGREE? >> I THINK THAT'S A NECESSARY COMPONENT TO THE ENTIRE PACKAGE OF RULE MAKING, THE QRM AND THE...
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| 01:23:53 |
Tarullo, Daniel K. - Member
CONTEXT OR THE -- >> THAT'S MY UNDERSTANDING, YES. >> SO, WITH RESPECT TO THE STRESS TESTING, WHAT WE'RE TRYING TO DO IN STRESS TESTS IS MAKE OUR...
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| 01:26:30 |
Merkley, Jeffery "Jeff" - U.S. Senator, [D] Oregon
LONDON WHALE WHO RAN JPMC'S UNIT WOKE UP EACH DAY TRYING TO MITIGATE THE RISK FROM DEPOSITS INVESTED BETWEEN LOANS IN BONDS? >> THAT IS A RELATED AREA...
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| 01:27:45 |
Curry, Thomas J. - Comptroller of the Currency
AND SMALL BUSINESSES? >> Reporter: WE >> WE AT THE OCC ARE VERY SUPPORTIVE TO SMALL BUSINESS LOANING AT THE ENTIRE SPECTRUM OF BUSINESS LOANS THAT...
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| 01:32:40 |
Toomey, Pat - U.S. Senator, [R] Pennsylvania
YOU, MR. CHAIRMAN. I WOULD LIKE TO START BY ALSO ACKNOWLEDGING MR. TARULLO'S COMMENT ABOUT THE IMPORTANCE OF CAPITAL. AND I KNOW YOU'VE GIVEN A GREAT...
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| 01:32:55 |
Q&A, -
CONSIDERED THIS IN A VERY SOPHISTICATED WAY. AND I JUST -- MAY BE MANY THINGS YOU AND I DISAGREE ON, BUT MANAGEMENT OF CAPITAL OUGHT TO BE THE RIGHT...
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| 01:39:14 |
Menendez, Robert "Bob" - U.S. Senator, [D] New Jersey
CHAIRMAN. >> MR. CURRY, I WANT TO ASK YOU ABOUT JP MORGAN LOSING $2 BILLION OR MORE AND BEING TOO COZY WITH THE BANKS
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| 01:39:30 |
Q&A, -
IT REGULATES. I KNOW YOU JUST GOT TO YOUR NEW POSITION HERE. YOU HAVE AN OPPORTUNITY TO DECIDE WHAT THE OCC DOES IN THE FUTURE I FIND IT INTERESTING....
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| 01:41:24 |
Curry, Thomas J. - Comptroller of the Currency
SEE WHAT THE BANK ITSELF DID OR DID WRONG, BUT ALSO HOW WE CAN IMPROVE OUR SUPERVISORY PROCESSES AT THE OCC. SO, IT WILL BE A CRITICAL SELF REVIEW...
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| 01:45:02 |
Moran, Jerry - U.S. Senator, [R] Kansas
HAS HELD IN REGARD TO OVERSIGHT OF THE IMPLEMENTATION OF DODD-FRANK. WHEN I ASKED FOR COMMITTEE ASSIGNMENTS A YEAR AND A HALF AGO, I ASKED FOR THE BANKING...
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| 01:45:23 |
Q&A, -
HEYDAY HAS COME AND GONE. IMPLEMENTATION, MODIFICATION OF DODD-FRANK, TO ME IS A VERY IMPORTANT TASK FOR THIS CONGRESS. AND ONE THAT I WANTED TO...
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| 01:48:44 |
Curry, Thomas J. - Comptroller of the Currency
TO GO. I THINK BY INFORMED, I MEAN THAT OUR EXPERIENCE WITH THE LEVEL OF RISK MANAGEMENT THAT IS PRESENT AT THE CIO'S OFFICE THAT WAS ENGAGED IN ACTIVITY...
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| 01:49:36 |
Tarullo, Daniel K. - Member
WHAT -- WHAT SOMEONE WILL DO -- WE NEED PEOPLE TO RUN THROUGH THIS TO SAY, WE HAVE A SITUATION IN WHICH THE FIRM HAS PUBLICLY SAID THEY DIDN'T THINK...
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| 01:50:47 |
Bennet, Michael - U.S. Senator, [D] Colorado
AND WANT TO HAVE AS EFFICIENT A CAPITAL MARKET AT POSSIBLE, PROFITABLE CAPITAL MARKET A SECURE CAPITAL MARKET IN THIS COUNTRY, BUT I JUST WANT TO BE...
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| 01:52:42 |
Q&A, -
LIKE. WHAT WILL YOU CONSIDER AS YOU THINK ABOUT DEFINING THAT, BECAUSE I THINK YOU'RE QUITE RIGHT. WE CAN LEARN SOMETHING FROM THAT, AND THOSE OF...
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| 01:53:04 |
Curry, Thomas J. - Comptroller of the Currency
A TWO-PRONGED APPROACH TO THIS PARTICULAR ISSUE. NUMBER ONE, WE WANT TO FULLY UNDERSTAND THE NATURE OF THE -- OF THE HEDGE OR TRADING ACTIVITY AT...
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| 01:55:05 |
Tarullo, Daniel K. - Member
FACT THAT AT LEAST IN MY OBSERVATION, THE MODELS THAT FINANCIAL FIRMS DO, VAR MODELS AND ASSOCIATE THE KINDS OF MODELING TO DETERMINE LOSSES FROM ANY...
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| 01:56:05 |
Wolin, Neal - Deputy Secretary
MEETINGS IN LOS KAUP BOWES WILL BE AN OPPORTUNITY OPPORTUNITY FOR THEM TO MAKE FURTHER PROGRESS WITH TROP THEIR BANK, CAPITAL OF BANKS, RESTRUCTURING...
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| 01:57:12 |
Brown, Sherrod - U.S. Senator, [D] Ohio
US. I'M GLAD TO HEAR ME COLLEAGUES ON BOTH SIDES OF THE AISLE TALK ABOUT CAPITAL REQUIREMENTS. THEY SEEMED LESS CONVINCED DURING THE DRAWING UP OF...
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| 01:57:24 |
Q&A, -
LOOK AND ESPECIALLY THE DISCUSSION FOR MR. TOOMEY AND MR. MORAN ON THE IMPORTANCE OF HIGHER CAPITAL REQUIREMENTS. MR. CURRY, MY QUESTIONS WILL BE WITH...
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| 01:59:09 |
Curry, Thomas J. - Comptroller of the Currency
YOU PRIOR TO JAMIE DIMON'S TESTIMONY. >> THANK YOU. >> IN THIS ANSWER I THINK THE ANSWER IS, NO, NOT IN THE PARTICULAR CASE OF THE CIO'S OFFICE....
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| 02:03:26 |
Schumer, Charles E. - U.S. Senator, [D] New York
ROLE OF RISK MCT AT BANKS ESPECIALLY LARGE BANKS, AS SOME OF YOU KNOW, I FOUGHT TO HAVE INCLUDED IN DODD-FRANK A PROVISION, SECTION 165H REQUIRING...
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| 02:04:29 |
Q&A, -
EXPERTISE? >>
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| 02:04:32 |
Curry, Thomas J. - Comptroller of the Currency
THE RISK -- THE INTRODUCTION OF A RISK COMMITTEE THROUGH DODD FRANK I THINK IS A WELCOME IMPROVEMENT TO THE OVERALL CORPORATE GOVERNANCE OF FINANCIAL...
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| 02:05:51 |
Tarullo, Daniel K. - Member
ENHANCE THE PRO DESCHUDENTIAL STANDARDS, MEANING FOR LARGE INSTITUTIONS, THE LARGE INSTITUTION SUPERVISION COMMITTEE WILL LOOK AT EACH AND COMPARE THEM....
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| 02:07:14 |
Curry, Thomas J. - Comptroller of the Currency
LONDON OPERATIONS AT JPMORGAN ARE CONDUCTED THROUGH A BRANCH OF THE UNITED STATES NATIONAL BANKS. SO IN TERMS OF JURISDICTION, WE HAVE CLEAR JURISDICTION...
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| 02:09:21 |
Tarullo, Daniel K. - Member
EARLY WARNING. SECONDLY, SENATOR, WE DO ALREADY WITHIN OUR SUPERVISORY PROCESS LOOK AT MARKET INDICATORS INCLUDING AGGREGATED MARKET INFORMATION...
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| 02:10:53 |
Curry, Thomas J. - Comptroller of the Currency
IT WOULD HAVE BEEN VERY HELPFUL IF THERE WERE MARKET OR OTHER DATA AVAILABLE THAT WOULD HIGHLIGHT THIS CONCENTRATION TO US AS A REGULATOR SO TO THE...
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| 02:11:43 |
Shelby, Richard C. - U.S. Senator, [R] Alabama
THANK YOU. GOVERNOR TARULLO, IN YOUR TESTIMONY, YOU
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| 02:11:48 |
Q&A, -
STAY, AND I'LL QUOTE, AND I WANT TO BE LIKE SENATOR TOOMEY AND AGREE WITH YOU ON THIS. AND YOU SAID -- RECENT EVENTS SERVE TO REMIND US THAT THE PRESENCE...
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| 02:12:46 |
Tarullo, Daniel K. - Member
YOU KNOW, I -- BECAUSE I BELIEVE THE CENTRALITY OF CAPITAL. I DON'T THINK IT'S THE ONLY WAY. >> OH, NO. >> BUT IT IS A CENTRAL WAY. >> BUT IT'S NUMBER...
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| 02:16:21 |
Johnson, Tim P. - U.S. Senator, [D] South Dakota
THANK YOU ALL FOR YOUR TESTIMONY, AND FOR BEING HERE WITH US TODAY. NOW, WITH A CONTINUED THREAT FROM EUROPE AND THE RECENT REMINDER THAT RISKS AND THE...
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NOTE: The transcript for this program was compiled from uncorrected Closed Captioning.