1 00:00:00,880 --> 00:00:04,360 Speaker 1: You're listening to the Bloomberg Sound on podcast. Catch us 2 00:00:04,400 --> 00:00:07,560 Speaker 1: live weekdays at one Eastern on Bloomberg dot com, the 3 00:00:07,680 --> 00:00:10,760 Speaker 1: iHeartRadio app and the Bloomberg Business app, or listen on 4 00:00:10,800 --> 00:00:12,800 Speaker 1: demand wherever you get your podcasts. 5 00:00:14,400 --> 00:00:16,720 Speaker 2: And Genie Shanzano and Rick Davis are with us, our 6 00:00:16,760 --> 00:00:21,040 Speaker 2: signature panel Bloomberg Politics contributors with important news out today 7 00:00:21,079 --> 00:00:23,279 Speaker 2: if you're just joining us or just getting your head 8 00:00:23,400 --> 00:00:25,400 Speaker 2: into the news cycle. The FED is out with its 9 00:00:26,079 --> 00:00:29,560 Speaker 2: review on the collapse of SVB, the Fence Bank Supervision Chief. 10 00:00:29,600 --> 00:00:33,559 Speaker 2: You're Michael Barr calling for an extensive reevaluation of how 11 00:00:33,560 --> 00:00:37,800 Speaker 2: the institution oversees financial firms. Now looking at a line 12 00:00:37,880 --> 00:00:40,839 Speaker 2: at one hundred billion dollars in assets, there would be 13 00:00:40,880 --> 00:00:44,839 Speaker 2: added stress testing, added liquidity requirements and so forth. And 14 00:00:44,880 --> 00:00:47,280 Speaker 2: it brings us back to that hearing that I mentioned. 15 00:00:47,320 --> 00:00:49,199 Speaker 2: This is at the end of March, the House Financial 16 00:00:49,200 --> 00:00:52,600 Speaker 2: Services Committee. They bring Michael Barr up before lawmakers to 17 00:00:52,640 --> 00:00:55,640 Speaker 2: answer tough questions, and it really came down to was 18 00:00:55,680 --> 00:00:58,640 Speaker 2: this due to a lack of regulations? And Senator Bob 19 00:00:58,640 --> 00:00:59,480 Speaker 2: Menendez got to that. 20 00:00:59,680 --> 00:01:02,520 Speaker 3: You agree with President Biden's statement two weeks ago that 21 00:01:02,600 --> 00:01:05,240 Speaker 3: Congress should strengthen rules for banks to make it less 22 00:01:05,360 --> 00:01:08,200 Speaker 3: likely that we will see another failure similar to that 23 00:01:08,280 --> 00:01:09,400 Speaker 3: of Silicon Valley Bank. 24 00:01:12,040 --> 00:01:14,319 Speaker 4: Thank you, Sentaer. I think it's important for us to 25 00:01:14,400 --> 00:01:18,560 Speaker 4: strengthen capital and liquidity rules. We're working on strengthening them 26 00:01:18,640 --> 00:01:21,319 Speaker 4: as part of our Basil three reforms and our holistic 27 00:01:21,360 --> 00:01:24,200 Speaker 4: review of capital, and I think we need to move 28 00:01:24,240 --> 00:01:27,800 Speaker 4: forward with that. And as both Greenberg and I suggested, 29 00:01:28,319 --> 00:01:31,319 Speaker 4: with a long term debt requirement, that would provide an 30 00:01:31,360 --> 00:01:35,960 Speaker 4: additional cushion in addition to capital for large institutions. 31 00:01:36,040 --> 00:01:37,880 Speaker 2: So, if you've been paying attention on the twenty eighth 32 00:01:37,880 --> 00:01:40,040 Speaker 2: of March, listen to that hearing. You almost could have 33 00:01:40,080 --> 00:01:43,760 Speaker 2: written the story today describing this new report. Rick Davis, 34 00:01:43,920 --> 00:01:47,240 Speaker 2: Genie Shanzano again with us here, Genie, what does this 35 00:01:47,319 --> 00:01:50,040 Speaker 2: tell us about the push and pull? And I realized 36 00:01:50,080 --> 00:01:52,320 Speaker 2: the FED can do this without legislation, But the push 37 00:01:52,360 --> 00:01:55,639 Speaker 2: and pull between Democrats and Republicans on what was to blame, 38 00:01:56,040 --> 00:01:58,800 Speaker 2: what needed to be done, and whether Dodd Frank should 39 00:01:58,800 --> 00:02:01,120 Speaker 2: have been pulled apart if that helped lead to this. 40 00:02:01,080 --> 00:02:04,640 Speaker 5: Collapse, well, you know, I thought this was a really 41 00:02:04,760 --> 00:02:07,279 Speaker 5: tough internal review, and that was one of the things 42 00:02:07,280 --> 00:02:09,960 Speaker 5: that was questioned in the aftermath of this, You know, 43 00:02:09,960 --> 00:02:13,040 Speaker 5: would an internal review be enough? I think an external 44 00:02:13,120 --> 00:02:15,360 Speaker 5: is fine, but this was tough. But I think the 45 00:02:15,480 --> 00:02:17,560 Speaker 5: problem is it's a sort of an all of the 46 00:02:17,639 --> 00:02:20,920 Speaker 5: above answer, and I'm not so sure that's going to 47 00:02:20,960 --> 00:02:24,160 Speaker 5: help politically in this push and pull between Democrats and Republicans, 48 00:02:24,200 --> 00:02:27,000 Speaker 5: because you read this report and they blame the bank, 49 00:02:27,120 --> 00:02:30,080 Speaker 5: they blame the federal supervisors, and they blame the regulators 50 00:02:30,120 --> 00:02:33,360 Speaker 5: for the regulations were being rolled back. So if somebody 51 00:02:33,440 --> 00:02:36,200 Speaker 5: was looking to place the blame in one area or another, 52 00:02:36,480 --> 00:02:38,800 Speaker 5: they're not going to be satisfied when they say the 53 00:02:38,840 --> 00:02:42,320 Speaker 5: blame is all around. And so of course the solutions 54 00:02:42,360 --> 00:02:45,160 Speaker 5: are going to have to be as broad as the 55 00:02:45,160 --> 00:02:47,880 Speaker 5: blame is. And so there I think we are going 56 00:02:47,919 --> 00:02:51,040 Speaker 5: to continue to see some fighting between Democrats and Republicans 57 00:02:51,240 --> 00:02:54,480 Speaker 5: on what actually happened and where they should focus their 58 00:02:54,520 --> 00:02:55,720 Speaker 5: attention going forward. 59 00:02:56,520 --> 00:02:59,800 Speaker 2: Rick Patrick McHenry, who of course chairs the Financial Services 60 00:03:00,280 --> 00:03:03,640 Speaker 2: that I just mentioned here Republican calls the report self 61 00:03:03,720 --> 00:03:07,000 Speaker 2: serving and says the bulk appears to be a justification 62 00:03:07,080 --> 00:03:11,000 Speaker 2: of Democrats' long held priorities. So this is going nowhere 63 00:03:11,560 --> 00:03:15,480 Speaker 2: in terms of sort of inspiring a reaction from Capitol 64 00:03:15,520 --> 00:03:18,240 Speaker 2: Hill in terms of legislation or any new regulations. 65 00:03:18,440 --> 00:03:20,400 Speaker 6: Yeah, I think it points out that there is a 66 00:03:20,480 --> 00:03:23,880 Speaker 6: difference in how Republicans, certainly in the House of Representatives, 67 00:03:23,919 --> 00:03:29,560 Speaker 6: look at this bank failure, not as a lack of regulation, 68 00:03:29,760 --> 00:03:33,440 Speaker 6: but regulation may be directed in the wrong way and 69 00:03:33,720 --> 00:03:37,480 Speaker 6: lack of oversight due to the fact that the regulations 70 00:03:37,480 --> 00:03:40,080 Speaker 6: are already on the books weren't being adhered to. So 71 00:03:40,520 --> 00:03:45,560 Speaker 6: I think that Chairman McHenry is concerned about overreach. They're 72 00:03:45,560 --> 00:03:49,920 Speaker 6: concerned about the Biden administration priorities being embedded in the FED, 73 00:03:52,000 --> 00:03:53,680 Speaker 6: and so I think you're going to see a difference 74 00:03:53,920 --> 00:03:57,280 Speaker 6: in how Congress reacts to this report. 75 00:03:57,520 --> 00:04:01,320 Speaker 2: The GAO out with its own report ged that is 76 00:04:01,400 --> 00:04:06,200 Speaker 2: more critical of the foot dragging on SVB, as Bloomberg Reports, says, 77 00:04:06,200 --> 00:04:09,520 Speaker 2: the San Francisco Fed's actions lacked urgency, and that sounds 78 00:04:09,960 --> 00:04:12,040 Speaker 2: a lot like what we heard from Senator Ted Cruz 79 00:04:12,080 --> 00:04:14,040 Speaker 2: the other night he and Jim Jordan. Now, with that 80 00:04:14,120 --> 00:04:18,800 Speaker 2: letter specifically targeting the San Francisco FED, could Republican lawmakers 81 00:04:19,839 --> 00:04:22,680 Speaker 2: create some momentum behind that effort. 82 00:04:24,320 --> 00:04:26,520 Speaker 5: I think they could, and I think they should. I 83 00:04:26,560 --> 00:04:29,520 Speaker 5: think there were many troubling aspects as we began to 84 00:04:29,600 --> 00:04:32,000 Speaker 5: learn in the aftermath of the fall and the failure 85 00:04:32,360 --> 00:04:34,560 Speaker 5: what was happening at the San Francisco FED. And I 86 00:04:34,600 --> 00:04:37,640 Speaker 5: think it would be difficult for anybody to push back 87 00:04:37,720 --> 00:04:38,080 Speaker 5: on that. 88 00:04:38,320 --> 00:04:39,719 Speaker 7: Well, that would ten point the blame. 89 00:04:39,800 --> 00:04:43,360 Speaker 2: Based on your prior comment, that's that's a finger being 90 00:04:43,360 --> 00:04:44,240 Speaker 2: pointed right there. 91 00:04:45,120 --> 00:04:47,600 Speaker 5: Yeah. But my read of this is he is pointing 92 00:04:47,640 --> 00:04:50,840 Speaker 5: fingers almost everywhere. And that's what I mean when it 93 00:04:50,880 --> 00:04:53,200 Speaker 5: was sorted with all of the above, you read this thing, 94 00:04:53,640 --> 00:04:56,120 Speaker 5: and he is pointing fingers everywhere, and I think the 95 00:04:56,200 --> 00:04:59,640 Speaker 5: problem with that politically is then it becomes nowhere. And 96 00:04:59,720 --> 00:05:01,960 Speaker 5: so I think what's going to be fascinating to see 97 00:05:02,080 --> 00:05:05,000 Speaker 5: is how they move forward on this, and that's where 98 00:05:05,040 --> 00:05:07,320 Speaker 5: I think we may see still the need for an 99 00:05:07,360 --> 00:05:10,359 Speaker 5: external review. And you know, I think what is really 100 00:05:10,400 --> 00:05:13,680 Speaker 5: troubling is if you look at what was you know, 101 00:05:13,800 --> 00:05:16,839 Speaker 5: the report going through all this detail about the troubles 102 00:05:16,880 --> 00:05:20,280 Speaker 5: identified by the FED supervisors that were not followed up on, 103 00:05:20,360 --> 00:05:22,440 Speaker 5: I think to me that was the most you know, 104 00:05:22,839 --> 00:05:25,640 Speaker 5: frustrating part of this entire thing. What was known was 105 00:05:25,720 --> 00:05:26,400 Speaker 5: not addressed. 106 00:05:26,720 --> 00:05:28,039 Speaker 2: How do you what do you think, Rick, is the 107 00:05:28,080 --> 00:05:31,640 Speaker 2: GAO right here. The San Francisco FED should be held accountable. 108 00:05:31,920 --> 00:05:34,080 Speaker 6: You know, I think there's some culpability by the San 109 00:05:34,120 --> 00:05:38,200 Speaker 6: Francisco Fed. I mean, this report clearly points out that 110 00:05:38,880 --> 00:05:43,920 Speaker 6: warning signs were ignored, warning signs were not acted upon 111 00:05:44,000 --> 00:05:47,360 Speaker 6: in a timely fashion. And and I think that there's 112 00:05:47,880 --> 00:05:51,080 Speaker 6: this report I think does a good job of pointing 113 00:05:51,080 --> 00:05:55,200 Speaker 6: out vulnerabilities that the FED, the San Francisco FED had. 114 00:05:55,480 --> 00:05:57,800 Speaker 6: I would say, we have another report coming out later 115 00:05:57,839 --> 00:06:02,479 Speaker 6: this afternoon from the FDIC that is, you know, focused 116 00:06:02,480 --> 00:06:06,560 Speaker 6: on States chartered banks like Signature Bank, and it'll be 117 00:06:06,600 --> 00:06:10,719 Speaker 6: interesting to see what the comparisons are between the analysis 118 00:06:11,360 --> 00:06:14,039 Speaker 6: Signature Bank going down and how that compares to what 119 00:06:14,120 --> 00:06:15,080 Speaker 6: happened with SVB. 120 00:06:15,800 --> 00:06:17,599 Speaker 2: I guess it makes it easy, Genie, if the FED 121 00:06:17,640 --> 00:06:20,520 Speaker 2: can do this on its own, because the politics behind 122 00:06:20,520 --> 00:06:23,080 Speaker 2: this are going nowhere, right, We're not going to see 123 00:06:23,120 --> 00:06:25,200 Speaker 2: it sounds like anything coming off a Capitol hill unless 124 00:06:25,240 --> 00:06:28,480 Speaker 2: there really is some further evidence of contagion and that 125 00:06:28,760 --> 00:06:31,120 Speaker 2: apparently does not include First Republic Bank. 126 00:06:32,480 --> 00:06:34,480 Speaker 5: That's right, And you know, I think it does make 127 00:06:34,480 --> 00:06:36,240 Speaker 5: it easier if they can do it on their own. 128 00:06:36,279 --> 00:06:38,360 Speaker 5: But again, I don't think it's going to make too 129 00:06:38,400 --> 00:06:41,560 Speaker 5: many people happy, and so that is I think sort 130 00:06:41,560 --> 00:06:44,400 Speaker 5: of the push and pullbyc here. They're probably going to 131 00:06:44,440 --> 00:06:47,080 Speaker 5: act on their own and I think there's still going 132 00:06:47,160 --> 00:06:49,880 Speaker 5: to be a human cry that it isn't enough and 133 00:06:50,000 --> 00:06:53,280 Speaker 5: other steps need to be taken. But as usual in 134 00:06:53,320 --> 00:06:56,159 Speaker 5: all of these capacities, we're hard pressed at this point 135 00:06:56,200 --> 00:06:59,240 Speaker 5: to turn to Congress to make any real changes. So 136 00:06:59,400 --> 00:07:01,080 Speaker 5: we're going to hear a lot of wrangling and a 137 00:07:01,120 --> 00:07:03,599 Speaker 5: lot of yelling, but not a lot of action taken. 138 00:07:03,640 --> 00:07:06,600 Speaker 5: And that's the frustrating part for you know, consumers who 139 00:07:06,640 --> 00:07:08,680 Speaker 5: are sitting out here watching this sort of go back 140 00:07:08,720 --> 00:07:09,200 Speaker 5: and forth. 141 00:07:09,320 --> 00:07:11,280 Speaker 2: Well, just in general, I mean, the House is out 142 00:07:11,360 --> 00:07:14,160 Speaker 2: now right, the Speakers on his way to Israel, and 143 00:07:14,160 --> 00:07:16,640 Speaker 2: they've got a debt ceiling and a budget to deal 144 00:07:16,760 --> 00:07:19,320 Speaker 2: with in a major standoff with the White House here. 145 00:07:19,400 --> 00:07:23,240 Speaker 2: So Rick, the dance card is full, right, Yeah, I. 146 00:07:23,160 --> 00:07:24,280 Speaker 7: Think the dance card is full. 147 00:07:24,360 --> 00:07:28,360 Speaker 6: I don't see the political calculus driving an outcome in 148 00:07:28,440 --> 00:07:31,960 Speaker 6: the Senator of the House for new legislation or increased 149 00:07:33,040 --> 00:07:38,280 Speaker 6: bank supervision, bank regulations. You know, Tim Scott, who's you know, 150 00:07:39,840 --> 00:07:44,120 Speaker 6: looking at a political run for president, you know, sort 151 00:07:44,120 --> 00:07:47,120 Speaker 6: of the worst timing in Congress, but had just sent 152 00:07:47,160 --> 00:07:49,760 Speaker 6: a letter to the Fed, you know, suggesting that they 153 00:07:50,400 --> 00:07:54,400 Speaker 6: lighten up on regulations dealing with banks. There was some 154 00:07:54,600 --> 00:07:57,680 Speaker 6: impetus at that time on a Republican led effort. But 155 00:07:57,920 --> 00:08:01,000 Speaker 6: I think after this crisis, all that's going to disappear. 156 00:08:02,040 --> 00:08:05,040 Speaker 6: In the FAT seems intent to do their own thing 157 00:08:05,520 --> 00:08:09,440 Speaker 6: and increase their supervisory practices, which hopefully we'll add to 158 00:08:09,600 --> 00:08:11,040 Speaker 6: the stability of the banking system. 159 00:08:11,280 --> 00:08:13,880 Speaker 2: Around this time yesterday we were talking to Genes Spurling 160 00:08:14,280 --> 00:08:16,960 Speaker 2: at the White House. Genie, we got his take on things. 161 00:08:17,000 --> 00:08:20,720 Speaker 2: No negotiating over the debt ceiling. Nothing's really happened since then. 162 00:08:21,160 --> 00:08:22,800 Speaker 2: This standoff is going to go through the weekend. We're 163 00:08:22,840 --> 00:08:25,560 Speaker 2: going to get in next week. Speaker McCarthy's going to 164 00:08:25,600 --> 00:08:27,960 Speaker 2: be overseas. What's there going to be news on this? 165 00:08:29,400 --> 00:08:31,560 Speaker 5: You know. I hope there is news soon, but of course, 166 00:08:31,560 --> 00:08:34,760 Speaker 5: as you mentioned, the calendar is not looking open to that. 167 00:08:35,200 --> 00:08:38,400 Speaker 5: And with the Speaker overseas and the President sticking to 168 00:08:38,520 --> 00:08:41,920 Speaker 5: his argument that he is not going to negotiate on this, 169 00:08:42,720 --> 00:08:44,960 Speaker 5: I think the President in the White House would be 170 00:08:45,000 --> 00:08:48,679 Speaker 5: wise to invite the Republican leadership in and say let's 171 00:08:48,720 --> 00:08:50,960 Speaker 5: raise the debt ceiling. Let's have a talk about the budget, 172 00:08:50,960 --> 00:08:53,800 Speaker 5: and at least get those conversations rolling, because at this 173 00:08:53,960 --> 00:08:57,400 Speaker 5: point the calendar is working against it and we could 174 00:08:57,480 --> 00:08:59,280 Speaker 5: be up against a wall. As they come back. 175 00:09:00,080 --> 00:09:02,240 Speaker 2: We could get a next date as soon as today, Rick, 176 00:09:02,280 --> 00:09:04,480 Speaker 2: It's not expected that will actually happen. It could be 177 00:09:04,480 --> 00:09:07,640 Speaker 2: the beginning of next week when that arrives. Is it 178 00:09:07,640 --> 00:09:09,720 Speaker 2: going to feel different all of a sudden people start 179 00:09:09,720 --> 00:09:11,280 Speaker 2: to loosen up a little bit, start. 180 00:09:11,040 --> 00:09:12,440 Speaker 7: Talking, I hope. 181 00:09:12,440 --> 00:09:12,520 Speaker 5: So. 182 00:09:12,800 --> 00:09:15,000 Speaker 6: I think that those kinds of things, you know, putting 183 00:09:15,000 --> 00:09:17,280 Speaker 6: a date on when the government runs out of funds 184 00:09:17,480 --> 00:09:19,760 Speaker 6: is a great way to sort of create an action 185 00:09:19,920 --> 00:09:23,840 Speaker 6: forcing event. Otherwise it just seems too ephemeral and allows 186 00:09:23,880 --> 00:09:26,720 Speaker 6: the president to sort of, you know, avoid a confrontation 187 00:09:26,800 --> 00:09:29,920 Speaker 6: with Congress. There's going to be a confrontation with Congress, 188 00:09:29,920 --> 00:09:31,960 Speaker 6: and so the sooner we get it done, sooner we 189 00:09:32,000 --> 00:09:33,680 Speaker 6: get it over with, the better off will be. And 190 00:09:33,720 --> 00:09:35,880 Speaker 6: so I think both parties, the Speaker and the present 191 00:09:36,200 --> 00:09:38,280 Speaker 6: need to put on their big shoes and get together 192 00:09:38,520 --> 00:09:41,160 Speaker 6: and actually start doing the work that they're put into 193 00:09:41,200 --> 00:09:41,760 Speaker 6: office to do. 194 00:09:42,080 --> 00:09:44,199 Speaker 2: But your big shoes on, says Rick Davis. And you 195 00:09:44,240 --> 00:09:45,760 Speaker 2: know when, of course, we get the X date, you'll 196 00:09:45,760 --> 00:09:48,680 Speaker 2: hear about it first here on Bloomberg. Either here on 197 00:09:48,720 --> 00:09:51,079 Speaker 2: Bloomberg Radio or on your terminal. 198 00:09:52,000 --> 00:09:55,360 Speaker 1: You're listening to the Bloomberg Sound on podcast. Catch the 199 00:09:55,400 --> 00:09:59,240 Speaker 1: program live weekdays at one Eastern on Bloomberg Radio, the 200 00:09:59,360 --> 00:10:02,000 Speaker 1: Tune in a Half, Bloomberg dot Com, and the Bloomberg 201 00:10:02,040 --> 00:10:05,320 Speaker 1: Business App. You can also listen live on Amazon Alexa 202 00:10:05,360 --> 00:10:08,800 Speaker 1: from our flagship New York station, Just Say Alexa played 203 00:10:08,880 --> 00:10:11,480 Speaker 1: Bloomberg eleven thirty. 204 00:10:12,240 --> 00:10:16,480 Speaker 2: This news broke just yesterday, only about twenty four hours 205 00:10:16,520 --> 00:10:19,720 Speaker 2: after a court had overturned a challenge from Donald Trump 206 00:10:20,000 --> 00:10:22,760 Speaker 2: to keep Mike Pence from testifying, and roughly a week 207 00:10:22,760 --> 00:10:26,120 Speaker 2: ago he spoke with CBS News about the whole thing. 208 00:10:26,200 --> 00:10:27,040 Speaker 7: We'll obey the law. 209 00:10:27,480 --> 00:10:30,280 Speaker 5: We'll tell the truth and the story that I've been 210 00:10:30,320 --> 00:10:32,800 Speaker 5: telling the American people all across the country, the story 211 00:10:32,800 --> 00:10:34,760 Speaker 5: that I wrote in the pages of my memoir Little 212 00:10:35,480 --> 00:10:37,319 Speaker 5: That'll be what I tell in that setting as well. 213 00:10:37,440 --> 00:10:38,520 Speaker 7: No, it's good to sell the book. 214 00:10:38,559 --> 00:10:41,600 Speaker 2: Well, you right, let's reassemble the panel. Genie Shanzo and 215 00:10:41,720 --> 00:10:44,840 Speaker 2: Rick Davis are with us Bloomberg Politics contributors. Rick He 216 00:10:44,920 --> 00:10:49,480 Speaker 2: reported the sat for five hours of testimony, a couple 217 00:10:49,480 --> 00:10:51,320 Speaker 2: of black SUVs whisked him away. 218 00:10:51,320 --> 00:10:52,080 Speaker 7: What does all this mean? 219 00:10:52,640 --> 00:10:55,040 Speaker 6: And that means that that was a very long period 220 00:10:55,040 --> 00:10:58,720 Speaker 6: of time to be talking about a very short kind 221 00:10:58,760 --> 00:11:02,440 Speaker 6: of moment in American history. And I remind everybody that 222 00:11:02,520 --> 00:11:07,000 Speaker 6: this was his testimony all about illegal acts that might 223 00:11:07,040 --> 00:11:12,080 Speaker 6: have been taken by Donald Trump in relation to the 224 00:11:12,160 --> 00:11:15,800 Speaker 6: certification of the Electoral College. I mean, so five hours 225 00:11:15,840 --> 00:11:23,800 Speaker 6: on that one thing is extraordinary and it's impressive. The 226 00:11:24,000 --> 00:11:27,200 Speaker 6: courts worked in a way that denied Donald Trump the 227 00:11:27,240 --> 00:11:30,520 Speaker 6: secrecy that he wanted around his interactions with Pence, and 228 00:11:30,559 --> 00:11:33,520 Speaker 6: that Pence was willing to testify to what he knows 229 00:11:33,640 --> 00:11:38,720 Speaker 6: about that situation. And it'll be interesting to see how 230 00:11:39,040 --> 00:11:43,480 Speaker 6: fast then the Special Council's case will move as it 231 00:11:43,520 --> 00:11:45,280 Speaker 6: relates to this one specific charge. 232 00:11:45,360 --> 00:11:47,480 Speaker 2: I'll tell you he sure didn't wait around. After the 233 00:11:48,000 --> 00:11:50,560 Speaker 2: appeals court ruled twenty four hours later, the former vice 234 00:11:50,559 --> 00:11:54,800 Speaker 2: President's in the seat, Genie with details at least as 235 00:11:54,840 --> 00:11:57,880 Speaker 2: we understand, and what's being reported about what Donald Trump 236 00:11:57,880 --> 00:12:00,440 Speaker 2: and his allies did in the days and hours before 237 00:12:01,440 --> 00:12:04,240 Speaker 2: the attack. On the Capitol and of course first hand 238 00:12:04,280 --> 00:12:08,840 Speaker 2: conversations coming from Mike Pence. How damaging is this if 239 00:12:08,840 --> 00:12:10,120 Speaker 2: at all for Donald Trump. 240 00:12:11,679 --> 00:12:15,280 Speaker 5: It is potentially very damaging, and it is quite stunning. 241 00:12:15,320 --> 00:12:17,400 Speaker 5: I mean, this is the first time in the modern 242 00:12:17,480 --> 00:12:20,400 Speaker 5: era we've seen a vice president give testimony in a 243 00:12:20,440 --> 00:12:25,600 Speaker 5: criminal investigation against a president that they served for and who, 244 00:12:25,640 --> 00:12:27,920 Speaker 5: by the way, they may be running against in the 245 00:12:28,000 --> 00:12:31,880 Speaker 5: upcoming election. It is quite extraordinary. You'd couple that with 246 00:12:32,000 --> 00:12:34,200 Speaker 5: the fact that with all of the news going on, 247 00:12:34,320 --> 00:12:37,760 Speaker 5: from Donald Trump's indictments, to the trial with e. Gene Carroll, 248 00:12:37,840 --> 00:12:40,839 Speaker 5: to everything else going on. I was struck too by 249 00:12:40,880 --> 00:12:44,160 Speaker 5: the fact that it hasn't consumed the airwaves for you know, 250 00:12:44,880 --> 00:12:48,000 Speaker 5: the entire time, because it is that potentially important, and 251 00:12:48,320 --> 00:12:52,239 Speaker 5: we know it's important because Donald Trump is by all accounts, 252 00:12:52,600 --> 00:12:55,800 Speaker 5: the Special Counsel is what he is most frightened about. 253 00:12:55,800 --> 00:13:00,160 Speaker 5: The Special Council investigators and the Special Council investigation. This 254 00:13:00,200 --> 00:13:03,280 Speaker 5: has long been his number one concern. He's turning to 255 00:13:03,360 --> 00:13:06,920 Speaker 5: Republicans in the House to help pushing on the Department 256 00:13:07,000 --> 00:13:10,040 Speaker 5: of Justice and others in terms of making the case 257 00:13:10,040 --> 00:13:13,160 Speaker 5: that they are politicized in case he is you know, 258 00:13:13,400 --> 00:13:16,800 Speaker 5: does see an indictment in the in the in the 259 00:13:16,840 --> 00:13:19,680 Speaker 5: offing and going down the pike, that he would be 260 00:13:19,679 --> 00:13:22,080 Speaker 5: able to say that it is as politicized as he's 261 00:13:22,080 --> 00:13:25,000 Speaker 5: been able to argue Alvin Gregg's indictment has been. So 262 00:13:25,080 --> 00:13:27,800 Speaker 5: we know he and his team are very scared about 263 00:13:27,800 --> 00:13:29,680 Speaker 5: what's coming out of this Jacksmith investigation. 264 00:13:29,760 --> 00:13:34,280 Speaker 2: Potentially incredible split screen. As Mike Pence is testifying here 265 00:13:34,320 --> 00:13:39,079 Speaker 2: in Washington for five hours recalling the events of January sixth, 266 00:13:39,120 --> 00:13:41,760 Speaker 2: Donald Trump is in New Hampshire on the stop. 267 00:13:41,840 --> 00:13:46,559 Speaker 4: So these debates, you know, Nixon and Reagan and. 268 00:13:48,000 --> 00:13:53,000 Speaker 1: Bush, Bush number one others, Bush gets boomed. 269 00:13:54,040 --> 00:13:55,000 Speaker 2: No, they didn't debate. 270 00:13:55,040 --> 00:13:57,880 Speaker 4: In the primers, they didn't debate. I mean, seriously, you 271 00:13:57,920 --> 00:13:58,839 Speaker 4: look at the boards and. 272 00:13:58,800 --> 00:14:03,079 Speaker 3: You see these things one percent, three percent, and you 273 00:14:03,160 --> 00:14:05,679 Speaker 3: look at it, these numbers and I'm and I'm we're. 274 00:14:05,520 --> 00:14:07,400 Speaker 8: At sixty and seventy percent. 275 00:14:08,080 --> 00:14:09,080 Speaker 7: Why would you do that? 276 00:14:10,040 --> 00:14:12,880 Speaker 3: Well, you want intelligent people, don't you to be running there? 277 00:14:13,200 --> 00:14:15,839 Speaker 2: So you heard Rick Davis already, I believe on this 278 00:14:15,920 --> 00:14:20,560 Speaker 2: program predict that Donald Trump may never appear on a 279 00:14:20,640 --> 00:14:23,320 Speaker 2: debate stage. And Rick he just went there, didn't he? 280 00:14:23,760 --> 00:14:26,440 Speaker 6: Yeah, I think this reinforces everything we know about the guy, 281 00:14:26,480 --> 00:14:28,840 Speaker 6: which is, if you're running ahead of the field, why 282 00:14:28,920 --> 00:14:30,440 Speaker 6: let the field catch up to you at debate? 283 00:14:30,560 --> 00:14:32,240 Speaker 2: And yes, and I can only. 284 00:14:32,160 --> 00:14:33,960 Speaker 6: Imagine how much fun it would be to see if 285 00:14:34,000 --> 00:14:37,200 Speaker 6: Mike Pence actually gets into this election, the two of 286 00:14:37,240 --> 00:14:40,640 Speaker 6: them up on the debate stage. So, uh, yeah, this 287 00:14:40,680 --> 00:14:42,840 Speaker 6: is everything you would expect out of Donald Trump, right, 288 00:14:43,040 --> 00:14:45,360 Speaker 6: I mean, it's my ball. I'm taking my ball and 289 00:14:45,400 --> 00:14:47,280 Speaker 6: going out and playing with it all by myself. 290 00:14:47,680 --> 00:14:48,040 Speaker 7: Uh. 291 00:14:48,080 --> 00:14:50,680 Speaker 6: That being said, it does create an opening for someone 292 00:14:50,720 --> 00:14:52,640 Speaker 6: to merge out of the pack to be the contender. 293 00:14:52,720 --> 00:14:55,440 Speaker 6: And so you know, if part of his strategy is 294 00:14:55,480 --> 00:14:59,040 Speaker 6: to tamp down people who might be growing politically then 295 00:14:59,120 --> 00:15:02,080 Speaker 6: challenge him for the primary, at some point in time, 296 00:15:02,120 --> 00:15:04,320 Speaker 6: he may be forced into a situation where a rearguard 297 00:15:04,400 --> 00:15:06,360 Speaker 6: action forces him to have to go and debate. 298 00:15:06,960 --> 00:15:10,560 Speaker 2: Incredibly, he says Genie, though, until he's looking forward to 299 00:15:10,680 --> 00:15:15,480 Speaker 2: debating Joe, he's actually now taken Hillary Clinton's crooked Hillary. 300 00:15:15,520 --> 00:15:18,600 Speaker 2: Now it's Crooked Joe Biden. He retired the name for 301 00:15:18,680 --> 00:15:21,720 Speaker 2: Hillary and formally made the announcement in the speech, gave 302 00:15:21,760 --> 00:15:25,280 Speaker 2: it to Joe Biden by the way the Bush Nixon 303 00:15:25,480 --> 00:15:30,560 Speaker 2: Reagan thing they were. They were running for consecutive reelection. 304 00:15:30,680 --> 00:15:32,440 Speaker 2: Isn't that kind of the difference. They were the incumbent. 305 00:15:33,920 --> 00:15:37,800 Speaker 5: Oh details, Joe Mappen, I'm sorry, get concerned with that. Yeah, 306 00:15:37,840 --> 00:15:40,720 Speaker 5: And she is now I talked to somebody who was there. 307 00:15:40,760 --> 00:15:44,640 Speaker 5: She is now lovely Hillary or beautiful Hillary, while Joe 308 00:15:44,640 --> 00:15:48,600 Speaker 5: Biden becomes crooked Joe so or crooked Biden. And of 309 00:15:48,640 --> 00:15:51,960 Speaker 5: course we've been talking about this. Joe Biden and Donald 310 00:15:51,960 --> 00:15:54,600 Speaker 5: Trump cannot quit each other. They do love each other. 311 00:15:54,680 --> 00:15:57,400 Speaker 5: They want to just get to that debate together. But 312 00:15:57,480 --> 00:16:00,720 Speaker 5: the American public have different views. And to Rick's point, 313 00:16:00,760 --> 00:16:03,520 Speaker 5: I mean, I think the real danger here is this 314 00:16:03,600 --> 00:16:07,280 Speaker 5: is a guy facing enormous indictments. You cannot make that 315 00:16:07,440 --> 00:16:10,680 Speaker 5: a good winning campaign theme. So while he's ahead now, 316 00:16:10,880 --> 00:16:13,760 Speaker 5: that could turn in the future. And who is going 317 00:16:13,800 --> 00:16:15,800 Speaker 5: to be standing there? I mean, it was stunning. I 318 00:16:15,800 --> 00:16:18,640 Speaker 5: was reading a piece by Mike Murphy and The Bulwark 319 00:16:18,680 --> 00:16:21,080 Speaker 5: and he was saying, he goes to Iowa. As much 320 00:16:21,120 --> 00:16:23,640 Speaker 5: as they like Trump and what he did, they do 321 00:16:23,720 --> 00:16:26,000 Speaker 5: not want him and do not see him as being 322 00:16:26,400 --> 00:16:29,640 Speaker 5: the winner of the Republican primary. And so if you 323 00:16:29,680 --> 00:16:32,080 Speaker 5: look at it state by state. He's got some work 324 00:16:32,160 --> 00:16:34,600 Speaker 5: to do, and somebody like the Santis or somebody else 325 00:16:34,640 --> 00:16:35,520 Speaker 5: could catch up to him. 326 00:16:35,680 --> 00:16:38,480 Speaker 2: I have to admit, Rick, I thought we'd be more 327 00:16:38,480 --> 00:16:40,520 Speaker 2: creative than crooked Joe Biden. 328 00:16:40,560 --> 00:16:43,080 Speaker 7: Is that gonna stick? I hope he comes up with. 329 00:16:43,040 --> 00:16:45,480 Speaker 6: Something new because it would be more entertaining than just 330 00:16:45,520 --> 00:16:49,160 Speaker 6: a rehafh of the Hillary nicknames. And I'm still looking 331 00:16:49,160 --> 00:16:51,120 Speaker 6: forward to the rest of the field getting their nicknames. 332 00:16:51,160 --> 00:16:53,480 Speaker 6: I mean, Nicky is gone without one. She served in 333 00:16:53,520 --> 00:16:57,160 Speaker 6: his administration. She deserves a nickname for sure. And if 334 00:16:57,200 --> 00:17:00,000 Speaker 6: all we ever get out of this Donald Trump campaign 335 00:17:00,200 --> 00:17:04,360 Speaker 6: for president is entertainment value of him calling people names, 336 00:17:04,000 --> 00:17:07,520 Speaker 6: at least that will be a recap of the twenty 337 00:17:07,600 --> 00:17:08,320 Speaker 6: sixteen election. 338 00:17:08,520 --> 00:17:11,080 Speaker 7: Good thing. We yeah, we have seen that before exactly. 339 00:17:11,600 --> 00:17:15,000 Speaker 1: If you're listening to the Bloomberg Sound On podcast, catch 340 00:17:15,080 --> 00:17:18,320 Speaker 1: us live weekdays at one Eastern on Bloomberg dot Com, 341 00:17:18,359 --> 00:17:21,440 Speaker 1: the iHeartRadio app and the Bloomberg Business app, or listen 342 00:17:21,520 --> 00:17:23,640 Speaker 1: on demand wherever you get your podcasts. 343 00:17:24,600 --> 00:17:27,480 Speaker 2: I'm Joe, Matthew and Washington, along with Kaylee Lines and 344 00:17:27,840 --> 00:17:31,320 Speaker 2: a one hundred two page report. Kaylee had the whole 345 00:17:31,359 --> 00:17:35,320 Speaker 2: thing printed out all over the time highlighted. Yeah, you've 346 00:17:35,320 --> 00:17:37,840 Speaker 2: probably read more of it than most Americans. Actually, this 347 00:17:37,920 --> 00:17:40,040 Speaker 2: is interesting. He was supposed to come out Monday. Do 348 00:17:40,119 --> 00:17:42,200 Speaker 2: we know why he was compelled by Michael bar decided 349 00:17:42,240 --> 00:17:44,000 Speaker 2: to do this on a Friday, because it's not a 350 00:17:44,040 --> 00:17:46,000 Speaker 2: Friday night news dump. We're all talking about it. 351 00:17:46,040 --> 00:17:47,760 Speaker 9: Well, the FED had always said it was going to 352 00:17:48,119 --> 00:17:51,400 Speaker 9: be released by May first, so that was kind of 353 00:17:51,440 --> 00:17:53,919 Speaker 9: the hard deadline. It had to come out by Monday. 354 00:17:53,920 --> 00:17:56,200 Speaker 9: And we have to consider that the FED, and specifically 355 00:17:56,240 --> 00:17:59,320 Speaker 9: the San Francisco FED, has been under a lot of pressure, 356 00:17:59,440 --> 00:18:03,240 Speaker 9: receiving letters from lawmakers like Senator Ted Kruz over just 357 00:18:03,320 --> 00:18:06,040 Speaker 9: the course of this week, so that may have accelerated 358 00:18:06,320 --> 00:18:09,560 Speaker 9: the timeline a little bit, an attempt to respond to 359 00:18:09,600 --> 00:18:10,800 Speaker 9: some of that growing pressure. 360 00:18:10,920 --> 00:18:13,760 Speaker 2: It's interesting last hour I went back to the hearing 361 00:18:14,359 --> 00:18:16,679 Speaker 2: because this is how wonky we are here. That Michael 362 00:18:16,680 --> 00:18:19,720 Speaker 2: Barr testified in the House Financial Services Committee hearing. I 363 00:18:19,760 --> 00:18:20,679 Speaker 2: think you might have been. 364 00:18:21,400 --> 00:18:22,040 Speaker 9: I was there yet. 365 00:18:22,119 --> 00:18:25,520 Speaker 2: It was the twenty ninth of March. If you listen 366 00:18:25,600 --> 00:18:28,520 Speaker 2: to what he says in terms of what more could 367 00:18:28,600 --> 00:18:32,280 Speaker 2: be done and looking at this report, just listen. 368 00:18:32,080 --> 00:18:35,200 Speaker 4: The events of the last few weeks raised questions about 369 00:18:35,200 --> 00:18:37,720 Speaker 4: what more can be done and should be done so 370 00:18:37,800 --> 00:18:41,879 Speaker 4: that isolated banking problems do not undermine confidence in healthy 371 00:18:41,920 --> 00:18:45,440 Speaker 4: banks and threatened the stability the banking system as a whole. 372 00:18:45,480 --> 00:18:49,720 Speaker 2: So he was asked by Bob Menendez about the changes 373 00:18:49,760 --> 00:18:51,639 Speaker 2: made to Dodd Frank a couple of years ago. This 374 00:18:51,680 --> 00:18:54,760 Speaker 2: is whatever we write as twenty one to fifty five 375 00:18:55,600 --> 00:18:58,280 Speaker 2: became big news around here as people went back to 376 00:18:58,320 --> 00:18:59,920 Speaker 2: find out if that might be to blame Bob and 377 00:19:00,200 --> 00:19:02,159 Speaker 2: has asked him about it that day. Listen to his 378 00:19:02,280 --> 00:19:04,960 Speaker 2: answer and think about what's in this report. 379 00:19:05,000 --> 00:19:07,800 Speaker 3: Do you agree with President Biden's statement two weeks ago 380 00:19:07,840 --> 00:19:10,239 Speaker 3: that Congress should strengthen rules for banks to make it 381 00:19:10,320 --> 00:19:13,480 Speaker 3: less likely that we will see another failure similar to 382 00:19:13,520 --> 00:19:14,800 Speaker 3: that of Silicon Valley Bank. 383 00:19:17,400 --> 00:19:19,720 Speaker 4: Thank you, Senator. I think it's important for us to 384 00:19:19,800 --> 00:19:23,960 Speaker 4: strengthen capital and liquidity rules. We're working on strengthening them 385 00:19:24,040 --> 00:19:26,720 Speaker 4: as part of our Basil three reforms and our holistic 386 00:19:26,760 --> 00:19:29,600 Speaker 4: review of capital, and I think we need to move 387 00:19:29,640 --> 00:19:33,199 Speaker 4: forward with that. And as both Greenberg and I suggested, 388 00:19:33,720 --> 00:19:36,720 Speaker 4: with a long term debt requirement that would provide an 389 00:19:36,760 --> 00:19:41,480 Speaker 4: additional cushion in addition to capital for large institutions. 390 00:19:42,040 --> 00:19:43,360 Speaker 7: But that's the report. 391 00:19:43,080 --> 00:19:48,040 Speaker 9: Today, right, Well, yes, they specifically address the Fed's response 392 00:19:48,119 --> 00:19:51,960 Speaker 9: supervisor's response to that rollback we saw past in twenty eighteen. 393 00:19:52,000 --> 00:19:54,560 Speaker 9: And the quote from the report directly is the Board's 394 00:19:54,560 --> 00:19:58,520 Speaker 9: tailoring approach, which is essentially applying different regulation to banks 395 00:19:58,520 --> 00:20:01,040 Speaker 9: of different sizes in respec to that Act and a 396 00:20:01,080 --> 00:20:05,560 Speaker 9: shift in the stance of supervisory policy impeded effective supervision 397 00:20:05,600 --> 00:20:10,040 Speaker 9: by reducing standards, increasing complexity, and promoting a less assertive 398 00:20:10,119 --> 00:20:13,119 Speaker 9: supervisory approach. And then they say elsewhere in the report, 399 00:20:13,280 --> 00:20:15,600 Speaker 9: we plan to revisit the tailoring framework. 400 00:20:15,680 --> 00:20:18,479 Speaker 2: Well, yeah, so here we are, and now it's on paper. 401 00:20:18,520 --> 00:20:20,520 Speaker 2: But interesting that this is coming from the same brain 402 00:20:20,600 --> 00:20:23,399 Speaker 2: that generated the report here that's making news today, and 403 00:20:23,440 --> 00:20:25,280 Speaker 2: we have a smart panel to get into all of 404 00:20:25,320 --> 00:20:28,560 Speaker 2: this what it actually means. Bloomberg Intelligence Senior analyst Alison 405 00:20:28,600 --> 00:20:32,000 Speaker 2: Williams joins us along with Bloomberg's Kate Davidson. Kate, I'll 406 00:20:32,000 --> 00:20:34,959 Speaker 2: start with you here, since we talked about this pretty 407 00:20:34,960 --> 00:20:38,320 Speaker 2: often and you've been a good voice of directions since 408 00:20:38,320 --> 00:20:41,440 Speaker 2: this all started happening. Here is this, first of all, 409 00:20:41,440 --> 00:20:43,000 Speaker 2: all we're going to get from the FED. This is 410 00:20:43,040 --> 00:20:45,639 Speaker 2: you know, the FED investigating the Fed. Is this going 411 00:20:45,680 --> 00:20:48,760 Speaker 2: to be their their sort of last word before changes 412 00:20:49,520 --> 00:20:50,120 Speaker 2: might be had? 413 00:20:50,760 --> 00:20:53,560 Speaker 10: Well, I think that this is meant to be their 414 00:20:53,880 --> 00:20:57,760 Speaker 10: sort of comprehensive look at what exactly went wrong. But 415 00:20:57,840 --> 00:20:59,719 Speaker 10: this is not the last we're hearing about this. I mean, 416 00:20:59,720 --> 00:21:01,520 Speaker 10: I think this is about to kick off a years 417 00:21:01,600 --> 00:21:05,600 Speaker 10: long process of probably the biggest effort to tighten bank 418 00:21:05,640 --> 00:21:08,640 Speaker 10: regulation since Dodd Frank. I mean, this is huge what's 419 00:21:08,680 --> 00:21:13,800 Speaker 10: being proposed or suggested contemplated in this report. So where 420 00:21:13,800 --> 00:21:17,119 Speaker 10: it goes from here, I think, you know there, there's 421 00:21:17,160 --> 00:21:19,320 Speaker 10: there's a lot that's happening. The bank lobby today is 422 00:21:19,359 --> 00:21:22,080 Speaker 10: scrambling to decipher all of this. 423 00:21:22,119 --> 00:21:24,240 Speaker 2: They giving it too, because this isn't going to come 424 00:21:24,240 --> 00:21:26,480 Speaker 2: from Congress, right, the FED is going to do this 425 00:21:26,560 --> 00:21:27,080 Speaker 2: on its own. 426 00:21:27,160 --> 00:21:30,040 Speaker 10: That's the thing. A senior FED official told our reporters 427 00:21:30,480 --> 00:21:33,040 Speaker 10: and others on a brief and call that these changes 428 00:21:33,080 --> 00:21:35,760 Speaker 10: can be made without legislative approval. So yes, this is 429 00:21:35,760 --> 00:21:38,639 Speaker 10: a this is a regulatory process, and we know and 430 00:21:38,640 --> 00:21:41,520 Speaker 10: the FED said, and the report I think Michael Barr 431 00:21:41,520 --> 00:21:43,800 Speaker 10: said in his letter, this will take several years, they're 432 00:21:43,800 --> 00:21:45,960 Speaker 10: going to have to, you know, write these rules, write 433 00:21:45,960 --> 00:21:48,640 Speaker 10: these proposals, they put them out for comment. Then that's 434 00:21:48,720 --> 00:21:51,040 Speaker 10: what the lobbying comes in. You know, tons of feedback 435 00:21:51,040 --> 00:21:53,960 Speaker 10: from the banking industry on you know, whether these go 436 00:21:54,080 --> 00:21:56,720 Speaker 10: too far, how they ought to be tweaked. But Michael 437 00:21:56,760 --> 00:21:58,520 Speaker 10: Barr can do this. I mean he only took a 438 00:21:58,800 --> 00:22:00,720 Speaker 10: took on the role last year. He's going to be 439 00:22:00,760 --> 00:22:02,720 Speaker 10: there for several more years, and so it might take 440 00:22:02,760 --> 00:22:05,760 Speaker 10: a while, but they seem pretty determined to move ahead 441 00:22:05,800 --> 00:22:06,520 Speaker 10: with these changes. 442 00:22:06,760 --> 00:22:06,920 Speaker 5: Right. 443 00:22:07,000 --> 00:22:09,280 Speaker 9: The door was left open in that Act in twenty 444 00:22:09,359 --> 00:22:13,920 Speaker 9: eighteen to provide stricter prudential standards to banks between that 445 00:22:13,960 --> 00:22:15,920 Speaker 9: one hundred and two hundred and fifty billion dollars in 446 00:22:16,000 --> 00:22:19,480 Speaker 9: asset level. So in theory it is within their authority. 447 00:22:19,480 --> 00:22:23,919 Speaker 9: But as we talk about the timeline here, Allison Banks 448 00:22:24,080 --> 00:22:27,720 Speaker 9: will then have in theory sometime to prepare. But ultimately, 449 00:22:27,760 --> 00:22:30,480 Speaker 9: what will the impact be for these mid size banks, 450 00:22:30,480 --> 00:22:33,400 Speaker 9: what kind of costs would be associated, how much could 451 00:22:33,400 --> 00:22:36,159 Speaker 9: it hurt ultimately their financial picture? And are we going 452 00:22:36,240 --> 00:22:38,639 Speaker 9: to have to see them consolidate perhaps as a result. 453 00:22:40,400 --> 00:22:45,800 Speaker 11: So I think, you know, obviously the end result will 454 00:22:45,960 --> 00:22:48,280 Speaker 11: will take some time, but there is no doubt that 455 00:22:48,400 --> 00:22:55,600 Speaker 11: some type of tighter regulation is coming. And it's interesting 456 00:22:55,640 --> 00:23:00,199 Speaker 11: because you bring up consolidation, but I think some of 457 00:23:00,200 --> 00:23:02,199 Speaker 11: the issues that have come up in some of the 458 00:23:02,280 --> 00:23:06,800 Speaker 11: thing regulations that are being sought are because sort of 459 00:23:06,840 --> 00:23:10,720 Speaker 11: the next uh tront or two of banks underneath the 460 00:23:11,160 --> 00:23:16,840 Speaker 11: most systemically important banks did not have the same regulation, 461 00:23:16,920 --> 00:23:19,960 Speaker 11: the same strictness in regulations, and in fact, some of 462 00:23:19,960 --> 00:23:24,360 Speaker 11: their regulations had been rolled back over the years. So 463 00:23:25,119 --> 00:23:29,360 Speaker 11: I think that that in and of itself wouldn't cause consolidation. 464 00:23:30,320 --> 00:23:33,719 Speaker 11: In general, where we've seen consolidation because of higher costs 465 00:23:33,720 --> 00:23:37,720 Speaker 11: has been the very small community banks, which is which 466 00:23:37,800 --> 00:23:40,399 Speaker 11: is not necessarily the audience. And I think that that 467 00:23:40,640 --> 00:23:45,679 Speaker 11: very small subset of banks tend to be, you know, 468 00:23:45,720 --> 00:23:49,640 Speaker 11: the areas that the regulators want to I guess protect 469 00:23:49,880 --> 00:23:51,520 Speaker 11: most if you will, because they tend to be the 470 00:23:51,800 --> 00:23:53,560 Speaker 11: smaller and the and the least complied. 471 00:23:54,520 --> 00:23:56,760 Speaker 2: So, okay, one hundred billion dollars would be the new 472 00:23:56,760 --> 00:24:00,000 Speaker 2: line here. Uh, if this in fact goes through that's 473 00:24:00,119 --> 00:24:03,720 Speaker 2: being proposed here essentially, right, If that were the case, 474 00:24:03,760 --> 00:24:07,840 Speaker 2: how many banks would that involve in terms of stress 475 00:24:07,880 --> 00:24:10,080 Speaker 2: testing that that might have been overlooked until then. 476 00:24:10,320 --> 00:24:12,280 Speaker 10: Yeah, that's a great question. I think through the cracks, 477 00:24:12,359 --> 00:24:15,000 Speaker 10: I think I think that number is around eight or nine. 478 00:24:15,760 --> 00:24:17,879 Speaker 10: Pretty small number, depending on whether or not you include 479 00:24:17,920 --> 00:24:19,320 Speaker 10: a first Republic. 480 00:24:18,920 --> 00:24:21,040 Speaker 9: In there, which is a kind of open question. 481 00:24:21,280 --> 00:24:22,280 Speaker 10: Yeah, that's why I'm saying it. 482 00:24:22,400 --> 00:24:22,640 Speaker 5: Or nine. 483 00:24:22,680 --> 00:24:25,000 Speaker 10: I think it was nine when with Silicon Valley Bank 484 00:24:25,040 --> 00:24:27,240 Speaker 10: and then and then obviously they're no longer in that group, 485 00:24:27,640 --> 00:24:31,560 Speaker 10: but it's about it's about seventeen banks that are kind 486 00:24:31,600 --> 00:24:34,080 Speaker 10: of below. You have the eight so called g SIPs, 487 00:24:34,119 --> 00:24:38,119 Speaker 10: the globally system global systemically important banks, and then you 488 00:24:38,119 --> 00:24:40,879 Speaker 10: know the mid size regional banks. There's about seventeen of 489 00:24:40,960 --> 00:24:44,000 Speaker 10: There were about seventeen of them in that group. But 490 00:24:44,400 --> 00:24:46,720 Speaker 10: that within that group, there's kind of the bigger ones 491 00:24:46,760 --> 00:24:48,760 Speaker 10: that have to have stress tests every year, and then 492 00:24:48,840 --> 00:24:51,399 Speaker 10: that kind of smaller group that Silicon Valley Bank was in, 493 00:24:51,440 --> 00:24:53,400 Speaker 10: and that's about eight or nine. And so for those 494 00:24:53,440 --> 00:24:55,280 Speaker 10: that's where it really is going to make a huge 495 00:24:55,280 --> 00:24:59,240 Speaker 10: difference in terms of the liquidity planning, the capital planning. 496 00:24:59,440 --> 00:25:03,200 Speaker 10: The annual stressed us are a big deal for these banks. 497 00:25:03,200 --> 00:25:05,480 Speaker 10: It requires a ton of work, a ton of compliance, 498 00:25:05,880 --> 00:25:09,439 Speaker 10: you know, an army of lawyers, and it seems like 499 00:25:09,440 --> 00:25:12,560 Speaker 10: they're headed back to kind of that pre twenty nineteen 500 00:25:12,600 --> 00:25:16,119 Speaker 10: regime before, you know, before there were those changes during 501 00:25:16,160 --> 00:25:17,080 Speaker 10: the Trump administration. 502 00:25:17,720 --> 00:25:20,720 Speaker 9: Well, and it does raise a question, Joe, when in 503 00:25:20,840 --> 00:25:23,720 Speaker 9: theory this is within the Fed's authority, if there is 504 00:25:23,760 --> 00:25:25,880 Speaker 9: going to be a degree of political pushback for trying 505 00:25:25,920 --> 00:25:28,120 Speaker 9: to make make these changes. I mean, we just got 506 00:25:28,119 --> 00:25:30,520 Speaker 9: a statement out from Senator Tim Scott, who is the 507 00:25:30,600 --> 00:25:33,480 Speaker 9: ranking member on the Senate Banking Committee, saying that they're 508 00:25:33,480 --> 00:25:37,239 Speaker 9: attempting to deflect blame by falsely using these failures as 509 00:25:37,280 --> 00:25:40,160 Speaker 9: a scapegoat to argue for additional authorities and a rollback 510 00:25:40,200 --> 00:25:42,639 Speaker 9: of the tailoring provisions. This is not going to go 511 00:25:42,760 --> 00:25:44,439 Speaker 9: down without some political fire as well. 512 00:25:44,720 --> 00:25:47,000 Speaker 2: Did you talk to Patrick McHenry You saw his statement 513 00:25:47,080 --> 00:25:50,840 Speaker 2: earlier as well, right, I mean, it's pretty consistent across 514 00:25:50,880 --> 00:25:53,760 Speaker 2: the board here, self serving, He says, the bulk of 515 00:25:53,760 --> 00:25:56,440 Speaker 2: the report appears to be a justification of Democrats long 516 00:25:56,440 --> 00:25:59,040 Speaker 2: held priorities, as if Elizabeth Warren wrote it herself. 517 00:26:00,040 --> 00:26:03,119 Speaker 9: Zabeth Warren sweeting about this today too. So as we 518 00:26:03,200 --> 00:26:05,439 Speaker 9: keep an eye on the politicians, Alison, obviously you are 519 00:26:05,520 --> 00:26:08,600 Speaker 9: keeping an eye on the bank fundamentals. As Kate was 520 00:26:08,640 --> 00:26:11,080 Speaker 9: just alluding to, you know, the number of mid size 521 00:26:11,119 --> 00:26:13,359 Speaker 9: banks has gone down because we've seen failures. There is 522 00:26:13,400 --> 00:26:15,080 Speaker 9: still a question as to whether or not we may 523 00:26:15,080 --> 00:26:20,200 Speaker 9: see another failure first Republic. The resolution there remains very 524 00:26:20,280 --> 00:26:23,840 Speaker 9: unclear as we think about that bank in particular and 525 00:26:23,880 --> 00:26:26,879 Speaker 9: its ultimate fate. Would its failure do you think be 526 00:26:26,920 --> 00:26:29,800 Speaker 9: a contained event or is it something that could potentially 527 00:26:29,920 --> 00:26:32,920 Speaker 9: reignite the crisis that all of this started with. 528 00:26:34,480 --> 00:26:37,120 Speaker 11: Well, I think, you know, and especially if you look 529 00:26:37,119 --> 00:26:39,840 Speaker 11: at the stocks and the way they're behaving, even the 530 00:26:39,920 --> 00:26:43,560 Speaker 11: banks that have sort of tied their faith to this 531 00:26:43,600 --> 00:26:46,720 Speaker 11: one by giving thirty billion dollars, you know, those stocks 532 00:26:46,720 --> 00:26:50,960 Speaker 11: are acting fine. And I think that you know, in 533 00:26:51,040 --> 00:26:54,880 Speaker 11: March what we saw is sort of a widespread turmoil 534 00:26:55,600 --> 00:26:59,560 Speaker 11: and a lot of deposit movement, but in general from 535 00:26:59,560 --> 00:27:01,280 Speaker 11: all the banks that we cover that seems to have 536 00:27:01,320 --> 00:27:04,880 Speaker 11: studied so it does seem to be uh, this one 537 00:27:04,920 --> 00:27:08,399 Speaker 11: bank where uh, you know, they're trying to figure out 538 00:27:08,520 --> 00:27:11,000 Speaker 11: if there's a path forward or what the path forward 539 00:27:11,400 --> 00:27:14,480 Speaker 11: will be. I think the one remaining question that we 540 00:27:14,520 --> 00:27:17,480 Speaker 11: do have and that could you know, its depending on 541 00:27:17,560 --> 00:27:22,679 Speaker 11: what uh happens with this bank is the Deposit Insurance Fund, 542 00:27:23,000 --> 00:27:27,639 Speaker 11: and you know, if there is some kind of change 543 00:27:27,640 --> 00:27:30,359 Speaker 11: that comes out of that in terms of raising the 544 00:27:30,400 --> 00:27:33,280 Speaker 11: limit on deposits, that's not free that I'll have to 545 00:27:33,280 --> 00:27:36,960 Speaker 11: be paid for the banks in generally the biggest banks 546 00:27:37,040 --> 00:27:39,960 Speaker 11: pay more because it's based on your your share of deposits. 547 00:27:40,000 --> 00:27:43,080 Speaker 11: And so I think that that's going to be the 548 00:27:43,160 --> 00:27:45,560 Speaker 11: question that that that arises coming out of this. 549 00:27:46,160 --> 00:27:49,760 Speaker 2: Kate jay Pal says he agrees with and supports the recommendations. 550 00:27:49,880 --> 00:27:50,879 Speaker 2: Was that foregone? 551 00:27:51,240 --> 00:27:52,720 Speaker 10: Yeah, I think it'd be pretty hard for them to 552 00:27:52,720 --> 00:27:56,120 Speaker 10: put out a report that he wasn't on board with. 553 00:27:56,720 --> 00:27:59,760 Speaker 7: But there was no strife within the FED over this, I. 554 00:27:59,720 --> 00:28:02,080 Speaker 10: Mean currently none that we'd picked up on in over 555 00:28:02,119 --> 00:28:06,359 Speaker 10: the past several weeks. Yeah, are heads likely to roll 556 00:28:06,440 --> 00:28:09,000 Speaker 10: because of this because we see internal changes at the 557 00:28:09,320 --> 00:28:11,560 Speaker 10: You know that that's really the big question. It's unclear 558 00:28:11,640 --> 00:28:15,360 Speaker 10: obviously there that nothing's been announced and or reported on that, 559 00:28:15,440 --> 00:28:17,320 Speaker 10: but there we know there were lawmakers at that hearing 560 00:28:17,359 --> 00:28:19,320 Speaker 10: with Michael Barr who asked him very pointedly, you know, 561 00:28:19,359 --> 00:28:21,400 Speaker 10: who's going to lose their job over this? I thought 562 00:28:21,400 --> 00:28:24,000 Speaker 10: that it was interesting that the report really didn't say much. 563 00:28:24,359 --> 00:28:26,800 Speaker 10: I don't think I mentioned at all by name Mary Daily. Yeah, 564 00:28:27,000 --> 00:28:29,520 Speaker 10: it mentioned the San Francisco FED, but you know, kind 565 00:28:29,520 --> 00:28:32,520 Speaker 10: of it didn't come down as hard as maybe. I 566 00:28:32,560 --> 00:28:35,399 Speaker 10: think surely some lawmakers probably wanted to see and I 567 00:28:35,440 --> 00:28:37,400 Speaker 10: think we'll be hearing from them about that as well, 568 00:28:37,440 --> 00:28:39,000 Speaker 10: because there's been a lot of letters sent to the 569 00:28:39,000 --> 00:28:43,120 Speaker 10: San Francisco FED from from Congress asking for documents and explanation, 570 00:28:43,360 --> 00:28:45,760 Speaker 10: and so I think we'll continue to see more pressure 571 00:28:46,360 --> 00:28:48,640 Speaker 10: that this won't this won't relieve that for sure. 572 00:28:49,000 --> 00:28:51,440 Speaker 2: It's a great question, Allison. That's the That's the question 573 00:28:51,520 --> 00:28:55,200 Speaker 2: most Americans are probably asking, right, is where's the accountability? 574 00:28:55,200 --> 00:28:56,280 Speaker 2: Who's going to get punished for this? 575 00:28:57,880 --> 00:29:00,040 Speaker 11: I mean, I think, you know, obviously that's that's the 576 00:29:00,120 --> 00:29:05,760 Speaker 11: question everyone asks, right, So I guess people might look 577 00:29:05,760 --> 00:29:08,600 Speaker 11: at who, but they also look at what. And obviously 578 00:29:08,680 --> 00:29:12,200 Speaker 11: the regulator's job is to say what can we change 579 00:29:12,240 --> 00:29:14,840 Speaker 11: to make sure that this doesn't happen again. I think 580 00:29:14,880 --> 00:29:19,160 Speaker 11: the other the other measure that's come to attention again 581 00:29:19,200 --> 00:29:21,240 Speaker 11: for the for the very biggest banks that I cover, 582 00:29:21,480 --> 00:29:25,960 Speaker 11: is the liquidity coverage ratio and does that need to 583 00:29:26,000 --> 00:29:30,560 Speaker 11: be tweaked and that's perhaps is not necessarily from the 584 00:29:30,640 --> 00:29:34,520 Speaker 11: US regional bank situation, that's from things that are happening 585 00:29:34,520 --> 00:29:38,640 Speaker 11: globally with with the credits fease. But I think in 586 00:29:38,760 --> 00:29:42,760 Speaker 11: general it's that's another form of regulation that might find 587 00:29:42,760 --> 00:29:47,520 Speaker 11: its way to the smaller banks in it in perhaps 588 00:29:47,560 --> 00:29:51,400 Speaker 11: a tweaked format, and look at changes for for the 589 00:29:51,480 --> 00:29:56,920 Speaker 11: larger banks, because certainly while people will look for you know, 590 00:29:56,960 --> 00:29:58,960 Speaker 11: as you said, there's there's obviously a lot of political 591 00:29:59,000 --> 00:30:05,160 Speaker 11: posturing and what happened, But from the regulator standpoints, you know, 592 00:30:05,200 --> 00:30:09,240 Speaker 11: their job is to is to make sure that there's 593 00:30:09,320 --> 00:30:10,400 Speaker 11: protections in the future. 594 00:30:11,200 --> 00:30:13,240 Speaker 9: Just on the subject of the big banks, Allison and 595 00:30:13,280 --> 00:30:15,800 Speaker 9: you alluded to this earlier, a group of them got 596 00:30:15,840 --> 00:30:19,120 Speaker 9: together to provide thirty billion dollars in a deposit infusion 597 00:30:19,120 --> 00:30:22,320 Speaker 9: to First Republican and an attempt to stabilize it last month. 598 00:30:23,480 --> 00:30:26,000 Speaker 9: Is that enough of an incentive for one of them 599 00:30:26,040 --> 00:30:27,960 Speaker 9: to step in to make sure it doesn't fail, or 600 00:30:28,040 --> 00:30:30,080 Speaker 9: is that thirty billion dollars and really it's just a 601 00:30:30,080 --> 00:30:33,400 Speaker 9: couple billion dollars that each bank put in, not consequential 602 00:30:33,520 --> 00:30:35,000 Speaker 9: enough for them to take that risk. 603 00:30:36,720 --> 00:30:38,960 Speaker 11: I definitely think it's the latter and I think that's 604 00:30:38,960 --> 00:30:43,239 Speaker 11: what you're seeing happening today, and I think that that is, 605 00:30:43,400 --> 00:30:47,040 Speaker 11: you know, that was part of the reason why when 606 00:30:47,120 --> 00:30:50,000 Speaker 11: this action did take place a month or sogo, I 607 00:30:50,000 --> 00:30:52,240 Speaker 11: think I think the big banks were trying to be 608 00:30:52,320 --> 00:30:55,040 Speaker 11: part of the solution of studying things for the broader 609 00:30:55,440 --> 00:30:58,920 Speaker 11: market and trying to give a side of sentiment for 610 00:30:59,000 --> 00:31:01,760 Speaker 11: the for the broader market, but did not want to 611 00:31:02,640 --> 00:31:08,000 Speaker 11: infuse equity into the deal and so chose to take this. 612 00:31:08,200 --> 00:31:10,840 Speaker 11: You know, it's unclear if the government may or may 613 00:31:10,880 --> 00:31:15,120 Speaker 11: not have provided them with summary insurance reassurances or any 614 00:31:15,160 --> 00:31:18,480 Speaker 11: kind of insurance, or what that will look like post 615 00:31:18,520 --> 00:31:24,360 Speaker 11: this deal, but certainly I don't think that the banks 616 00:31:24,400 --> 00:31:26,600 Speaker 11: will want to get involved unless there is some kind 617 00:31:26,640 --> 00:31:27,600 Speaker 11: of government support. 618 00:31:28,160 --> 00:31:30,960 Speaker 2: Allison, thanks for being with us. Bloomberg Intelligence Senior Analyst 619 00:31:31,000 --> 00:31:33,640 Speaker 2: Alison Williams and Bloomberg News Kate Davidson. 620 00:31:33,720 --> 00:31:35,960 Speaker 7: Kate, thanks so much for the reporting and the insights. 621 00:31:37,520 --> 00:31:41,000 Speaker 1: You're listening to the Bloomberg Sound on podcast. Catch us 622 00:31:41,080 --> 00:31:44,240 Speaker 1: live weekdays at one Eastern on Bloomberg dot com, the 623 00:31:44,320 --> 00:31:47,400 Speaker 1: iHeartRadio app and the Bloomberg Business app, or listening on 624 00:31:47,440 --> 00:31:49,440 Speaker 1: demand wherever you get your podcasts. 625 00:31:51,200 --> 00:31:55,160 Speaker 2: Joe Wisenthal, I warned you as coming in here. It's 626 00:31:55,240 --> 00:31:58,040 Speaker 2: like in Jurassic Park when you see the puddle and 627 00:31:58,080 --> 00:32:01,120 Speaker 2: the ripples in the puddle. He made his way to 628 00:32:01,160 --> 00:32:05,480 Speaker 2: the studio here the t Rex of the Bloomberg newsroom. 629 00:32:05,840 --> 00:32:07,760 Speaker 2: Do you follow the presidential racers? 630 00:32:07,800 --> 00:32:09,120 Speaker 7: It boring this early for you. 631 00:32:09,360 --> 00:32:12,080 Speaker 8: I'm aware, what every four years in this country or. 632 00:32:12,040 --> 00:32:14,000 Speaker 7: Something like that, that's what they say, Yeah. 633 00:32:14,400 --> 00:32:19,000 Speaker 8: Every four year. Don't tell me. There's the Democratic Party 634 00:32:19,320 --> 00:32:20,440 Speaker 8: and the Republican Party. 635 00:32:20,680 --> 00:32:22,720 Speaker 2: Everyone knows you're smarter than that. I just wonder if, 636 00:32:22,760 --> 00:32:25,240 Speaker 2: like I, are you done scrolling this yet? Or do 637 00:32:25,280 --> 00:32:26,280 Speaker 2: you give yourself a minute? 638 00:32:26,920 --> 00:32:30,000 Speaker 8: In all seriousness, I actually make like a really big 639 00:32:30,040 --> 00:32:34,600 Speaker 8: effort to avoid at some point early in my career. 640 00:32:34,680 --> 00:32:37,479 Speaker 8: I'm like, I am only a markets, finance and economics reporter. 641 00:32:37,920 --> 00:32:40,680 Speaker 8: I will pay I try to avoid following the news 642 00:32:40,720 --> 00:32:45,200 Speaker 8: of like electoral politics, policy, dead sealing, all that stuff. 643 00:32:45,240 --> 00:32:46,600 Speaker 8: Of course you have to pay attention to. 644 00:32:46,600 --> 00:32:48,600 Speaker 2: This is why all the politicians actually want to talk 645 00:32:48,640 --> 00:32:50,440 Speaker 2: to Joe instead of this job. 646 00:32:50,960 --> 00:32:53,200 Speaker 8: They can fool me. I don't know, I'm not paying 647 00:32:53,200 --> 00:32:56,080 Speaker 8: attention enough for them to Uh, they can. They can 648 00:32:56,120 --> 00:32:56,880 Speaker 8: get one over on me. 649 00:32:57,360 --> 00:32:59,680 Speaker 9: But don't you have to pay attention to politics? And 650 00:32:59,720 --> 00:33:02,760 Speaker 9: Paul additions show when they're going after public companies that 651 00:33:03,640 --> 00:33:04,360 Speaker 9: public markets. 652 00:33:04,560 --> 00:33:07,320 Speaker 8: You know, it's interesting, you know, like Trump did and 653 00:33:07,480 --> 00:33:09,720 Speaker 8: like we thought that was like really interesting, and I what, 654 00:33:10,000 --> 00:33:13,480 Speaker 8: I feel like everyone kind of learned to ignore it 655 00:33:13,600 --> 00:33:16,960 Speaker 8: after a month and that actually there there was very little, 656 00:33:17,160 --> 00:33:19,040 Speaker 8: as they say, bite behind the bark when you would 657 00:33:19,080 --> 00:33:23,720 Speaker 8: call out a specific company. Biden, you know, his uh 658 00:33:23,760 --> 00:33:27,680 Speaker 8: braining at the oil companies to you know, be less greedy, 659 00:33:27,720 --> 00:33:30,920 Speaker 8: et cetera. Does it really do anything? You know, I 660 00:33:30,920 --> 00:33:33,920 Speaker 8: think the spr release did a lot more than the tweets, 661 00:33:33,920 --> 00:33:37,520 Speaker 8: et cetera. You know, but I do, you know, I 662 00:33:38,080 --> 00:33:40,080 Speaker 8: pay attention. I'm more aware. 663 00:33:39,800 --> 00:33:42,120 Speaker 7: Of the world, of course you are. What what is 664 00:33:42,160 --> 00:33:42,680 Speaker 7: this report? 665 00:33:42,960 --> 00:33:43,080 Speaker 5: You know? 666 00:33:43,200 --> 00:33:45,280 Speaker 8: We'll see one more thing though too. It's like people 667 00:33:45,320 --> 00:33:49,200 Speaker 8: are really bad at knowing the relationship between markets and politics. 668 00:33:49,240 --> 00:33:51,160 Speaker 8: And when I say really bad, I mean everyone, Like 669 00:33:51,480 --> 00:33:54,800 Speaker 8: how many economists and other people said, off Trump wins, 670 00:33:55,360 --> 00:33:56,440 Speaker 8: market's going to tank. 671 00:33:57,240 --> 00:33:58,800 Speaker 9: Like a blue wave was going to be bad, and 672 00:33:58,800 --> 00:34:00,040 Speaker 9: then it's going to be bad. 673 00:34:00,120 --> 00:34:02,000 Speaker 8: All these things. And the thing is, it's like it's 674 00:34:02,080 --> 00:34:04,200 Speaker 8: really tough to tell so even if like you gave 675 00:34:04,320 --> 00:34:06,640 Speaker 8: someone in the markets a crystal ball, like you tell 676 00:34:06,680 --> 00:34:10,319 Speaker 8: them who's gonna win in twenty twenty four, what the 677 00:34:10,360 --> 00:34:12,400 Speaker 8: Senate makeup is gonna be, What the House makeup is 678 00:34:12,440 --> 00:34:15,359 Speaker 8: going to be, The idea that they wouldn't know, like, okay, 679 00:34:15,440 --> 00:34:17,400 Speaker 8: well this is the trade to put on is like 680 00:34:17,600 --> 00:34:18,879 Speaker 8: highly dubious in my view. 681 00:34:19,560 --> 00:34:22,719 Speaker 2: Looks like they've given up on banking, at least on 682 00:34:22,800 --> 00:34:24,959 Speaker 2: Capitol Hill, like the Fed you saw this report today. 683 00:34:24,960 --> 00:34:27,160 Speaker 2: I'm sure Yeah has its own ideas on this, but 684 00:34:27,200 --> 00:34:28,880 Speaker 2: the politicians are they're going home. 685 00:34:29,719 --> 00:34:30,120 Speaker 1: Yeah. 686 00:34:30,200 --> 00:34:33,480 Speaker 8: I mean, like I guess, I'm like pretty pessimistic for 687 00:34:34,120 --> 00:34:37,640 Speaker 8: any time we have so called divided government where you 688 00:34:37,680 --> 00:34:40,400 Speaker 8: have one party in the White House and without control 689 00:34:40,480 --> 00:34:44,320 Speaker 8: of both houses of Congress, like anything substantive being passed. 690 00:34:44,400 --> 00:34:48,560 Speaker 8: I mean it's right, I mean, it's pretty rare these days. 691 00:34:48,800 --> 00:34:51,120 Speaker 8: I mean, we barely it's not even clear whether we'll 692 00:34:51,120 --> 00:34:53,520 Speaker 8: get like a dead ceiling hike in the next few months, 693 00:34:53,760 --> 00:34:56,080 Speaker 8: let alone like a re architectic of the banking system 694 00:34:56,239 --> 00:34:59,600 Speaker 8: and on banking in particular. I do feel like this 695 00:34:59,680 --> 00:35:01,560 Speaker 8: is not the type of thing that's going to be 696 00:35:02,360 --> 00:35:04,960 Speaker 8: some sort of technocratic fix because the question of like, 697 00:35:05,120 --> 00:35:08,920 Speaker 8: you know, the history of America, it's like decentralized banking 698 00:35:08,960 --> 00:35:09,960 Speaker 8: and small banks. 699 00:35:09,760 --> 00:35:10,080 Speaker 7: Et cetera. 700 00:35:10,160 --> 00:35:12,640 Speaker 8: I think it's like the power of community banks, et cetera. 701 00:35:12,760 --> 00:35:16,520 Speaker 8: Like these are pretty like deeply contested ideas, and so 702 00:35:16,520 --> 00:35:18,160 Speaker 8: I don't think anyone's going to be happy, like, oh, 703 00:35:18,239 --> 00:35:20,640 Speaker 8: let's make this tweak. It's going to be a real fight. 704 00:35:21,880 --> 00:35:24,160 Speaker 9: Well, and I'm looking at one bank in particular today, 705 00:35:24,239 --> 00:35:27,919 Speaker 9: Joe First Republic. The chart is so terrible it's hard 706 00:35:27,920 --> 00:35:30,439 Speaker 9: to look at, to be honest. On the day, down 707 00:35:30,560 --> 00:35:33,200 Speaker 9: thirty eight percent, which brings us to three dollars and 708 00:35:33,239 --> 00:35:34,600 Speaker 9: seventy eight anyone. 709 00:35:34,280 --> 00:35:35,960 Speaker 7: Wrote that all the way down from the start of 710 00:35:35,960 --> 00:35:36,239 Speaker 7: the year. 711 00:35:36,719 --> 00:35:38,400 Speaker 9: I mean, geez, I mean, what do you think, how 712 00:35:38,400 --> 00:35:39,880 Speaker 9: do you think this goes to? No one has a 713 00:35:39,920 --> 00:35:40,399 Speaker 9: crystal ball? 714 00:35:40,480 --> 00:35:40,880 Speaker 7: No one has a. 715 00:35:40,880 --> 00:35:43,040 Speaker 8: Crystal ball, But look at the rest of the indices 716 00:35:43,080 --> 00:35:45,239 Speaker 8: do not care? And I think to my mind, like, 717 00:35:45,320 --> 00:35:48,240 Speaker 8: I mean, I've had as you know, I sit in 718 00:35:47,600 --> 00:35:50,600 Speaker 8: the Bloomberg newsroom and I hear our colleague who does 719 00:35:50,600 --> 00:35:53,560 Speaker 8: the squawk and keep announcing every halt over the last 720 00:35:53,640 --> 00:35:55,799 Speaker 8: three days as the stock and every time I'm like, oh, 721 00:35:55,840 --> 00:35:58,120 Speaker 8: people are still someone's still buying this, Like there's still 722 00:35:58,120 --> 00:35:59,800 Speaker 8: a bid. People have been hitting the bid all the 723 00:35:59,840 --> 00:36:02,560 Speaker 8: way down, which kind of blows my mind. But more importantly, 724 00:36:03,239 --> 00:36:05,160 Speaker 8: you look at the market s and P five one 725 00:36:05,200 --> 00:36:07,640 Speaker 8: hundred and half a percent after yes yesterday was a 726 00:36:07,719 --> 00:36:11,000 Speaker 8: huge surge. NASDAC up again today, and so it's pretty 727 00:36:11,000 --> 00:36:15,040 Speaker 8: clear that to the extent that you know there's serious 728 00:36:15,080 --> 00:36:17,759 Speaker 8: issues with this bank, it doesn't look like there's anyone 729 00:36:17,880 --> 00:36:20,600 Speaker 8: out there who's really concerned that this is like something systemic. 730 00:36:20,719 --> 00:36:22,880 Speaker 8: And I think that's pretty healthy. Like we want a 731 00:36:22,960 --> 00:36:25,080 Speaker 8: world in which a bank can be a regular business 732 00:36:25,120 --> 00:36:26,839 Speaker 8: and go out of business, right, we want a world 733 00:36:26,880 --> 00:36:29,799 Speaker 8: in which banks can fail just the same way like 734 00:36:30,480 --> 00:36:33,120 Speaker 8: a laundromat could fail, right, Like that would be great, 735 00:36:33,160 --> 00:36:34,880 Speaker 8: And maybe the market is sort of looking at some 736 00:36:34,920 --> 00:36:37,440 Speaker 8: of these bank failures and seeing the tools that the 737 00:36:37,480 --> 00:36:40,040 Speaker 8: FED has available and seeing that ascratic it's like, yeah, 738 00:36:40,040 --> 00:36:42,680 Speaker 8: companies go out of business, and again you know, there 739 00:36:42,760 --> 00:36:45,120 Speaker 8: is still a trade for a First Republic. They haven't 740 00:36:45,120 --> 00:36:47,080 Speaker 8: gone out of business, but it's clear that there is 741 00:36:47,200 --> 00:36:50,719 Speaker 8: concerns about the company's the banks viability, and it's clear 742 00:36:50,760 --> 00:36:52,799 Speaker 8: that no one else beside, shareholders, aren't that. 743 00:36:52,800 --> 00:36:53,279 Speaker 7: Worried about it? 744 00:36:53,360 --> 00:36:53,640 Speaker 5: Right now? 745 00:36:53,880 --> 00:36:57,240 Speaker 2: Imagine Kelley the Odd Lots on the laundromat bailout. 746 00:36:58,800 --> 00:37:01,200 Speaker 7: That's it's already already in an austing classic. 747 00:37:01,320 --> 00:37:04,440 Speaker 2: Yeah, for sure, let's make more time for next time. Joe, 748 00:37:04,480 --> 00:37:06,239 Speaker 2: it's great to have you. You're you're the best, and 749 00:37:06,640 --> 00:37:07,640 Speaker 2: to go back. 750 00:37:07,440 --> 00:37:10,000 Speaker 8: To always always a pleasure. 751 00:37:09,719 --> 00:37:12,080 Speaker 2: The host of Bloomberg's Odd Lots podcast with us straight 752 00:37:12,080 --> 00:37:18,160 Speaker 2: from World Headquarters. Thanks for listening to the sound On podcast. 753 00:37:18,200 --> 00:37:21,320 Speaker 2: Make sure to subscribe if you haven't already, at Apple, Spotify, 754 00:37:21,400 --> 00:37:23,839 Speaker 2: and anywhere else you get your podcasts, and you can 755 00:37:23,840 --> 00:37:26,680 Speaker 2: find us live every weekday from Washington, d C. At 756 00:37:26,680 --> 00:37:30,640 Speaker 2: one pm Eastern Time at Bloomberg dot com