MORNING, THIS AFTERNOON, RATHER,
AT 12:00 NOON.
AT 12:00 NOON.
MY NEXT GUEST IS OUT WITH A NEW
MY NEXT GUEST IS OUT WITH A NEW
PIECE IN THE FINANCIAL TIMES, AN
PIECE IN THE FINANCIAL TIMES, AN
OP ED PIECE ON WHAT ACTIONS
OP ED PIECE ON WHAT ACTIONS
CENTRAL BANKS SHOULD TAKE.
CENTRAL BANKS SHOULD TAKE.
SHE WRITES THE U.S. FEDERAL
SHE WRITES THE U.S. FEDERAL
RESERVE AND OTHER CENTRAL BANKS
RESERVE AND OTHER CENTRAL BANKS
SHOULD TAKE COORDINATED ACTION
SHOULD TAKE COORDINATED ACTION
TO REQUIRE IMPORTANT BANKS TO
TO REQUIRE IMPORTANT BANKS TO
BUILD CAPITAL BUFFERS BY
BUILD CAPITAL BUFFERS BY
RETAINING EARNINGS.
RETAINING EARNINGS.
THIS MEANS THAT SUCH BANKS WOULD
THIS MEANS THAT SUCH BANKS WOULD
SUSPEND ALL CAPITAL
SUSPEND ALL CAPITAL
DISTRIBUTIONS INCLUDING
DISTRIBUTIONS INCLUDING
DISCRETIONARY BONUSES TO TOP
DISCRETIONARY BONUSES TO TOP
EXECUTIVES UNTIL THE GLOBAL
EXECUTIVES UNTIL THE GLOBAL
ECONOMY STARTS TO RECOVER.
ECONOMY STARTS TO RECOVER.
JOINING ME RIGHT NOW IS ALLIANCE
JOINING ME RIGHT NOW IS ALLIANCE
FOUNDING DIRECTOR AND FORMER
FOUNDING DIRECTOR AND FORMER
FDIC CHAIRMAN, SHEILA BEHR.
FDIC CHAIRMAN, SHEILA BEHR.
THANK YOU FOR BEING HERE TODAY.
THANK YOU FOR BEING HERE TODAY.
>> NICE BEING HERE, THANKS,
>> NICE BEING HERE, THANKS,
MARIA.
MARIA.
MARIA:  SO YOU WANT TO SEE
MARIA:  SO YOU WANT TO SEE
COORDINATED ACTIONS FROM CENTRAL
COORDINATED ACTIONS FROM CENTRAL
BANKS, MORE SO THAN YOU’RE
BANKS, MORE SO THAN YOU’RE
TALKING ABOUT STIMULUS OUT OF
TALKING ABOUT STIMULUS OUT OF
THE FISCAL PART OF THINGS OR ARE
THE FISCAL PART OF THINGS OR ARE
YOU SAYING YOU WANT BOTH?
YOU SAYING YOU WANT BOTH?
>> WELL, I THINK WE NEED ALL OF
>> WELL, I THINK WE NEED ALL OF
THE ABOVE.
THE ABOVE.
THAT WAS SPECIFICALLY TARGETED
THAT WAS SPECIFICALLY TARGETED
AT THE BANKING SYSTEM AND MAKING
AT THE BANKING SYSTEM AND MAKING
SURE THE BANKING SYSTEM REMAINS
SURE THE BANKING SYSTEM REMAINS
SOLVENT DURING THIS CRISIS.
SOLVENT DURING THIS CRISIS.
SO YES, THEY NEED TO PRESERVE
SO YES, THEY NEED TO PRESERVE
THEIR CASH AND THEIR CAPITAL.
THEIR CASH AND THEIR CAPITAL.
THERE’S NO REASON WHY THEY NEED
THERE’S NO REASON WHY THEY NEED
TO BE DISTRIBUTING EARNINGS TO
TO BE DISTRIBUTING EARNINGS TO
SHAREHOLDERS OR EXECUTIVES RIGHT
SHAREHOLDERS OR EXECUTIVES RIGHT
NOW.
NOW.
THEY NEED TO CONSERVE THOSE
THEY NEED TO CONSERVE THOSE
RESOURCES SO THEY CAN KEEP
RESOURCES SO THEY CAN KEEP
LENDING INTO THE REAL ECONOMY.
LENDING INTO THE REAL ECONOMY.
THAT WILL COMPLEMENT A LOT OF
THAT WILL COMPLEMENT A LOT OF
THE EFFORTS THAT ARE GOING ON IN
THE EFFORTS THAT ARE GOING ON IN
THE STIMULUS BILL TO PROVIDE
THE STIMULUS BILL TO PROVIDE
BACKSTOP AGAINST LOAN LOSSES.
BACKSTOP AGAINST LOAN LOSSES.
THE BANKS NEED TO GET OUT THERE
THE BANKS NEED TO GET OUT THERE
AND LEND INCLUDING TO SMALL
AND LEND INCLUDING TO SMALL
BUSINESSES AND COMPANIES IN
BUSINESSES AND COMPANIES IN
THESE DISTRESSED SECTORS RIGHT
THESE DISTRESSED SECTORS RIGHT
NOW.
NOW.
THEY NEED CAPITAL TO DO THAT.
THEY NEED CAPITAL TO DO THAT.
THAT’S WHY THEY SHOULD BE
THAT’S WHY THEY SHOULD BE
RETAINING THE CAPITAL.
RETAINING THE CAPITAL.
MARIA:  YOU DON’T NECESSARILY
MARIA:  YOU DON’T NECESSARILY
NEED TO SEE THE CENTRAL BANKSES
NEED TO SEE THE CENTRAL BANKSES
DO ANYTHING ON INTEREST RATES OR
DO ANYTHING ON INTEREST RATES OR
THEIR OWN BALANCE SHEETS, YOU
THEIR OWN BALANCE SHEETS, YOU
WANT TIGHTER REGULATIONS ON THE
WANT TIGHTER REGULATIONS ON THE
BANKS SO THEY CAN RAISE MORE
BANKS SO THEY CAN RAISE MORE
CAPITAL AND BE READY TO LEND IN
CAPITAL AND BE READY TO LEND IN
AN AGGRESSIVE MANNER.
AN AGGRESSIVE MANNER.
>>  NO, I’VE SUPPORTED THE FED’S
>>  NO, I’VE SUPPORTED THE FED’S
LIQUIDITY MEASURES.
LIQUIDITY MEASURES.
THEY WERE PRUDENT TO DO THAT.
THEY WERE PRUDENT TO DO THAT.
LIQUIDITY IS CAPITAL.
LIQUIDITY IS CAPITAL.
SO THE LIQUIDITY WHICH IS THE
SO THE LIQUIDITY WHICH IS THE
AMOUNT OF CASH YOU HAVE ON-HAND
AMOUNT OF CASH YOU HAVE ON-HAND
HAS BEEN PUMPED INTO THE BANKING
HAS BEEN PUMPED INTO THE BANKING
SYSTEM BY THE CENTRAL BANK.
SYSTEM BY THE CENTRAL BANK.
I SUPPORT THAT.
I SUPPORT THAT.
THAT’S A GOOD THING.
THAT’S A GOOD THING.
THAT WAS THE FIRST PARAGRAPH OF
THAT WAS THE FIRST PARAGRAPH OF
THE OP ED.
THE OP ED.
THE LIQUIDITY ISN’T ENOUGH.
THE LIQUIDITY ISN’T ENOUGH.
YOU NEED TO KEEP SOLVENT TOO.
YOU NEED TO KEEP SOLVENT TOO.
THEY NEED CAPITAL SO THEY CAN
THEY NEED CAPITAL SO THEY CAN
ABSORB THE LOSSES THAT ARE GOING
ABSORB THE LOSSES THAT ARE GOING
TO COME FROM THE TERRIBLE CRISIS
TO COME FROM THE TERRIBLE CRISIS
AND WE WANT THEM TO KEEP LENDING
AND WE WANT THEM TO KEEP LENDING
SO THERE’S TWO PRONGS OF ACTION
SO THERE’S TWO PRONGS OF ACTION
THAT I THINK CENTRAL BANKS
THAT I THINK CENTRAL BANKS
SHOULD BE TAKING.
SHOULD BE TAKING.
MARIA:  LAST NIGHT WE HEARD FROM
MARIA:  LAST NIGHT WE HEARD FROM
MINNEAPOLIS FEDERAL RESERVE
MINNEAPOLIS FEDERAL RESERVE
PRESIDENT NEIL KASHKERI TALKING
THE U.S. ECONOMY AND MOST
IMPORTANTLY TO THE AMERICAN
IMPORTANTLY TO THE AMERICAN
PEOPLE.
PEOPLE.
MARIA:  SHEILA, WHAT’S YOUR TAKE
MARIA:  SHEILA, WHAT’S YOUR TAKE
ON THAT?
ON THAT?
DO YOU THINK THAT WE ARE
DO YOU THINK THAT WE ARE
APPROACHING A BOTTOM IN TERMS OF
APPROACHING A BOTTOM IN TERMS OF
ECONOMIC GROWTH?
ECONOMIC GROWTH?
WHERE DO YOU SEE THE RECESSION
WHERE DO YOU SEE THE RECESSION
AND HOW STEEP DO YOU SEE IT
AND HOW STEEP DO YOU SEE IT
COMING?
COMING?
>> YEAH, I DON’T THINK WE KNOW
>> YEAH, I DON’T THINK WE KNOW
YET.
YET.
I THINK IT COULD BE A LOT MORE
I THINK IT COULD BE A LOT MORE
SEVERE THAN 2008 AND COULD
SEVERE THAN 2008 AND COULD
PARALLEL WHAT WE SAW WITH THE
PARALLEL WHAT WE SAW WITH THE
GREAT DEPRESSION.
GREAT DEPRESSION.
A LOT OF IT DEPENDS ON THE
A LOT OF IT DEPENDS ON THE
ACTIONS THAT CONGRESS TAGS RIGHT
ACTIONS THAT CONGRESS TAGS RIGHT
NOW.
NOW.
I WANT TO EMPHASIZE, THAT’S A
I WANT TO EMPHASIZE, THAT’S A
MUSCULAR FISCAL STIMULUS AS
MUSCULAR FISCAL STIMULUS AS
WELL.
WELL.
I HOPE THEY CAN WORK THE
I HOPE THEY CAN WORK THE
STIMULUS OUT TODAY.
STIMULUS OUT TODAY.
MAYBE THEY NEED MORE CONTROL OUT
MAYBE THEY NEED MORE CONTROL OUT
OF THE MASSIVE AMOUNTS OF MONEY
OF THE MASSIVE AMOUNTS OF MONEY
THEY’RE GOING TO PUMP INTO THE
THEY’RE GOING TO PUMP INTO THE
SYSTEM.
SYSTEM.
WE NEED TO GET THAT MONEY OUT
WE NEED TO GET THAT MONEY OUT
THE DOOR, ESPECIALLY TO
THE DOOR, ESPECIALLY TO
INDIVIDUALS WHO ARE LOSING THEIR
INDIVIDUALS WHO ARE LOSING THEIR
JOBS, HARD-HIT SECTORS THAT ARE
JOBS, HARD-HIT SECTORS THAT ARE
FORCING LAYOFFS AND SMALL
FORCING LAYOFFS AND SMALL
BUSINESSES IN PARTICULAR.
BUSINESSES IN PARTICULAR.
THE BILL IS DESIGNED TO ADDRESS
THE BILL IS DESIGNED TO ADDRESS
ALL OF THESE.
ALL OF THESE.
I HOPE THEY CAN GET A COMPROMISE
I HOPE THEY CAN GET A COMPROMISE
TODAY AND GET THAT MONEY OUT THE
TODAY AND GET THAT MONEY OUT THE
DOOR BECAUSE THE ECONOMY IS
DOOR BECAUSE THE ECONOMY IS
DESPERATELY IN NEED OF IT AND IT
DESPERATELY IN NEED OF IT AND IT
CAN’T BE TOMORROW, NEXT WEEK, IT
CAN’T BE TOMORROW, NEXT WEEK, IT
NEEDS TO BE NOW.
NEEDS TO BE NOW.
MARIA:  THAT’S RIGHT.
MARIA:  THAT’S RIGHT.
SHEILA, THANKS VERY MUCH FOR
