Jack Reed

I want to welcome Governor Tarullo also. I want to thank you for holding this hearing at the suggestion of Senator Corker.

Too big to fail is the first chapter, but the second chapter is too interconnected to fail.

I think it is important for us to foster within the government but also outside of the government the ability of multiple agents to make a judgment on this.

I personally think it is an affirmative good.

On February 4, 2010 Sen. Jack Reed introduced S. 3005, 'The National Institute of Finance Act of 2010.'

The 'too big to fail' is a form of implicit subsidy from the taxpayer, which lowers the cost of funding for these derivative transactions.

The taxpayer had to step in because there wasn't enough capital in the private sector to cover the risks

I think that is the goal of many people on this Committee, maybe not everybody, but I think many people.

I do not think many people at all have been held accountable for what is going on.

We allowed fundamental regulatory arbitrage to lead to a very difficult situation

I think that, again, the traditional roles that said a bank in a bank holding company has access to the discount window, that is where we should get back to.

I don't think they would be difficult to implement and I don't think it would be a regulatory issue. I think it would be a management issue.

First, we can't assume regulatory capacity adequate to the complexity of the financial markets.

My honest belief, having experienced it and having lived with it for years, is that the system would be stronger if we could provide for some separation.

I believe that the nature, the human makeup of an institution is extremely important.

The entire structure a 'doom loop' because it is a repeated cycle of boom, bust, bailout.

I think that over the years, I probably have thought more about interconnectedness and the plumbing of the financial system, as I like to call it, than most everybody.

We sort of ganged together, papered it over, and went on having learned nothing

You certainly need regulation. You need the right regulation. And you need a strong regulatory structure, but it is not in itself, I believe, sufficient.

I mean, this has been described variously as the Fed put, which is basically we can go out, take some risk, and then we go to the--there is some way to put the risk off onto the Fed, which ultimately is the taxpayer.

I cannot get a loan. I have got good credit.

My sense is that the essence of your proposal is not simply to prevent proprietary trading but, more importantly, to get them to start acting like banks again.

I grew up the where the rule was KISS, Keep it simple, stupid.

They have just cut my line of credit in half and raised the interest rates by 10 or 12 percent.

We do not want to subsidize the risk. We do not want the bailout.