On this week's "Political Capital with Al Hunt," airing tomorrow night at 9:00PM/ET, Bloomberg Television anchor and Bloomberg View columnist Al Hunt interviews Sen. Elizabeth Warren. Sen. Elizabeth Warren tells Al Hunt that the verdict is still out on Stanley Fischer, "I want to [like him as vice chair] - I want to be hopeful that Fischer's going to work in the right direction. I am not sure."
When asked whether Jamie Dimon has the understanding that there were problems in the past and that JPMorgan Chase & Co. (NYSE:JPM) needs to have a different plan going forward, the Massachusetts Senator replied: "I'm waiting for him to demonstrate that understanding… And he's had a long, long time."
Elizabeth Warren also gave outgoing Fed chairman, Ben Bernanke a "mixed grade for me... "
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Elizabeth Warren on what she could do now to reduce the concentration of assets the big banks control:
"So I think what we do partly is you have to keep up the pressure from the outside. You have to keep talking about it. We have to keep reminding people that, back in 2008, when the big crash came, that our leaders stood up and said, remember, they stood up and said, "We have got to bail these banks out because there's too much concentration in the banking industry, they're too big, we cannot let them fail." And where are we today? They are bigger than they were then."
Elizabeth Warren on whether the taxpayers will have to pay if another big bank fails:
You know, the - the government keeps saying, no, no, no, we've now got the - the Dodd-Frank rules in place, you know, we're starting to work on these, we've got Volcker that we're starting to put in place. And, look, I want to be clear, those are very much steps in the right direction. But yesterday we had a hearing, subcommittee hearing in Banking, and we had four economists in there. And I put the question to all four of them: Is the too-big-to-fail problem solved? And, you know, I got yes - I got yes/no answers, and the answer was no, no, no, no, it is not solved. Dodd-Frank, if it were fully and vigorously enforced, would that solve the too-big-to-fail problem by itself? And the answers from all four economists were no, no, no, no. We have to take that seriously.
Elizabeth Warren on what Janet Yellen will do as far as big bank regulations once she becomes Fed chair:
"Well, you know, one of the tools at her disposal is working on capital reserve requirements and a second part very much related to this is the bigger the bank and the more risk that it poses for the system, the way of imposing higher costs on those largest financial institutions - you know, this is where they talk about the systemically significant institutions. So the Fed, both independently and through its leadership of all the bank regulators, has the capacity to put more balancing constraints on the largest financial institutions. When I say balancing, balancing the kind of risk that they impose on the economy….Yellen is making commitments in the direction of saying she understands the problem, she sees the problem, she knows what the tools are. I'm hopeful that means she's going to act."
Elizabeth Warren on whether she is more hopeful and optimistic with Yellen as the Fed Chair:
"I'm more hopeful… you have to have some optimism around this. And I'll tell you why, partly. Janet Yellen is data-driven. Look at the numbers. The big banks are getting bigger, and they're taking on more and more risk. Our banking industry is becoming less and less diversified with every single day. We're losing the smaller financial institutions. There's pressure - the regionals are being lost. We're ending up with these behemoths that absolutely radiate risk."
Elizabeth Warren on whether she is hopeful or optimistic that the Fed will become more transparent:
"Well, you know, one piece on transparency is just introduced a bill recently with Senator Coburn… but it's the reminder, you find the things you can agree on. And Senator Coburn has been out there for a decade fighting for more government transparency. I believe in more transparency. The particular issue that we focused on in this bill are these settlements. When Federal Reserve and others, banking regulators, anywhere else in the government, makes a settlement with a corporate wrongdoer, if they think that's such a great deal for the U.S. taxpayer, then we think they ought to be forced to make those settlements public. And when I say public, I mean put them out there on a website… All the details. All the details so the public can evaluate, was that really a good deal or not?"
Elizabeth Warren on whether JP Morgan is a rogue bank:
"Well, look, you have to remember, I come out of a background of bankruptcy. And what bankruptcy's about is it's partly about families that have hit hard times, but it's also about corporations, big corporations, and what happens when they hit a really hard spell. And when they get reorganized, when new money comes into those financial institutions, there are a lot of conditions that are usually put on that. And among the conditions are that there has to be a new business plan here of showing that the financial institution is not going to keep up its old ways. And that often means that the CEO is replaced in those financial institutions."
Elizabeth Warren on whether Jamie Dimon should be replaced:
"Look, the real question is, do you have somebody who has shown they understand there were problems in the past and that they have a different plan going forward? What JPMorgan Chase and the other large financial institutions have done is they have continued to get bigger and bigger and load up more and more on risk."
Elizabeth Warren on whether Jamie Dimon has that understanding:
"I'm waiting for him to demonstrate that understanding… And he's had a long, long time."
Elizabeth Warren on whether Stanley Fischer is a good choice for vice chairman of the Federal Reserve:
"I'm - again, I want to be hopeful… This is a hard time right now for the Federal Reserve. This economy has not recovered the way it should coming out of this recession. And what we're seeing is the Federal Reserve has very limited tools. And in a world in which Congress is willing to act, a world in which Congress is not cutting back on spending using the sequester to cut back, shutting down the government, costing the economy $24 billion, Congress is supposed to do its part, the Fed does its part. Right now, the Fed just has very limited tools with monetary policy. And it keeps playing kind of the - working with the one tool that it's got."
Elizabeth Warren on whether she likes Stanley Fischer:
"I want to - I want to be hopeful that Fischer's going to work in the right direction. I am not sure."
Elizabeth Warren on what grade she gives Ben Bernanke:
"It's a mixed grade for me. Ben Bernanke did a lot immediately after the crisis to try to stabilize the markets, but he kept the focus on the largest financial institutions and much less on what was happening at the family level. But, again, I want to be fair. The Fed's role - the Fed has limited tools and a limited role - in coming - dealing with that crisis then over time, the Fed had a real responsibility on regulation and under Dodd-Frank. It has missed its deadlines massively. The rules it has written have been complex and difficult to follow. And so it's a very uneven - there have been places where Bernanke has done a good job. Regulation has obviously not been a place where he has - he has concentrated and done what the Fed needed to do to help bring under control the too-big-to-fail banks."
On whether there is going to be a new day with Janet Yellen:
"I want to be hopeful."