Yellen Probably Most-Qualified Ever for Fed: Altman

REPLAY VIDEO
Your next video will start in
Pause

Recommended Videos

  • Info

  • Comments

  • VIDEO TEXT

Nov. 14 (Bloomberg) -- Roger Altman, founder & executive chairman at Evercore, talks with Betty Liu about his expectations of a Federal Reserve under Janet Yellen as she faces as confirmation hearing before the Senate Banking Committee today. He speaks on Bloomberg Television’s “In The Loop.”

Interview.

Thank you for joining us this morning.

I know you read through her statement as well.

People interpreted that to believe she will continue the bond buying program.

Perhaps she is more on the dovish side than some had expected.

I think she was consistent with one dish -- with what one should expect inconsistent with ben bernanke's approach.

She is taking a strong pro- growth stance and stressing the real solution to a leak economy and weak labor markets, especially week labor markets, especially the dual mandate is growth.

And that there is no other solution.

It implies the fed will be very aggressive and will continue to be aggressive on monetary policy.

We do not know when tapering will begin, surely it will begin over the short to medium turn -- term but likely to signal that short rates will remain as low as possible for quite a long time.

That she will keep the stability in the market so to speak.

You and i have spoken many times up until this moment and we talked about the candidates who were vying for the job.

You were more favorable towards larry summers.

You knew him better, know him better.

How do you feel about janet yellen?

It was a choice between babe ruth and lou gehrig.

Janet yellen, if you step back and look at her, if you look at the biography, she is the most qualified person on paper to ever step into the job.

I think the nation will be very well served by her.

The confirmation hearings will be smooth.

No issues whatsoever on the confirmation.

Nor should there be.

You favored summers because you thought he had been through financial crises in the past, right?

The point of view i happen to have is if you look at the modern history of financial crises, what strikes you is how many there have and.

Number two, the increasing frequency for which they occur.

This is a function i think of the velocity of capital flows around the world and deregulation.

This is a matter of time, and probably not that much time historically speaking before we have another one.

We need a fed chairman who is battle hardened in that respect.

This was a choice.

You feel confident she would be able to handle another crisis?

She spent a lot of time at the federal reserve.

She has seen her fair share as well.

Speaking of financial crises, a nobel laureate has sounded off on too big to fail in what he believes will be another crisis brought upon by a failure of the bank.

I want you to listen to this comment.

Anyone looking at the financial or are asked to say the problem of too big to fail is probably worse, not better.

It is worse because we have increased concentration in the banking system.

I know we passed laws that said we would never do the kinds of things we did in 2008. when there is a crisis with banks that are too big to fail and have things that are even bigger than they were before, politicians will blink, no matter what the law is, and we will bail them out.

He thinks they are even worse.

Would you agree?

I think one of the interesting things one might look for today is what she suggests or hints in terms of the approach to the regulatory side of the job.

Remember, there are two main parts to the job of fed chairman.

Obviously monetary policy as we normally think of it and then it is regulation and supervision.

Obviously in the event we now look back on and just leading up to that, that was not the fed's finest hour on that side of it.

The fed has made strenuous efforts and admirable efforts to repair it self thomas so to speak.

What will she hands on the approach he will take to bank regulation and the surrounding issue?

We do not know.

On the issue of too big to fail, there are two levels to it.

At one level, the regulators have done a very good job in improving the capital ratios of liquidity and overall financial strength of the banking system of large institutions.

Those institutions are much less likely to get to the edge to be threatened with failure.

At another level, it is true, that if one of them ever did get to the edge, the country would have no choice but to rescue them.

He is right, the largest institutions, jpmorgan, bank of america and j.p. morgan and wells fargo are a lot larger.

There is no doubt in your mind they would be bailed out if one of them got to the brink?

Yes, but the point is they have been moved well over to the solid side of the ledger through much tighter regulation.

That process is not over.

Regulators have done a very good job strengthening the banking system, capital point of view and safety point of view.

Have we done away with too big to fail?

No, we have not.

I think it has gotten better because the risk of being faced with rescue or not is way below what it has been in a long time.

I want to switch gears to this whole debacle over obamacare.

Are you frustrated, are you upset with how the white house and democrats, how white house has handled this?

I think it is pretty hard to sugarcoat this.

This rollout has been somewhere between bad and abysmal.

It is really quite a sad thing.

It is very early.

What really counts is whether we can ultimately enroll the numbers and composition of the group of enrollees that the system needs to work.

I still think that will happen.

Even how badly bungled it has been?

Yes, because it has been early still.

We are seeing the idea of a legislative fix, which would have the effect of softening the rollout and getting to the issue of letting people keep what they have, the very contentious question of whether the promise was unfulfilled that the president made.

Do you think the president made a mistake in speaking so forcefully about how americans would get to keep their insurance?

I do think the white house made a mistake on this.

I think they could have been a little less if you like what you have, you can keep it.

I think that the claritin this -- declaritiveness was a mistake.

Great to have you with us this morning on this historic

This text has been automatically generated. It may not be 100% accurate.

Advertisement

BTV Channel Finder

Channel_finder_loader

ZIP is required for U.S. locations

Bloomberg Television in   change