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Good morning.
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Well, this is what a modern bank run looks like.
Let me tell you what companies in my district are saying. They're saying that payroll companies are telling them, move your deposits out of First Republic. You're not going to be able to have access to the accounts.
That's why I think it is so important that we guarantee all bank depositors. I had said this last time I was on. There's $8 trillion, Margaret, is uninsured deposits in these banks; $10 trillion is insured.
Until we guarantee them and we can charge a fee, we run the risk that there...
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Well, the Congress, yes, Congress. I have been working with Senator Rubio on this, on a proposal to say, look, pay a fee, and have some guarantee on these deposits, because, otherwise, what's going to happen?
Regional banks, they're going to be insecure. People are going to be concerned. And they're going to start to consolidate into the top banks. And you have a lot of these payroll companies telling these companies to move to this -- the bank.
So, I believe the FDIC is doing fine and well now, but we have got to prevent this from happening again. And the best way to do it is to guarantee these deposits.
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No, I think that the FDIC needs to look at the lowest-cost alternative. That's their mandate.
And, right now, they may need to work with banks and private capital to save First Republic. I mean, that is the state we're in. But we can move quickly. Look, in the CARES Act, we actually said that all deposits were guaranteed for transaction accounts.
I think, if we do something like that quickly, we prevent this going again. We also need reform. I mean, look at what has happened, Margaret. Every time the economy heats up, we somehow say, deregulate, deregulate, and it never works out.
In 2018, the deregulation basically sent a signal to the Fed to stop the oversight on these banks.
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Yes.
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He had.
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I did not know at the time, but I do think now that that should not be allowed.
I mean, no, I didn't have a sense back then that Silicon Valley Bank was going to have a challenge. Obviously, there was mismanagement. One reform we should have is that bank executives should not be on the board of the Fed, regional Fed that's overseeing them. And I think that's a lesson.
I also think there needs to be a clawback of his bonus. There needs to be a clawback of executive compensation and for tougher rules on bank executives who have failed banks.
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Well, there should be momentum for three things, one, the clawbacks on these executives. That could be bipartisan.
Two, for greater oversight and the rules on these banks. I mean, we're -- we basically told these banks not to regulate. But the big place -- and I'm working on a bipartisan basis -- protect the regional banks. That's going to help regional community banks the most and mainstream America. That's the biggest risk to the economy.
Look, you have -- Margaret, you have 5 percent interest rate. People are moving out into money market funds. They're moving out of banks. If we don't have a guarantee, we run a real risk across this country.
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Well, it was both.
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When Congress passed deregulation, there's not a straight line between that and what happened, but it certainly sends a signal to the Fed that maybe the Congress doesn't care as much.
And I think there was lax oversight. Look, they noticed that there was risk there. But they didn't do the right liquidity or stress test. I mean, they didn't do a test to see what happens in a high-inflation environment, when Chair Powell has been saying for over a year he's going to raise rates. So...
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I don't think you can blame Chair Powell. I have disagreed, but I don't think you can blame him for this.
I do think we need to know, what are the concrete reforms? Let's stop having bank executives on these boards. Let's make sure that you have better liquidity tests and stress tests. Let's have the regulations we repealed in 2018 back there and have some statement on guaranteeing the bank deposits, so I don't have to come here every...
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... every few weeks.
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Well, here's what's sustainable.
They -- the Republicans should do what I did under Donald Trump, and that's pay your bills. It's patriotic to pay your bills. Look, if you're a family, you have credit card debt.
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Well, I think we should pay the bills and then negotiate. And we should negotiate on deficit reduction.
The last person to leave a surplus was Bill Clinton. I will tell you how we lower the debt. Let's repeal the Trump tax cuts. Let's repeal some of the Bush tax cuts for the very wealthy. Let's not have all these overseas wars.
I mean, the Democrats have a plan. And let's raise taxes on the top wealthy. But, before we get there, we pay our bills. If you're a family and you a credit card debt...
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... who says, let's not pay the bill?
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Well, the president is saying he's not going to be hostage in having veterans cuts on health care, in having cuts on K-12 education, in having cuts on food stamps, in having cuts on manufacturing to just pay our bills.
He's saying, we can discuss that. We can negotiate, but, first, pay your bills.
And I think the -- I think Senator McConnell understands this. And I think the president will sit down with Senator McConnell. He knows that we can't default.
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That's why I said that.
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Or Kevin McCarthy has got to come without 22 percent cuts on veterans' benefits.
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