Commerce Secretary on Derivatives

" We mostly been bringing you news from Washington DC about health care but there's another bit of a battle brewing in that is. Involving a regulation of over the counter derivatives right we're talking about these things like credit default swaps and some of the other derivative items. I got some of these banks and so much trouble. There's some would say they should be mandated on the exchange others surprisingly little bit like Barney Frank say we can leave them over the counter as long as a registered. Joining us now from the White House is Gary -- he is secretary of the US Department of Commerce we welcome secretary -- thank you very much. My pleasure I gotta admit you know -- a little bit surprised on the course last week I was at the CME group doing the show when I interviewed the vice chairman of the CME group Leo Melamed and he pointed out that when Lehman went bankrupt at one point one trillion. In notional value derivatives. On the CME and that all covered and all were paid you course you make indication the exchanges. I'm a little bit surprised by some including. Barney Frank who were saying. That we shouldn't put these things over and exchange what's that position."

" Why I I'm not familiar with the -- and Barney franks position and all the rationality goes into it all I know is that we need reform. And does so much of what we have in place today has really held over and really designed in the 1930s. And so much of the financial markets have become so much more a sophisticated I mean things like credit to small a default swaps and derivatives. Those were I mean hardly even known back in the 1933 from the forties and so we really need to look at. Overhaul of of all of these regulations that are too many gaps. And there are so many. Areas that are completely non regulated right now and as a result that we have all suffered from this failure of oversight. Of the regulatory system that has hurt. Individuals hurt families and a lot of businesses who now can't even get credit even though we've been trying to shore a lot of these banks. And I can tell -- so many business people are coming up to me and saying. They've got great credit why can't they be able to get alone from their neighborhood bank -- the government putting all this money to banks and stop filtering down to them. So this whole. Financial system have to be restored we have to have confidence and it. We also have protect consumers and that's what the president is really focusing on as well as giving more regulatory authority for some of the existing organizations. A little bit of consolidation. And also making sure the lot of the loopholes in the gaps in in coverage are now address."