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>> hey, larry, why is it that the administration has consistently said this financial reform is going to end too big to fail? and yet, at the same time has a way in this legislation to unwind too big to fail firms. why not say we're doing our best to prevent too big to fail but if it happens again we have a way to unwind the firms? seems like you are almost over promising because of the phrase too big to fail that everybody's so fearful of. >> i don't think so. if you're going to eliminate too big to fail, then you have to have the prospect of fail. the way you have fail is with the equivalent...

Benefits have been dispensed, they were done so in a way that people have acted were discriminatory. so i don't know whether that played a direct role in this. i know that is something that secretary vilsack is mindful of. >> did he misspeak because congress has not approved -- >> there are a differences in settleme settlements. there are several billion dollars on this -- again, the settlement has been entered into based on a judgment of discrimination. >> quickly, on financial reform, was square this circle. if this ends too big to fail, why is there a resolution authority to deal with too b...

So in a way that people have acknowledged were discriminatory. i don't know whether that played a direct role in this. maybe that's something secretary vilsack is mindful of having a zero tolerance policy. there have been a series of different settlements. there is several billion dollars on this -- the settlements didn't enter in to based on a judgment of discrimination. >> reporter: can you square the circle? if it's too big to fail, why is there a resolution of authority to do what's too big to fail? >> resolution authority -- let's go back to our aig example. you have what by all accounts ...

In principal, this is supposed to ensure that the products we get, if we get a marriage, we get a credit çcard. it's understandable. there's not surprises in there. you won't have the deceptive mortgages that contribute so much to the housing bubble and the crisis. we'd also have resolution authority the. that means it would be an orderly process. a large financial institution is not a bank, gives us a mechanism through which we could unwind that. you'll have a lot of derivatives -- i'm sorry, clearinghouses and changes so you won't end up with an aig with hundreds of millions of dollars of ...

Be surprises in there. it's understandable. you won't have the deceptive mortgages that contribute so much to the housing bubble and the crisis. we'd have resolution authority, if you have an aig situation, a large bank, large financial institution that's not a bank, it gives us a mechanism through which we could unwind that. you'll have a lot of derivatives will be traded over the -- i'm sorry, in clearinghouses or exchanges so you won't end up again with an aig sitting there with hundreds of billions of dollars of commitments that it can't make good on. those are the three most important poi...