On this “Face the Nation” broadcast, moderated by Margaret Brennan:

  • Sen. Elizabeth Warren, Democrat of Massachusetts
  • Rep. Patrick McHenry, Republican of North Carolina
  • Gary Cohn, former top economic adviser in the Trump White House and now vice chairman of IBM
  • Kara Swisher and Scott Galloway, co-hosts of “Pivot” podcast
  • H.R. McMaster, former national security adviser in the Trump White House and a CBS News contributor

Click here to browse full transcripts of “Face the Nation.”    

MARGARET BRENNAN: I’m Margaret Brennan in Washington.

And this week on Face the Nation: Has the banking crisis cooled, or are we in for another wild week?

Plus, former President Trump says he expects to be arrested this week, and, no surprise, that set off a political firestorm. Politics are out in full force, as former President Trump rallies his supporters ahead of a possible indictment in the Stormy Daniels hush money investigation. Robert Costa will join us with new reporting.

Then, after two banks collapsed and another received an infusion of cash from some of the nation’s biggest banks to keep it on life support, what’s the prognosis for the banking industry and the impact on our economy?

(Begin VT)

JANET YELLEN (U.S. Treasury Secretary): Our banking system is sound. Americans can feel confident that their deposits will be there when they need them.

JOE BIDEN (President of the United States): Americans can rest assured.

(End VT)

MARGARET BRENNAN: In public, officials say there’s nothing to see here. But what’s going on behind the scenes to shore up banking stability?

We will talk with the head of the House Financial Services Committee, Patrick McHenry, and industry critic Senator Elizabeth Warren. Former Trump administration economic adviser Gary Cohn will also be here. Plus, we will talk to tech watchers Kara Swisher and Scott Galloway about the stability of the sector, as the head of the embattled social media giant TikTok prepares to testify before Congress.

Vladimir Putin makes a bold trip to occupied Ukraine following a tense week between the U.S. and Russia and ahead of a meeting with China’s President Xi. Former Trump National Security Adviser General H.R. McMaster will join us for analysis.

It’s all just ahead on Face the Nation.

Good morning, and welcome to Face the Nation.

We had a sense of deja vu early Saturday, when former President Trump hit send on a social media post saying he — quote — “will be arrested on Tuesday. Protest. Take our nation back.”

He’s referring to the Manhattan case focusing on the alleged hush money payments he made to porn star Stormy Daniels late in the 2016 campaign. That grand jury is still hearing testimony and will need to vote as to whether or not Mr. Trump should be indicted.

But his urging support from his followers in advance has caused a political firestorm and has prompted additional security concerns. If Mr. Trump is indicted, that would be yet another first. No sitting or former president has ever been indicted.

Our Robert Costa has been reporting on the investigations. He’s here with me now.

I know you have been speaking to the Trump legal team.

What is the broader strategy?

ROBERT COSTA: Margaret, good morning.

Speaking to Trump’s lawyer Joe Tacopina and other close allies of the former president, it’s evident that, in the coming days, with regard to a possible indictment, the legal strategy is going to be combative. They’re going to question the scope of any possible felony that’s issued for former President Trump. They’re going to talk about the timing.

And they’re going to attack the credibility of Michael Cohen, the longtime Trump lawyer and Trump fixer, who’s at the center of this case over his payment. But there’s a lot of debate in the inner circle about how combative to be, including the use of the word protests in the former president social media language over the weekend.

There’s some consternation among some allies privately, maybe that’s a bit too far. But they do want to see solidarity with his supporters.

MARGARET BRENNAN: You’re — you’re gesturing to security concerns there too. Tell me about what’s being planned.

I mean, this is unprecedented territory, bringing in a former president for potential indictment. And how does this work?

ROBERT COSTA: What’s so surprising in the reporting is that there’s not much planning going on, at least between the Trump camp and the Manhattan district attorney.

People close to the former president say there are real gaps, tensions between the DA and the Trump team about how this could unfold, whether there would be a perp walk or cameras or the former president walking in, whether he would have a private entrance or not.

What we do know is that the Manhattan district attorney, Alvin Bragg, has informed his own colleagues that he will do everything he can to keep them — them safe, knowing the former president has called for protests. There’s a lot of unease inside the Manhattan DA’s office at this time.

Whenever there is an indictment, should it come, it would be coordinated by NYPD and Secret Service and other local authorities. CBS News has learned there are some conversations among those entities at this moment.

MARGARET BRENNAN: This is also, obviously, a huge political story.

Senator Lindsey Graham said yesterday the prosecutor in New York — quote – – “has done more to help Donald Trump get elected president than any single person in America today.”

Is that how the Trump camp sees it?

ROBERT COSTA: Well, Senator Graham is a longtime adviser and friend of former President Trump.

And the Trump wing of the Republican Party sees this as a very similar moment to what happened when the FBI raided Mar-a-Lago, that this is going to create a lot of momentum for the president, the former president, in the 2024 race. And what you saw over the weekend right now is a lot of calls for Republicans to speak out in defense of Trump, to come out and say, he’s — we’re with him, the DA is out of line.

There has been pressure on Florida Governor Ron DeSantis to speak up more loudly about what is happening to Trump. Some DeSantis allies say they want to have him stay in his own lane. You see former Vice President Mike Pence. He is speaking up, calling any possible indictment politically charged.

But he’s not trying to weigh in too much on the specifics of the case. That’s the balancing act you see from so many Republicans right now. Show anger towards the DA, but don’t necessarily rally too much around Trump’s side.

MARGARET BRENNAN: Right. And the Trump campaign has been issuing press releases, raising money off of this, and trying to call out those who haven’t spoken yet in the former president’s defense.

But this is just one case in Manhattan. We know there are many other issues legally here, including at the Justice Department with what the special counsel is pursuing.

What can you tell us about that?

ROBERT COSTA: I can’t underscore enough how my reporting shows that, while this is a lot of activity in Manhattan, in the district attorney’s office, the federal grand jury investigation of January 6 is very serious.

And former Mike — former Vice President Mike Pence could face a crossroads this week, whether he will testify or not. We’re told by sources the chief judge may force him to testify, but Pence will raise an argument on constitutional grounds that, as a former president of the Senate, he should not have to testify about his conversations with Trump about January 6.

MARGARET BRENNAN: All right, Bob Costa, I know you will have a busy week ahead. Thank you for all your reporting.

We want to turn now to our other big story, the banking crisis.

We go to Boston, and Democratic Senator Elizabeth Warren.

Good morning to you, Senator.

SENATOR ELIZABETH WARREN (D-Massachusetts): Good morning.

MARGARET BRENNAN: We saw this multibillion-dollar attempt by the biggest banks to shore up one of the regional banks, First Republic.

And even that hasn’t stopped the anxiety in the banking sector right now. Do you think that, in order to stop the bleeding, one of those big banks, too big to fail, needs to be able to buy up that smaller bank?

SENATOR ELIZABETH WARREN: So I think that, right now, what we’re trying to do is figure out the different ways to shore up these banks.

MARGARET BRENNAN: Do you need to allow for a merger? And is there any other white knight who could come in to save one of these regional banks, like First Republic?

SENATOR ELIZABETH WARREN: Look, right — right now, the one who’s saving all of these banks is the federal government.

And the federal government is doing it through various…

MARGARET BRENNAN: First Republic is still living. It’s still an actively traded company.


MARGARET BRENNAN: It’s not a failed bank.


The point is, right now, the Treasury Department, the Fed, all of the government regulators, the FDIC, are trying to fire on all cylinders to try to figure out what they can do to prop up these banks. And the point I was trying to make is, the reason they’re doing this is because this whole tranche of banks has been underregulated for five years now.


SENATOR ELIZABETH WARREN: And people are very concerned about, when you lift the hood, what’s under the hood, since the regulators clearly have not been on top of their job.


SENATOR ELIZABETH WARREN: It’s the reason that I’m calling right now for changes in the Fed in its regulatory approach, and changes in Congress, so that we roll back the authorization to lighten those regulations and that we put some accountability on these bank CEOs.


Well, I know there’s some dispute on the regulation. You’re — you’re talking about a tweak in 2018 to Dodd-Frank, and I know Barney Frank, one of the authors of that original regulation, a dispute with you in regard to what actually happened here. But I want to talk about the now.

SENATOR ELIZABETH WARREN: Right. Well, I wouldn’t call it a tweak.

MARGARET BRENNAN: Well, Senator, though, I want to ask you about what Congress can do now, because it would be up to Congress to lift the FDIC insurance levels for those deposits above $250,000.


MARGARET BRENNAN: In this environment we are in, do you think there’s will in Congress to do that?

SENATOR ELIZABETH WARREN: I think that lifting the FDIC insurance cap is a good move.

Now, the question is, where’s the right number on lifting it?


SENATOR ELIZABETH WARREN: But recognize that we have to do this because these banks are underregulated.

And if we lift the cap, we are requiring — or relying even more heavily on the regulators to do their jobs.

MARGARET BRENNAN: Where would you lift that cap to?

SENATOR ELIZABETH WARREN: Because it means that the government is backing them up.

MARGARET BRENNAN: And it’s for how long?

SENATOR ELIZABETH WARREN: This is a question we have got to work through.


SENATOR ELIZABETH WARREN: Is — is it $2 million? Is it $5 million? Is it $10 million?

Small businesses need to be able to count on getting their money to make payroll…


SENATOR ELIZABETH WARREN: … to pay the utility bills. Nonprofits need to be able to do that.

These are not folks who can investigate the safety and soundness of their individual banks. That’s the job the regulators are supposed to do.

MARGARET BRENNAN: Well, I want to get to that particular point in a moment, but back on this, are you talking to the White House currently about a proposal on lifting the FDIC insurance levels? Are they asking you to do that? And is this possible to pass?

SENATOR ELIZABETH WARREN: I — I don’t want to talk about private conversations, but I will say it is one of the options that’s got to be on the table right now.

MARGARET BRENNAN: There were already requirements on public disclosures here.

And there were flashing red lights.


MARGARET BRENNAN: In December, SVB reported to the SEC it had no interest rate hedges on its bond portfolio.


MARGARET BRENNAN: In March, the San Francisco Fed — this is publicly available — noted the banks in that district had the largest pace of decline and withdrawals in the country, perhaps due to higher exposure to accounts above $250,000.

So this was already out there in the public space.


MARGARET BRENNAN: Why didn’t the chief regulator in Silicon Valley area, the San Francisco Federal Reserve, act here? Do you have confidence in its president, Mary Daly?


The Fed should have acted, both the San Francisco Fed and the Federal Reserve Bank. Remember, the Federal Reserve Bank and Jerome Powell are ultimately responsible for the oversight and supervision of these banks. And they have made clear that they think their job is to lighten regulations on these banks. We’ve now seen the consequence of this.

Look, it was…

MARGARET BRENNAN: This was missing signals of what’s out there.

Do you think then — what’s the consequence for regulators in San Francisco and Washington?

SENATOR ELIZABETH WARREN: So, look, I — this is the point I have been trying to make all along.

Jerome Powell has said that all he wants to do is lighten regulations on the banks. I opposed him as chairman of the Federal Reserve Bank precisely for that reason.


SENATOR ELIZABETH WARREN: I said he was a dangerous man to have in this position.

So, what we need to do right now…

MARGARET BRENNAN: You — you opposed him when President Biden reappointed him as well. You — you — you opposed him consistently under — I understand that.

SENATOR ELIZABETH WARREN: I appointed him — that’s exactly right.

I opposed him both times.

MARGARET BRENNAN: I understand that.

SENATOR ELIZABETH WARREN: That’s exactly right, and for exactly this reason, because what he has done all along is lightened regulations on the banks.

And so what we need to do…

MARGARET BRENNAN: Do you, worry though, in this moment, where we have this crisis of confidence, that you are sowing more distrust of the federal government right now?

SENATOR ELIZABETH WARREN: Well, what I’m doing is being honest about what’s gone wrong.

I don’t think you build any trust at all if you don’t start with why it’s broken and who it is — excuse me — that is responsible for that. We need accountability for our regulators, who clearly fell down on the job, and that starts with Jerome Powell. And we need accountability for the executives of these large financial institutions.

Look, there should be clawbacks for Gary (sic) Becker and the others who explode these banks. So you take back the bonuses and big salaries.

MARGARET BRENNAN: Will that bill pass?

SENATOR ELIZABETH WARREN: We should — it certainly should. On both sides, there should be support for this.

And we should also borrow them from ever being…


SENATOR ELIZABETH WARREN: … in banking again.

We do that with stockbrokers. We should do the same thing with bankers.

MARGARET BRENNAN: Elizabeth Warren, thank you very much, Senator, for your time.


MARGARET BRENNAN: We are joined now by the Chairman of the House Financial Services Committee, North Carolina Congressman Patrick McHenry.

Good morning. Good to have you here in person.

REPRESENTATIVE PATRICK MCHENRY (R-North Carolina): Great to be here.

MARGARET BRENNAN: I want to go into the banking crisis, but I first want to ask you about a bit of business in regard to what Speaker McCarthy has said.

He’s directing Congress to investigate, he tweeted, whether federal funds are being used by the state of New York where a grand jury may soon indict the 45th president.

Why is he issuing this threat? And it isn’t this kind of congressional investigation just using federal funds from U.S. taxpayers on a political errand?

REPRESENTATIVE PATRICK MCHENRY: I think the viable question for the American people is whether or not you have a progressive prosecutor using the justice system to go after political enemies for a political splash.

And that seems to be the case here with the Manhattan DA.

MARGARET BRENNAN: But you’re trying now to focus on things of substance that are at crisis level in the banking sector.

Should one of the too-big-to-fail banks, the large, systemically important banks, be able to step in here and buy up a troubled bank like First Republic?

REPRESENTATIVE PATRICK MCHENRY: I think all options should be on the table.

There are a lot of things…

MARGARET BRENNAN: Is there anything that would block that kind of white knight rescue?

REPRESENTATIVE PATRICK MCHENRY: What I need to get to the bottom of investigatively in Congress is the who, what, when, where, why, and how of these bank failures and the decisions made over…

MARGARET BRENNAN: Signature and Silicon Valley?


And then over the — and the decision made over the weekend. We saw a private sector response to help support a bank.


REPRESENTATIVE PATRICK MCHENRY: Was that a viable option last weekend? Or was there an ideological lens that prevented them from taking these institutions and making it less turbulent for America?

MARGARET BRENNAN: That’s why I was asking the question I asked you, because what you’re suggesting there is that the Biden administration didn’t want a big bank to come to the rescue here.


MARGARET BRENNAN: And we’re now in a continued crisis.

You don’t have an answer to…

REPRESENTATIVE PATRICK MCHENRY: Well, I don’t have the facts on whether or not the FDIC had a viable buyer last weekend.


REPRESENTATIVE PATRICK MCHENRY: We have press reports of two — two banks that were at the table. We have comments from other bankers that they were prevented from bidding.

I don’t have the facts. And until I have the facts, I’m not going to draw a conclusion, especially in a moment like this.

MARGARET BRENNAN: But you’re suggesting it could have made things worse?

REPRESENTATIVE PATRICK MCHENRY: Well, I think we know we had a very rough week for American banking.


REPRESENTATIVE PATRICK MCHENRY: And we lost — lost confidence. And — and I think that is — that raises the questions of what happened last weekend.

MARGARET BRENNAN: You did hear Senator Elizabeth Warren suggest that she would favor a congressional initiative to lift the insurance on unin — currently uninsured deposits, those above $250,000.

She put a cap of $2 million to $10 million. For how long? How big? Who does that apply to? How would you craft that? Do you see a chance to work here?

REPRESENTATIVE PATRICK MCHENRY: Well, that’s the first time I have heard a proposal like that.

And I have not had a single conversation with the White House or the administration about deposit insurance, changing the levels. What I will do, though, legislatively, and in an oversight function, is to determine whether or not we need to address the FDIC deposit level.

We did it after the last financial crisis…


REPRESENTATIVE PATRICK MCHENRY: … raising it from $100,000 to $250,000.

MARGARET BRENNAN: You’re calling in the head of the FDIC and the vice chair for supervision from the Fed’s Board of Governors.


MARGARET BRENNAN: What is your intent? And will you call up Mary Daly, the head of the San Francisco Federal Reserve?

REPRESENTATIVE PATRICK MCHENRY: We need to understand the decisions that were made last weekend on — from Thursday until Sunday night…


REPRESENTATIVE PATRICK MCHENRY: … on whether or not there’s a viable private sector solution.

We also need to understand the underlying causes of the collapse of these banks. And we’re going to get to that. The question of the San Francisco Fed is a question of supervision.


REPRESENTATIVE PATRICK MCHENRY: We need to get to the bottom of whether or not this is a supervisory problem, a regulatory problem, a bank mismanagement problem, perhaps all three in all — in all — in all frankness.


I want to ask you about some of the things being said, populist politics around banking everyone engages in.


MARGARET BRENNAN: It never ends. But the two banks that did fail, they were in New York and they were in California.

Conservatives like Mike Pence, Ron DeSantis, Donald Trump, your colleague James Comer, they’re throwing around terms like woke banks advancing the liberal agenda. They’re blaming diversity and environmental initiatives.

Isn’t there a danger in casting a very substantive, active crisis in terms of a culture war?

REPRESENTATIVE PATRICK MCHENRY: I think everyone’s preaching their book. And that’s what we heard in your first segment.

MARGARET BRENNAN: Right. But do — do you agree that’s not helpful?

REPRESENTATIVE PATRICK MCHENRY: Everyone is preaching their book. And their book is, well, if they thought it was a problem a month ago, they apply it to this circumstance. That’s happening on both sides of the aisle.

But when it comes to the question of ESG and these initiatives, my fellow…

MARGARET BRENNAN: Environmental initiatives.




MARGARET BRENNAN: And the encouragement of companies to take that into consideration with their investment.


So, there is — there has been a lot of political debate about that. There is substance here. And if the management of these institutions was much more concerned about politics or the environmental or social goods, rather than the governance regulations, ensuring you had a capable board, you had proper oversight of people’s deposits, then this shows they had mismanagement.

So, I think there are — there are natural questions that we have…

MARGARET BRENNAN: But do you have evidence of that, that the — that the – – I mean, there wasn’t a risk officer fully at Silicon Valley Bank for an extended period of time.

REPRESENTATIVE PATRICK MCHENRY: Yes. And you had very few people that had banking expertise on the board of the bank. So, there are some questions, natural questions we should raise. And we should…

MARGARET BRENNAN: But, that’s bad — that’s bad management.


MARGARET BRENNAN: That’s not woke banking, whatever that means.

REPRESENTATIVE PATRICK MCHENRY: But, as I said, whatever your book of business was as a politician a month ago…


REPRESENTATIVE PATRICK MCHENRY: … a year ago is applied to this general circumstance.

What I’m trying to do is get to the details of what happened…


REPRESENTATIVE PATRICK MCHENRY: … and have whether — well, and then determine whether or not there’s a proper legislative response.


REPRESENTATIVE PATRICK MCHENRY: But when — when you have a hammer, you look at the world as a nail.


REPRESENTATIVE PATRICK MCHENRY: And that’s what we see out of politicians.

MARGARET BRENNAN: So, President Biden has asked Congress so far — maybe he asked for other things.

The only thing he’s asked for so far is to be able to claw back salaries of those — or pay to executives of failed banks, and then to ban them from working in the financial industry. This already exists for the great big banks.

Senator Warren supports that. Does that pass Congress?

REPRESENTATIVE PATRICK MCHENRY: Well, it’s something I’m going to look at — look at and consider.

MARGARET BRENNAN: But it doesn’t have to do with the active crisis?


But in response to these things, we know that there are known failures of this. We saw, for instance, deposits perform in a different way than regulators assumed, that uninsured deposits left at a more rapid rate than the insured deposits. That’s a new phenomenon.

When we have the speed of Twitter and a bank run, and the speed of electronic banking, those things are things that we need to look at legislatively and regulatorily.


REPRESENTATIVE PATRICK MCHENRY: The question of performance of bank executives, we certainly need to look at that and make sure…


REPRESENTATIVE PATRICK MCHENRY: … that they are aligned with consumer protection and depositor interests.

MARGARET BRENNAN: Congressman, we will be watching your upcoming hearing.

Thank you.

Face the Nation will be back in a minute. Stay with us.


MARGARET BRENNAN: And we are back now with the former top economic adviser in the Trump administration and currently the vice chairman of IBM, Gary Cohn.

Good morning to you.

GARY COHN (Former Director, National Economic Council): Good morning, Margaret.

MARGARET BRENNAN: We should also say you also used to run Goldman Sachs many years ago. So that’s why I want to talk to you about banking.

But, first, I want to ask you about the gentleman you used to work for, the 45th president, who may be indicted in the coming days. He’s called for protests. And that’s raising concerns about violence. Are you concerned about security and what will happen next?

FORMER DIRECTOR GARY COHN: Well, I’m anti-protest, so I don’t think we should be protesting anything.

I — I hope that America has learned from what has happened in the past. And I hope, whatever happens next week, we just have a very peaceful set of events. You know, when it comes to this, no one is above the law. But there are also maybe some politics involved. So both of these things may be true.

MARGARET BRENNAN: Your own security, are you concerned?


MARGARET BRENNAN: Living in Manhattan.

So, on the banking front, a week ago, you said this looked like a simple run on a bank. It’s continued, though, to put pressure on other banks.

Why should we assume that other banks are better at managing risk than Silicon Valley Bank was?

FORMER DIRECTOR GARY COHN: Well, Margaret, bank runs are bank runs.

Look, when people lose confidence in a bank, deposits go out the door very quickly. Banks are not designed to have deposits go out in massive scale. In fact, banks are designed to take your deposits and reinvest them back in the economy. They give out mortgages. They give out car loans. They give out student loans. They allow you to have your credit cards.

So there is not that much liquidity in a bank to allow that to happen. When confidence is gone, people say, look, I will take my money to someplace else where I have more confidence. And we are starting to see that run through the system.


FORMER DIRECTOR GARY COHN: And there’s a contagion effect.

You say, OK, one bank has the problem. OK, another bank has the problem. Is the bank I’m in, is it safe?


FORMER DIRECTOR GARY COHN: And if I have any doubt whatsoever that it’s not safe, I’m going to move…


FORMER DIRECTOR GARY COHN: … to the safest place I can, because it’s better safe than sorry when it’s your own hard-earned dollars.

MARGARET BRENNAN: Let’s talk about that contagion risk on the other side of this commercial break.

Gary, stay with us.

We will be right back.


MARGARET BRENNAN: Today marks the 20th anniversary of the start of the war in Iraq. The ground war lasted weeks, but U.S. military involvement in that country continues to this day.

Our Charlie D’Agata’s report on life in Iraq now is on our Web site at FacetheNation.com.


MARGARET BRENNAN: Welcome back to FACE THE NATION. And we continue our conversation now with former Trump economic adviser Gary Cohn.

Gary, I want to pick up on where we just left off. In terms of stopping the bleeding that continues to be happening for some of these mid-sized banks, like First Republic, is there a white knight? Does this only end when one of the big banks buys it up?

GARY COHN (Vice Chairman, IBM): Margaret, most likely that will be the scenario. At the end of the day, the banks that are most qualified and have the most secure and soundest balance sheets that can afford to absorb some of these larger regional banks are the largest banks in America, which in an ironic way is the last thing that the regulatory community and Congress wants to see, but that probably will be the likely outcome.

MARGARET BRENNAN: There were reports that Warren Buffet, the legendary investor, has been talking to the Biden administration. Is that a way around that?

GARY COHN: You know, it could be, but then Warren Buffet would become a bank holding company. And the restrictions on bank holding companies are fairly dramatic. And he would have to understand what that meant to his everyday core business, what he could do, what he couldn’t do, and all the regulations and restrictions he would have upon himself after having become a bank holding company. It’s not a simple decision.

MARGARET BRENNAN: Well, part of that decision has to also be, you know, is this going to hurt me in the long term. Larry Fink, who you know, he runs the world’s largest asset manager, told investors a few days ago, we could see more seizures and shutdowns coming. He said, you could see something like the savings and loan crisis in the ’80s and the ’90s where thousands of lenders just disappeared. Is he overstating it?

GARY COHN: No, I think Larry’s – Larry’s not overstating it. This is a crisis of confidence right now to some extent. Bank runs are a crisis of confidence. The government has put in place a backstops for the two banks that we know are in trouble. The banking industry itself is trying to help a third bank by putting deposits into that bank. So, we know what the remedy is for three banks.

But there are thousands of small and regional banks in the United States. This usually just doesn’t stop after two. We’re going to continue to go and investors and depositors will evaluate each bank and one by one they will start saying will — which — what is the next bank that is least secure that I most likely do not want to have my deposits in.

MARGARET BRENNAN: And you know trading world well, that moves like this. It moves so fast. It takes a lot longer for Congress to act or do anything.

GARY COHN: Look, these bank runs, because of the way they’ve been digitized and the fact that everyone has online banking or on telephone banking –


GARY COHN: These bank runs now can happen in minutes. You know, it’s not like you’re going to the bank anymore and you’re standing in line at the front door and you can slow it down. You can’t slow down digital banking.

MARGARET BRENNAN: So, you have called in an op-ed for common sense regulation. You do want Congress to act, you say, with smaller bank oversight. You say the role of the board of directors should be evaluated because of what happened at SVB. Apparently they didn’t have a lot of experience on it.


MARGARET BRENNAN: That the $250,000 limit on deposit insurance should be raised. Elizabeth Warren hit the same numbers you did, $2 million, $5 million, and $10 million.


MARGARET BRENNAN: Doesn’t that trickle down to customers and just make their costs go up if – if that kind of insurance extension happens?

GARY COHN: Well, you’re right, former chairman of the SEC, Jay Clayton, and myself wrote an op-ed where we talked about — look, you have to have a board that has qualifications. They have to understand banking. How can a board oversee a bank that they don’t have qualifications.

And, yes, expand deposit insurance. But you could have tiered pricing. It could be one pricing for deposits below $250,000, and then you could have tiered pricing as your deposits go up and you want them insured, you — it will be more expensive to insure those deposits.

But the key here is, Margaret, and this is very important, we need to keep deposits in the U.S. banking system. It’s imperative that we keep deposits in the U.S. banking system because that’s how we grow our economy by allowing banks to relend those deposits into consumers to consume, to buy houses, to buy cars, to go to college.


GARY COHN: There is an alternative. There’s a very important alternative that we talked about in our op-ed. The alternative is U.S. Treasury bonds, or U.S. Treasury bills. They pay a higher rate and they have a tax advantage to them. The horrible outcome would be if people take their money out of banks in the United States and put them into U.S. Treasury obligations. That would have a dramatic impact on slowing down economic growth and slowing down the economy.

MARGARET BRENNAN: The Federal Reserve meets this week. They control interest rates. Given the anxiety that’s happening, can Jerome Powell, the chairman of the Federal Reserve, go ahead with the hike he has planned or are things so bad out there that he can’t do what the market expects?

GARY COHN: Look, he’s in — he’s in a tough spot. We still have inflation. We’re starting to see some positive signs that inflation is coming down. Inflation hurts consumers as well. I think Jerome Powell is going to need to raise rates 25 basis points this week and then I think he, in his statement, in his press conference, he’s going to need to talk about how the Fed understands the cumulative effect, the lags effects of interest rates, and that they are going to be acutely aware of watching for the cumulative effects, the lags effects, and they’re going to be very data dependent as they move forward. And I think he’ll leave himself a lot of room in the forward – in the forward meetings to do whatever they need to do, which may be pause, may be cut, or it may be increased, depending on how inflation is going in the United States.

MARGARET BRENNAN: Because all of this will have an impact on the broader economy, ultimately.

GARY COHN: All of it. All of it. Both – both the banking side, as well as what the Fed does in policy.

MARGARET BRENNAN: And we know there’s political ramifications too. That’s why we – we pull all the threads together here.

Gary, thank you for your analysis.

We’ll be right back.


MARGARET BRENNAN: And we’re back now with the co-host of the “Pivot” podcast, Kara Swisher, who joins us from San Francisco, and Scott Galloway, who joins us this morning from Miami.

And in the interest of full disclosure, we want to note that Galloway is marketing professor at NYU but also directly or indirectly involved with several firms who have had funds at SVB bank. None are facing liquidity issues due to failure, he tells us.

Scott, with that, I want to start with you here.

What is the broader impact to America’s ability to continue innovating in the wake of this failure?

SCOTT GALLOWAY (Professor of Marketing, NYU Stern School of Business): Good to be with you, Margaret.

Yes, there’s — look, the modern U.S. banking system is a miracle. It takes short-term deposit and it terms them into long-term loans such we can grow the economy.

The issue is, do we have what Marjorie Taylor Greene asked for, and that is the U.S. splitting in two. And it’s not between red and blue states, it’s between what I would call venture capitalists in Silicon Valley who are trying to find a constructive solution, and venture catastrophists, who appear to have a vested interest in the weakening of the banking system and the U.S. dollar. There was – there was a letter that went out trying to facilitate a transaction signed by several hundred VCs. What is more interesting is who was not on that list. And it’s people with a large interest in crypto who have seen crypto go up 20 percent since there was huge insecurity injected into the system by, again, this kind of constant catastrophizing.

So, do we have two Americas in Silicon Valley? And I think lawmakers and Americans are trying to ask, should we be backstopping Americans or agents of chaos?

MARGARET BRENNAN: Who are you thinking of? Who are the agents of chaos?

SCOTT GALLOWAY: Well, people who post for the social media algorithms and in all caps say that chaos will ensue, that there will be lines around the banks. Some will get their money out, most will not. Large venture capital firms who have tens of billions invested in crypto, so do not shared – do not share kind of a collective interest in the health of the banking system, and individuals who, on the way up, see America as a cross between “The Hunger Games” and capitalism and on the way down believe we should be Denmark. So, capitalism on the way up and socialism on the way down is neither. It’s cronyism.

MARGARET BRENNAN: Kara, you know, so many start-up firms relied on this Silicon Valley lender to get their business and to get their business going. And they can’t necessarily go to bigger banks.

Is there a knock-on effect here where we see this huge part of our economy crippled?

KARA SWISHER (Co-Host, “Pivot” Podcast): Well, no, there’s money for them. There’s always money for them. They – they’re – there used to say there’s not enough rat holes to shove all the money in Silicon Valley down. So, I think they’ll get money, it’s just that this bank was particularly attuned to them, including giving them personal mortgages, personal loans, using collateral that was, you know, just the stock or the fact that venture capitalists invested in them. And so they had a harder time with traditional banks. And this bank catered to them in that way. And it was sort of a creature of Silicon Valley and they had advisers from Silicon Valley and every Silicon Valley start-up was in this bank in some fashion. And then they spread it around to events and other things.

And so it’s – you know, it’s a bank that’s too niche to one group of people and then it’s also a group of people that reacts really quickly, which is why the bank runs happened when they realized these — they couldn’t sell these Treasury bonds.

MARGARET BRENNAN: I want to ask you about what is about to happen here in Washington with this hearing this week. TikTok’s CEO is going to be called in to testify.

Kara, CBS has confirmed reports that the Justice Department is investigating that company for spying on U.S. citizens, including American journalists, by looking for their location data. And reportedly some of the people doing this were based in China.


MARGARET BRENNAN: The parent company says they’re no longer employed. Does this kind of surveillance happen at other social media firms?

KARA SWISHER: Well, in a different way. They’re selling you advertising, of course, because we have no privacy bill — national privacy bill in this country. And so it’s – you know, whatever these companies want to do, they have a lot of power to do so to — I call them information thieves. But they’re for – that’s for a different reason. That’s to sell you advertising. In this case it feels a little more frightening in that it’s a state-run government.

Now – now TikTok has said these are rogue actors, but the fact that they can do it, means they can do it.


KARA SWISHER: Meaning, if China wants to do it, they can do it.

And so that’s the big worry here is not – not only surveillance but propaganda. And so when Facebook’s dishing it out or Meta or whatever, they’re doing it for business reasons. Not great either. And, by the way, the government could come in there, and any government could come in there. And so we have to really be very careful about what the — all of these companies get, but particularly worried about state actors.

MARGARET BRENNAN: It seems that news development really throws some sand in the gears of progress on what ByteDance and TikTok were proposing as a way around the issue, which was something they called Project Texas. They don’t want a ban. They don’t want to be forced to be sold.

How, Scott, does this end up getting resolved?

SCOTT GALLOWAY: Well, America is waking up to the fact that there’s a neuro-jack (ph) plugged into the heads of America’s youth who spend more time on TikTok than every other media stream — media platform and we’re understandably weary of the CCP who would be stupid not to put their thumb on the scale of anti-American content and raise the next generation of American civic non-profit business and military leaders that just every day feel incrementally worse about America.

How it gets solved is very straightforward. The CCP was hoping that we wouldn’t be able to get out of our own way, and there’s a lot of evidence they might have been right, but they would like to maintain the world’s premier propaganda tool an hundreds of billions of dollars in shareholder value. And on the eve of the ban they will decide, if they can’t hold on to both, they’ll hold on to the hundreds of billions of dollars and they will agree to a spin.

MARGARET BRENNAN: Kara, what do you see here? I mean it was amazing “The Washington Post” had huge ads TikTok placed here in the local papers.


MARGARET BRENNAN: And, you know, the Commerce secretary was asked about a possible ban, and Gina Raimondo said, quote, the politician in me thinks you’re literally going to lose every voter under 35 forever. That is the political element here. How does this play out if it’s on the devices of 200 million Americans?

KARA SWISHER: Well, there is that. There’s that issue of – of people using it, and it’s very popular.

I think there’s been some advances made by other services now, so it’s a little less of a grip on teenagers. But I don’t think there’s going to be some giant protest by teens.

I think the issue you have to think about is, what happens if they ban, what happens to the money, because there’s a lot of U.S. investors in this company, let’s be clear. And then there’s a lot of U.S. investors very interested in the decline of TikTok, so that’s going on behind the scenes at the same time. But it’s very popular for politicians to use this as an anti-China, which they do. And some — it’s bipartisan, by the way.


KARA SWISHER: You know, it’s also Mark Warner, even as it’s Josh Hawley.

And so, you know, three years ago, four years ago I wrote a piece saying, I love TikTok, great product, I’m using it on a burner phone because I don’t trust the communist party. And so that’s the issue. This is a – this is a – this is a tool of propaganda. And the question is, what do we do about it?


KARA SWISHER: And why aren’t U.S. companies allowed in China? And so it’s very complex. I’m not sure — I’m not way down with the bandwidth (ph) with Scott, who has been calling for it for a while. I do think there are ways to protect people, but it’s very difficult, if it’s not an utterly U.S. owned company or somewhere else. And that’s going to be difficult for this company to do now at this juncture given (INAUDIBLE).

MARGARET BRENNAN: I just want to — I just want to underscore what you said, which is, for years you have said you don’t feel safe using this device — this on a device that you carry with you.

KARA SWISHER: Yes. Correct.

MARGARET BRENNAN: You use a phone that you don’t take anywhere with you because of the risk level here.

KARA SWISHER: Uh-huh. Uh-huh. Yes.

MARGARET BRENNAN: I mean this is in the pockets of millions of Americans. Hundreds of millions.

KARA SWISHER: Yes. Yes. I don’t use Facebook either. So, that’s me. I don’t trust any of them. But I really don’t trust the communist party of China more than, I guess, Mark Zuckerberg. So, low bar. Low bar.


Quickly, Scott, you know, we are looking at the potential indictment of the 45th president of the United States, who is back on social media platforms. Have there been any measures put in place that would limit the ability to use this as an organizing tool or in a dangerous way as he calls for protests?

SCOTT GALLOWAY: Not that I know of. I find it kind of borderline comical this kind of hollow debate around First Amendment or speech or pretending these — organizations pretending it was a really difficult decision. It’s pretty straightforward. I mean an organization or an individual adds shareholder value to these companies one of two ways. They create a lot of engagement through enragement or awe or they spend a lot of money on the platform. And about the time that President Trump was about to become much less enraging or have much less content about a few days before Biden’s inauguration, Meta found their backbone and kicked them off.

And about the time he’s about to spend another billion or billion and a half on media, they’ve all of a sudden decided he should come back on the platform. But my understanding is, the president, President Trump, has called for protests. And the last time he called for protests, we had an insurrection.


SCOTT GALLOWAY: So if they’ve ever wanted an excuse not to put him back on the platforms, they have it. But, at the end of the day –


SCOTT GALLOWAY: This is all about what drives shareholder value, not any sense of what connects us or any fidelity to the commonwealth.

MARGARET BRENNAN: Well, on that cynical note, we will leave it there.

Scott, Kara, always good to talk to you.

We’ll be back in a moment.


MARGARET BRENNAN: We turn now to former national security adviser, retired General H.R. McMaster, who joins us from Palo Alto, California.

I want to talk about Russia and China with you, but, first, stability in this country, the former president, who you worked for, has issued this call for protests. How concerned are you about security and what it means for the country?

LT. GEN. H.R. MCMASTER (RET.): Well, of course, Margaret, what I’m hoping for is that Americans come to their senses and recognize, you know, that we have strong institutions and should have confidence in the due process of law. And I think that’s what you’re seeing play out here. Nobody’s above the law. And I hope Americans really recognize that what’s not — not appropriate at this stage is any kind of violence, but – but really to demand the best from our institutions, to ensure that they’re insulated from any kind of political interference, but to have – to have confidence, you know, that, you know, if the president is, you know, as rumored to be indicted, that he will have the opportunity to defend, you know, himself against these charges.

MARGARET BRENNAN: And we will be following that.

When it comes to your wheelhouse on the national security front, we just saw these images of Vladimir Putin defiantly traveling to Ukraine. His first known trip to the occupied Donbas region of eastern Ukraine.

The Kremlin made a point to say that he visited children centers. This is days after an arrest warrant was issued on charges of abducting and deporting Ukrainian children forcibly to Russia.

How do you interpret this?

H.R. MCMASTER: Well, I think this is a moment of clarity. I mean look at just the brazen cynicism associated with him going to Sevastopol, which he illegally annexed in 2014, and then to Mariupol, going there at night, you know, visiting sites – the few sites, you know, that hadn’t been rubbled, you know, by – by the Russian military as they inflicted murder on innocent people in Mariupol.

And, as you mentioned, you know, he’s just been indicted by the International Criminal Court for kidnapping, you know, tens of thousands of Ukrainian children. And, of course, this is all on the eve of Xi Jinping, you know, visiting Putin.

So, I think what you’re seeing is really quite clearly this axis of authoritarians who are a real threat to – to, you know, to freedom and to civilized people around the world.

MARGARET BRENNAN: China, we should also note, is accused by the U.S. government of actively conducting genocide against minorities in country.

H.R. MCMASTER: Absolutely.

MARGARET BRENNAN: Do you think it gives any pause to Xi Jinping when he boards that flight to Moscow that Vladimir Putin was — just had this arrest warrant issued?

H.R. MCMASTER: You know, sadly, Margaret, I don’t think so. You remember it’s really ten years ago, almost to the day, that Xi Jinping made his first visit to Moscow, and they declared their special friendship. Since then, they’ve just continued to double down on this relationship.

Remember, just before the Beijing Olympics last year, just prior to the reinvasion of Ukraine on February 24th, they professed their partnership with no limits. And he’s visiting – you know, he’s visiting Moscow at a time when it’s become clear from U.S. government reports and from investigative journalists that China is supplying weapons, munitions, all kinds of other support for Putin as he continues this onslaught against the Ukrainian people.

This, of course, is economic support.


H.R. MCMASTER: China has increased their purchase of Russia oil by 60 percent. And they’re buying more natural gas. They’re providing all sorts of technological capabilities that are important to sustaining Russia’s war-making machine.

MARGARET BRENNAN: The U.S. government admits they know surveillance footage or things used for enhancing targeting of the battlefield as being sold by Chinese companies, but they say no lethal support yet has happened. You’re saying you don’t believe that?

H.R. MCMASTER: I don’t believe that. I think what you’re going to see in the coming days and weeks is more and more evidence of Chinese support. You know, the China — China doesn’t want to get caught doing this, right, because at the same time as they’re helping the Russians murder Ukrainians, they’re also saying, hey, China’s open for business, and they’re trying to appeal to American and other investors to continue to prop up their status mercantilist model, even as they commit genocide, even as Xi Jinping, just in the – in the – in the recent people’s congress last week he gave really four speeches essentially preparing the Chinese people for war. I mean these were jingoistic speeches.

He also made it clear that the security economy is – is going to dominate, you know, over the free market economy or the tech sector.


H.R. MCMASTER: And so I think it’s time for us really to assess the degree to which we have been, over many years, underwriting, in many ways, our own demise, you know, with investments in China and really not doing more to shore up –


H.R. MCMASTER: You know, short up fragile supply chains.


H.R. MCMASTER: We’ve essentially given an authoritarian regime coercive power over our economy, much like Europe did with Russia on hydrocarbons.

MARGARET BRENNAN: I want to ask you – yes. I want to ask you about Republican Governor Chris Sununu wrote an op-ed saying, some in the Republican Party have lost their more compass on foreign policy, evidenced by former President Trump, who once called Putin’s invasion genius and savvy. The governor of Florida has said similar things that appear to be diminishing the importance of the conflict.

What do you make of the fact the top two contenders for president in the Republican Party are pushing this?

H.R. MCMASTER: Well, I think it’s sad, Margaret. I think, you know, why not just – just focus on two things, look at how valorous the Ukrainians have been fighting for their own freedom. That should restore confidence maybe in — in our own nation.


H.R. MCMASTER: And – and the gift that we have of being free and having freedom of expression and freedom from fear.


H.R. MCMASTER: You know, I think also, look at just the atrocities that have been visited on – on the Ukrainian people.


H.R. MCMASTER: And then also recognize that it’s in our interest.


H.R. MCMASTER: You know, where does it stop? You know, Putin went to Sebastopol just to get annexed in 2014.


H.R. – yes.

H.R. MCMASTER: And, of course, there’s a direct line between that and the reinvasion.

MARGARET BRENNAN: There is – I’ve got to —

H.R. MCMASTER: So I – I think if we – if we don’t – if we’re not strong, you know —

MARGARET BRENNAN: I’ve got to leave it here. I’ve got to leave it here, but I appreciate your analysis.

H.R. MCMASTER: Thanks, Margaret.

MARGARET BRENNAN: We’ll be right back.