♪ it's a beautiful morning ♪ i'm margaret brennan in washington. this week on "face the nation" has the banking crisis cooled or are we in for another wild week? former president trump says he expects to be arrested this week and 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? >> our banking system is sound. americans canlee confint that their deposits will be there when they need them. >> americans can rest assured. in public officials say there's nothing to see here. what's going on behind the scenes to shore up banking stability? we'll 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 be here and we'll talk to kara swisher and scott galloway about the stability of the sector as the head of 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. 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 he's urging support from his followers in advance has caused a political firestorm and prompted additional security concerns. if mr. trump is indicted, that would be yet another first.

no sitting or former president has ever been indicted. 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? >> margaret, good morning. speaking to trump's lawyer joe tack copena and other close allies it's evident in the coming days with regard to a possible indictment the legal strategy is going to be combative and they're going to question the scope of any possible felony 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 long-time trump lawyer and trump fixer who is at the center of the case over the payment. there's discussion over how combative to be including protest. there's some consternation maybe that's a bit too far but they want to see solidarity with

supporters. >> you're gesturing to security concerns there. tell me about what's being planned? i mean, this is unprecedented territory. bringing in a former president for potential indictment. how does this work? >> 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 d.a. 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 know is the manhattan district attorney alvin bragg informed his own colleagues he will do everything he can to keep them safe, knowing the former president has called for protests. there's a lot of unease inside the manhattan d.a.'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.

>> 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? >> senator graham is a long-time adviser and friend of former president trump and the trump wing of the republican party sees this as a similar moment to what happened when the fbi raided mar-a-lago. this is going to create momentum for the former president. what you saw was a lot of calls for republicans to speak out in defense of trump, to come out and say we're with him, the d.a. is out of line, there's been pressure on florida governor ron desantis to speak up more loudly about what is happening to trump. some desantis allies want to have him stay in his own lane. you see former vice president mike pence 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 d.a. but don't necessarily rally too much around trump's snide the trump campaign has been issuing press releasing raising money and trying to call out those who haven't spoken yet in the former president's defense. this is one case in manhattan. 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? >> i can't underscore enough how my reporting shows while this is a lot of activity in manhattan in the district attorney's office the federal grand jury investigation of january 6th is very serious and 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 as a former president of the senate he should not have to testify about his conversations with

trump about january 6th. >> all right. bob costa, i know you'll have a busy week ahead. thank you for all your reorting. 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. >> good morning. >> 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? >> so i think that right now, what we're trying to do is figure out the different ways to shore up these banks. >> 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? >> look, right now, the one who is saving all of these banks is the federal government. >> first republic is not a failed back. >> i understand that. the point is, right now, the treasury department, the fed, all of the government regulators, fdic, are trying to fire on all cylinders to try to figure out what they can do to prop up these banks. the point i was trying to make, is the reason they're doing this, is because this whole tranche of banks has been under regulated for five years now. 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. >> okay. >> 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 dispute -- >> on the ceos. >> you're talking about a tweak in dodd/frank and barney frank, one of the authors of the original regulation, dispute with you in with regards to what happened here. >> i wouldn't call it a tweak. >> well, senator, though, i want to ask you about what congress can do now? it would be up to congress to lift the fdic insurance levels for those deposits above $250,000. in this environment we are in, do you think there's will in congress to do that? >> i think that lifting the fdic insurance cap is a good move. now the question is, where is the right number on lifting it. >> yeah. >> but recognize that we have to do this because these banks are under regulated and if we lift the cap, we are requiring or relying even more heavily on the

regulators to do their jobs. >> where would you lift that cap to? >> that government is backing them up. >> for how long? >> this is a question we have to work through. >> yeah. >> 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, 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. >> 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? >> i don't want to talk about private kfrpgsz conversations, but i will say it's one of the options that has to be on the table right now. >> there were already requirements and public disclosures and there were flashing red lights.

in december, svb reported to the sec it had no interest rate hedges on its bond portfolio. in march the san francisco fed, this is publicly available, noted the banks in that district had the largest pace of decline in withdraws in the country, perhaps due to higher exposure to accounts above $250,000. so this was already out there in the public space. 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? >> no, i do not. the fed should have acted, but 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. >> this was missing signals of

what's out there. do you think then -- what's the consequence for regulators in san francisco and washington? >> so look, this is the point i've 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. i said he was a dangerous man to have in this position. >> you opposed him when president biden reappointed him as well? you opposed him consistently. i understand that. >> that's exactly why i opposed him both times. that's exactly right. and for exactly this reason. because what he has done all along is lightened regulations on the banks and so -- >> do you worry in this moment where we have the crisis of confidence that you are sewing more distrust of the federal government right now? >> 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 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 becker and the others who explode these banks, so you take back the -- >> will that bill pass -- >> big salaries -- it should. on both sides there should be support for this. we should bar them from ever being in banking again. we do that with stock brokers. we should do the same thing with bankers. >> thank you very much, senator, for your time. >> thank you. 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. >> great to be here. >> i want to go into the banking crisis, but i first want to ask

you about a bit of business in regards to what speaker mkts 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 isn't this kind of congressional investigation just using federal funds from u.s. taxpayers on a political errand. >> i think the viable question for the american people whether or not you have a progressive prosecutor using the justice system to go after political enemies for political splash, and that seems to be the case here with the mahattan d.a. >> you're trying now to focus on things of substance that are at crisis level in the banking sector. should one of the two big too fail banks, the large systemically important banks, be able to step in here and buy up a trublds bank like first

republic? >> i think all options should be on the table. >> is there anything that would block that white knight rescue? >> what i need to get to the bottom of investigatively in congress, who, what, where, when, why, and how of these bank failures -- >> signatre and silicon valley. >> that's right. and the decision made over the weekend. we saw private sector response to support a bank. was that a viable option last weekend or an ideological lens that prevented them from taking the institutions and making it less turbulent for america. >> that's why i was asking the question. you're asking the biden administration didn't want a big bank to come to the rescue here. >> we don't know that. >> and we're now in a continued crisis. you don't have an answer to -- >> i don't have the facts on whether or not the fdic had a viable buyer last weekend. we have press reports of two banks that were at the table. we have comments from other bankers they were prevented from

bidding. i don't have the facts. until i have the facts i'm not going to draw a conclusion. >> you're suggesting it could have made things worse? >> well, i think we know we had a very rough week for american banking and we lost confidence, and i think that is -- that raises the questions of what happened last weeknd. >> you did hear senator elizabeth warren suggest that she would favor a congressional initiative to lift the insurance on -- currently uninsured deposits above $250,000? she put a cap of 2 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? >> that's the first time i've 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 everysight

function, is determine whether or not we need to address the fdic deposit level. we did it after the last crisis, raised it from 100,000 to 250,000. >> what is your intent and will you call up mary daly the head of the san francisco federal reserve. >> we need to understand the decisions that were made last weekend from thursday until sunday night. >> yeah. >> on whether or not there's a viable private sector solution. we need to understand the underlying causes of the collapse of these banks and we'll get to that. the question of the san francisco fed is the question of supervisor. we need to get to the bottom of whether this is a supervision problem, bank management, perhaps all three. >> i want to ask you about some of the things being said. populace politics around banking, everyone engages in. >> 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, blaming diversity and environmental initiatives. isn't there a danger in casting a very substantive, active crisis in terms of a culture war? >> i think everyone's preaching their book, and that's what we heard in the first segment. >> right. >> you agree that's not helpful? >> preaching their book and their book is -- well if they thought it was a problem a month ago, they apply it to this circumstance, happening on both sides of the aisle. but when it comes to the question of esg and these initiatives -- >> environmental initials. >> the encouragement of companies to take that into consideration with their investment. >> yes. >> so there is -- there has been a lot of political debate about that. there is substance here. if the management of these institutions was more concerned about politics or the

environmental or social goods, rather than the governance regulations, insure you had a capable board, proper oversight of people's deposits, then this shows they had mismanagement. i think there are natural questions that we have to -- >> i mean there wasn't a risk officer fully at silicon valley bank for an extended period of time. >> he yes. you had very few people that had banking expertise on the board of the bank. so there's some questions, natural questions, we should raise -- >> but that's bad management. >> yes. >> that's not woke banking, whatever that means. >> as i said, whatever your book of business was as a politician a month ago, a year ago is applied to this general circumstance. what i'm trying to do is get to the details of what happened and have -- well and then determine whether or not there's a proper legislative response. >> yes. >> but then you have a hammer, you look at the world as a nail. >> right. >> and that's what we see out of politicians. >> so president biden has asked congress so far maybe he asked for other things, the only thing

he asked for so far is to be able to claw back salaries of those that were paid to executives of failed banks and then to ban them from working in the financial industry. this already exists for the big banks. senator warren supports that. does that pass congress? >> well, it's something i'm going to look at and consider. >> but it doesn't have to do with the active crisis? >> it doesn't, 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 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 are things we need to look at legislatively and regulatorily. the question of performance of bank executives we need to look at that and make sure they're aligned with consumer protection and depositor interests.

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now and see how much you can save. and we are back now with a former top economic adviser in the trump administration and currently the vice chairman of ibm, gary cohn. good morning to you. >> good morning. >> we should say you used to run goldman sachs many years ago. i want to talk about banking, but first 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? >> well, i'm anti-protest, so i don't think we should be protesting anything. i hope that america has learned from what has happened in the past, and i hope whatever happens next week, we have a very peaceful set of events. you know, when it comes to this, no one is above the law. but there may be some politics involved so both of these things

may be true. >> your own security, are you concerned? >> no, i'm not. >> 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 other banks are better at managing risk than silicon valley bank was. >> bank runs are bank runs. when people lose confidence in a bank, deposits go out the door 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 in the back in the economy. they give out mortgages, car loans, student loans, allow you to have your credit cards. 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 some place elsewhere i have more confidence. we are starting to see that run through the system.

there's a contagion effect. one bank has the problem. another bank has the problem. is the bank i'm in, is it safe? >> yeah. >> if i have any doubt whatsoever that it's not safe i'm going to move to the safest place i can because it's better safe than sorry when it's your own hard-earned dollars. >> talk about that contagion risk on the other side of this commercial break. stay with us. we will be right back. what if we live to like 100? that's 35 years of being retired. i don't want to outlive our money. and i have been eating all these stupid chia seeds! i could totally live to be 100! why do i keep taking such good care of my- since we started working with empower, we're able to get all our financial questions answered, so we don't have to worry. so you never- no. never. join 17 million people and take control of your financial future to empower what's next. start today at empower.com we pulled people off the street and asked them about their hearts. how's your heart? my heart's pretty good. you sure? how do you know? you're driving a car you have to check engine light.

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welcome back to "face the nation." 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? >> 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 kabsorb some of these larger

regional banks are the largest in america which is the