Transcript of CNBC’s Barack Obama interview

Harwood: Your team has indicated that Sheila Bair will remain at the FDIC. What do you intend to propose beyond the plan that she's proposed to try to mitigate foreclosures, and when will you propose it, and do you think the most important priority is to spur home buying again, perhaps through tax credits, or to limit foreclosures?

Obama: Well, first of all, I do think that the FDIC and Sheila Bair have had the sense of urgency about the problem that I want to see. And so, you know, we haven't made any official statements on this yet, but I think generally they've been on the case with the resources that they have to try to shore up the system. I think that when it comes to the housing market, the Federal Reserve Board has done what it can to lower rates about as low as they can go. And so we've seen some activity around refinancing. That doesn't really solve the problem, though, of declining home values. And I think the most important thing when it comes to declining home values is number one, preventing further foreclosures. That just erodes home values across the board. And that's why I think for those of us who are still paying a mortgage — you know, you hear sometimes folks up in the country say “Well, I've been responsible. Why should I provide any help to somebody who maybe took out a mortgage that they couldn't afford?”  Well, this goes back to the adage that if your neighbor's house is burning, you got to first worry about putting out the house, even if they'd acted irresponsibly.

I think that's true when it comes to foreclosures as well. We've got to prevent the continuing deterioration of the housing market. That starts with foreclosures. That doesn't mean that we can't also provide some assistance. It may not all be in the form of mortgage assistance. One of the things that we think is very important in our reinvestment plan is to provide incentives to weatherize homes all across the country. That is the kind of long-term investment that can drastically cut the country's energy bills, increase energy independence, reduce global greenhouse gases.

So, you know, there are some areas where we can make progress and provide relief and help to home owners. But dealing with this foreclosure crisis is something that we've got to do. I expect to unveil plans to prevent foreclosures in consultation with Barney Frank and Chris Dodd, who've done some very good work on this, sometime in the next month or two.

Harwood: As part of the next part of the financial bailout package?

Obama: As part of our multipronged attack to deal with the crisis.

Harwood: There's been a lot of speculation that Larry Summers, the former Treasury secretary who's heading your national economic council, will be selected by you to replace Ben Bernanke as the Fed chairman when Bernanke's term expires in 2010. Is that your intention or are you willing to say that you will reappoint Ben Bernanke?

Obama: Larry Summers doesn't even have this job yet. We — I've assigned him to it but we're not in our administration. I think it is premature for me to speculate on jobs coming up two years from now when I haven't gotten my current team in place.

Harwood: Let me ask you about regulation. We're sitting in a building that once housed the SEC.

Obama: Right.

Harwood: How extensive an overhaul of the financial regulatory apparatus will you propose and support? When will you do that? And do you think there is a global regulatory apparatus that needs to be created? You've got the G-20 coming up in April in London.

Obama: Right. Well, by the time that G-20 meeting takes place, we, I believe, will have presented our approach to financial regulation. I think some international coordination has to be done. But right now, we just have to take care ... (unintelligible) ... and Wall Street has not worked, our regulatory system has not worked the way it's supposed to. So it's going to be a substantial overhaul. We're going to have better enforcement, better oversight, better disclosure, increased transparency. We're going to have to look at this alphabet soup of agencies and figure out how do we get them to work together more effectively. We've got to stop splintering functions in such a way that capital in one form is treated one way and capital in another form is treated another way, because these days in global financial markets, they're all fungible. And there's systemic risks that are possible, whether it's in the form of derivatives or insurance or traditional bank deposits. So we've got to update the whole system to meet the needs of the 21st century. This is an assignment that my team is already beginning to work on and I think that we will have, fairly shortly, a package that we've worked alongside Barney Frank and Chris Dodd, to present to the American people.

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