 So, I'm really embarrassed after such a wonderful paper instead of papers, but rather than give one specific paper, I'd like to offer a broader overview of the challenges that central banks and the ECB face. My comments do summarize and extend a bunch of written work. And I put the list on the slides in case some of this sparks your interest. The, I'm going to broadly go through the challenges in order from time to complexity from interest rates, inflation, mental stability, COVID and future risks, including climate. So let's start with the supposedly easy one. The simple single most basic task of central bank is to control inflation via the short run interest rate. And behind this task are some important facts, which I illustrate with these graphs. The first I've got the CPI and interest rates. And the second slide I've got the core CPI less than energy and interest rates as well with the US on top and the arrow on the bottom. So the graphs emphasize what you know the ECB has routinely failed to make its 2% interest rate target. And the US and Japan have similarly struggled. So why is this now before complaining? I don't think this is a big problem. I like zero inflation. Indeed, I like a price level target. I grew up in the 1970s. So if I were in charge of a central bank around the end of last year, 1% inflation unemployment at half centrally lows, insanely low interest rates. I would have rolled out a big mission accomplished banner and gone on a long cruise. It's a good thing I don't run a central bank. I salute the honesty of our central bankers for not worrying that they didn't for worrying that they didn't attain their target and worrying about what this means for their ability to control inflation or deflation. Now, second thing you see in the graphs is that interest rates and inflation are positively correlated in long run of the business cycle. And moreover, at the far right, suggestively, when the US raised interest rates, inflation went up and when Europe didn't, inflation did not go up. Interesting fact. The core CPI, less food and energy, shows even better the remarkable fact that inflation is even more stable at the effective lower bound than it was when central banks were able to move interest rates. Remarkable stability despite nothing moving with interest rates. So these facts raise a deep question. What is the mechanism by which interest rates raise or lower inflation. There's three theories here. In all of them interest rate equals real rate plus inflation is a steady state. The question is, is it a stable steady state or an unstable steady state and determinant or indeterminate. In the classic ISLM adaptive expectations model, which pervades most central bankers thinking, it's an unstable steady state as illustrated by my seal. If you peg interest rates, inflation must spiral up or down the ball flies off the seals nose. If the central bank lowers interest rates, inflation rises. The seal moves one way the ball goes the other way, but then the central bank has to quickly catch up. And the seal can stabilize inflation by following a Taylor rule moving its nose more than one. In rational expectations models, New Keynesian models, I equals R plus by is a stable steady state as illustrated by Professor calculus on the bottom. And inflation will eventually settle down to an interest rate. If the central bank lowers interest rates, inflation might briefly rise, but then it'll follow interest rates downward. Now in the classic New Keynesian model, inflation gets multiple equilibria at an interest rate peg and becomes more volatile. If you add active fiscal policy to the New Keynesian view, you get stability and germinacy. The sudden deflation would mean governments have to raise taxes to pay off bondholders. Governments aren't about to do that bondholders know it and that's what stops the deflation at the zero bound. Now these three models are basically impossible to tell apart in normal times interest rates move positively with inflation in equilibrium. So how do you tell them apart? Well run an experiment. Stop the seal's nose. Stop Professor calculus' hand and let's watch what happens. We did that in 2008. Nothing happened. There was no deflation spiral, there was no multiple equilibrium volatility, and there's also no inflation despite a 3,000% increase in reserves dealing a fatal blow to MV equals PY. Macro economics is seldom offered so clear an experiment in which rival theories make unambiguous and robust predictions. The usual ISLM view, which describes central bankers pretty well, clearly predicted a deflation spiral and it did not happen. That view is wrong. Next, the evident fact of stability at the interest rate peg and both of the New Keynesian theories with active or passive fiscal policy lead to an uncomfortable but unavoidable prediction. A widely anticipated, steady, persistent rise in interest rates raises inflation as long as fiscal policy is okay. If Professor calculus wants the ball to the move to the right, you should slowly and steadily move his hand to the right. Now I emphasize all the caveats there anticipated unexpected movements can send inflation the opposite way 1980 was unexpected. Steady and persistent are crucial to to see the long run stability on top of short run dynamics and and fiscal policy important lowering interest rates isn't going to help that as well. Now, I've been writing about this. Do I know it's true? No. Theory and data scream it, but a half a century of tradition says otherwise. My point today is to ask questions, not to advocate particular answers. The ECB's core mission is to hit an inflation target, which it isn't doing. Theory and fact seem to suggest that the steering wheel is hooked up the reverse of what everyone says it is. Now shouldn't figuring this basic question out be the focus of an intense research program. And shouldn't a policymaker who has to wait different theories in real time and sort of a Bayesian way with some weight on this possibility. Final thought is the short term interest rate even the right instrument. That's worth asking to I've thought elsewhere about targeting the spread between indexed and non index debt, which should nail inflation down. And there's lots of other proposals out there. Next challenge, the strategic review, which the US Fed has just about finished its strategic review. And the ECB is compute completing one and Bravo to both institutions, rethinking basics every now and then is really healthy. So let me offer you my view of what's coming out of the US strategic review as you finish up the ECB strategic review. First in the language of policymakers, I detect regret over raising the interest rate when unemployment declined on worries of future inflation because inflation didn't in the end rise and you can see that in the graph. I've got unemployment inflation, the federal funds rate, they raise the federal funds rate because they saw unemployment very low and there was no, the inflation never did come out. That's really unusual. Again, maybe too much honesty. Any other institution that said inflation's coming unless we do something goes ahead and does something and inflation doesn't come would say, well, look good for us because of our wise action inflation didn't break out. Employments and historic lows soft landing mission accomplished. Well, they didn't do that, but that's it. That's an interesting observation on the fed. But the main message I think to come out of it for policy is the Fed is going to follow more of a pure inflation target, waiting to see actual inflation before raising rates. And it'll even allow inflation to rise somewhat over target. Some people have talked about 2.5%. That policy is a little reminiscent of the 1970s, which didn't turn out so well. Let me remind you. But perhaps there's other reasons for what happened in the 1970s. Second message, the Fed is going to put a lot more weight on inclusive employment. It wants to hope that more inflation will push unemployment down among low income and minority groups. Now, this is really praiseworthy goal, but the methods pretty curious to the static Phillips curve is a permanent trade off between inflation and unemployment was also last seen in the 1960s, and that didn't turn out so well. Now, in my view, inclusive employment is an important overlooked province of micro economic and labor market policy. And one lesson later today, central banks can't fix everything and they shouldn't try. Third, the bed basically announces interest rates will be zero for a long time. And final observation, the Bayesian weight of my proposition that one can raise inflation by slowly and predictably raising interest rates. The basing weight on that remains zero. Now, the policy review the Fed policy review also has important lessons for academics not policy. It's curious that the languages are quite different. It represents a victory of forward guidance over quantitative easing or negative interest rates as stimulators. The ECB evaluation of negative interest rates will be very interesting in this context. The Fed's also even more vague about just how much inflation it will tolerate, how much it will let past shortfalls guide present excesses, and so forth. So it represents one more victory of discretion over rules, much to the sorrow of my colleague John Taylor. Now, the victory of forward guidance strikes me as a puzzle. And I offer this in company of academics who are trying to advise central bankers. It's a really strange prediction of New Keynesian models. And I show you a graph from a past paper that illustrates forward guidance in a standard New Keynesian model. So in these graphs, the economy is going to be at the zero bound for five years. And as you move across the graphs, the central bank delays its lift off for progressively longer periods. And now watch the red arrows, the intersection of the red inflation and blue output lines of the left axis. You can see that small delays in lift off have very strong stimulative powers today. That's forward guidance. But this is way too strong. As you can see, promises further in the future have stronger effects today because these solutions stable forward explode backward. This is an experiment. I asked my wife that if I promised to cook dinner one night five years from now, would she would she clean up for a week? It didn't work. These effects also get stronger as prices get less sticky without limit until you get the frictionless limit point and the whole effect vanishes. Does anyone believe that a central banker will take an action in the future that he or she believes not best at the time to fulfill a forward guidance promise made years ago? Now you all know these jokes. For these reasons and more power for forward guidance is regarded as a bug, a promise to be a problem to be fixed in New Keynesian models. Mike Woodford, Sevilla Gebex and many others have long papers with lots of equations to modify expectations to fix the bug. I have a short simple paper that fixes the bug with active fiscal policy. It's really strange that this model, regarded as a puzzle to be fixed among academics, emerged victorious from the Fed's policy review. What do I make of that? Well, I think central bankers like to think everybody else listens to their speeches. I think the idea that speeches are a powerful policy tool. But really, I think this story captures a deep disconnect between academic modelers and the policymakers largely unreconstructed ISLM worldview. That's a warning for you academics and a deep and troubling lesson for the ECB to consider during its policy review. Let's move on through time and scope to financial regulation. So after the 2008 crisis, it was obvious that regulation needed some reform. And there was a clear choice. On the one hand, we could have absorbed Doug Diamond's favorite famous dictum. Financial crises are always and everywhere caused by problems related to short term debt. Now that insight suggests the Atmati-Hellwig approach. Purge the system of run-prone short term financing and thereby create a resilient financial system in which people can lose money without bringing down the system. Our central banks and regulators chose a different path, double down on regulating asset risk taking. When the crisis comes, prop up asset prices so that indebted institutions don't lose money and bail out creditors. The project aspired to but never quite implemented the lofty macro-prudential goals. Direct the quantity of credit, diagnose and softly deflate bubbles before they grow, and somehow keep in check the consequence rampant moral hazard. The Euro area faced a second crisis and a second question that of sovereign default. Can sovereigns in your currency union default? If not, who pays and how do you stop the attendant temptation to borrow too much? The ECB bought sovereign bonds to do what it takes and to buy breathing room for structural reform. Unfortunately, like St. Thomas' desire for chastity structural reform seems to be always not quite yet. These questions are also still hanging. And all of this stopped moving about four or five years ago. When a crisis is five years in the rearview mirror, the energy to stop to finish reform flags until of course the next crisis comes. Let me just, I'm having a technical difficulty and I want to move on here to regulation in the post-COVID era. So in the post-COVID era, let me offer some observations and these are based on the US scene just because I'm American and I don't follow what's going on in Europe as well as I should. In the COVID crisis, our Federal Reserve intervened quickly and massively in Treasury markets. Once again, a hedge fund overleveraged an arbitrage strategy and there were also a lot of sales from foreign holders. Big banks hobbled by liquidity rules whose defects had been known for years ran out of market-making ability. The Fed unwilling to let prices drop bought massively and to this day, Fed officials are not sure the Treasury market can stand on its own. The Fed went on to save money market funds, prop up the prices of corporate, state and local bonds and then doled out billions of dollars in direct loans. Our government then bailed out the airlines. When did airlines become systemically important and we're on the edge of bailing out stake and local governments and student loans. It is a hard truth that if you want to prevent bankruptcy during a crisis like the COVID crisis, you bail out existing bondholders. That overhang overhangs everyone. So in short, everything that we promised would never happen again happened again. Save bailing out the big banks. Well, I'm sympathetic. You do what you have to do in a crisis. Yet last time at least there was talk and promises that later we would solve the moral hazard and no one seems to be talking about that. Why should anyone keep spare balance sheet capacity or liquidity around to buy stuff in the next crisis knowing the Fed will stop in at the slightest hint of trouble. Why not assume you can always sell assets instantly on the way down in very liquid markets to the Fed if need be if the Fed's always going to provide liquidity. Why should any company or local government not borrow like crazy and why should investors not buy the debt knowing the Fed will bail out and prop up prices if a crisis comes. Are we perpetually in a financial system of private gain, public losses, a central bank put of price and liquidity, and if not, who will put the genie back in the bottle and when. That seems like a good question for central banks. Now let me think even bigger. Let us move on to the risks ahead. Central banks next job is to try to look forward and assess the big risks ahead. What big unforeseen events could cause a financial calamity. How can we brace the financial system against those events. Central banks curiously don't seem to do the kind of contingency planning that military planners do. They should financial euro and covert crisis scream at us don't disparage big unlikely unforeseen events. They happen more than sooner than you think. Now, to get you thinking about these issue I listed here some potential clam financial calamities and keep in mind, each of these will be sparked by a real crisis so there's a real crisis going on while you think about these financial problems. And I focused here on internal problems that I think people are overlooking rather than external asset classes that might blow up but you can imagine those yourself. So what happens when central bank credit risks go belly up. In the end credit risk has to end up with taxpayers but how does that happen without a financial chaos. Sovereign risks. Italy could default. US states and local governments could default US pensions could default. There could be a massive emerging market bond run. Are you ready. Advanced country sovereign risk exists. The US is now at 100% debt to GDP ratio, and we seem to increase that by about a third in every crisis. This cannot go on, especially with unreformed long term finances. What happens in the next crisis when the US needs 5 trillion for bailouts and stimulus 10 trillion to roll over debt and markets say no. What happens if the US faces an interest rate doom loop. What happens if when Congress decides that paying checks to voters is more important than paying debts to Wall Street fat cats and Chinese central bankers and institutes an emergency 20% haircut on US debt. What happens to the financial system if the US cannot borrow to prop up prices bailout stimulate and nobody wants our debt. It can't happen you say. Did you foresee a pandemic. Advanced country debt and currency crisis have happened before don't count on trends to continue with no reason. Now here, let me offer some concrete advice, mostly to say that there is concrete advice to be offered. First, get credit and sovereign risk off central bank balance sheets and onto Treasury balance sheets where in the event of collapse it transfers visibly to taxpayers and where politically accountable authorities acknowledge the credit risk and the implied subsidies. Second, remember Doug Diamond financial crises are always and everywhere caused by problems related to short term debt. All the crisis dynamics of sovereign debt would vanish if governments were financed by long term debt not rolling over short term debt so encourage long term financing. Now you might say long term debt markets don't exist. They're to a liquid will make them exist and make them liquid central banks were invented starting with the Bank of England in 1694 to create a liquid market long term government debt. Don't make matters worse. When Treasuries issue long term debt and central banks buy up that debt issuing overnight reserves they shorten maturity structure. So borrow with fixed rather than floating rates. But mostly, I don't want to advocate these I'm here to point out there are challenges rather than specific answers and just I want to suggest there are answers that we can think about central banks can do to make the financial system more resilient. Now let's think a little bit about the events which could spark financial challenges. What if we have a real pandemic? Let me remind you this was just a fire drill. Plague cholera typhus influenza smallpox they all ravaged Europe in the world. There's a bug out there that kills 20% or more of the people it infects. Terrorists or terroristic regimes could engineer such a bug. It would be a dandy way to hold the world hostage. Are you thinking about the financial calamity this would cause. What if the bug kills half of the world's crops. What if we'll look at my picture we've got plague and famine war. What if China invades Taiwan what if Russia you fill in the gaps, what if the Middle East explodes, which will likely involve nuclear weapons. When sometime this century the credit card machines go dark. Imagine there's a rumor that city has been hacked and the accounts are emptied and everyone goes to the ATMs to get cash now. Political unraveling. What if the US enters a constitutional crisis. This is my call from the US it's closer than you think it only happened once before. What if the EU breaks up. Let me remind you the Brits left others might leave internal conflicts might spike what then for the ECB the euro and the European financial system. A central bank should be wargaming these and more yes each one's unlikely, but one or more of these or something that I haven't thought of is almost sure to happen in the next century. And that makes me to my last great puzzle. In the context of all this misery. Why are the ECB the Bank of England the BIS and the IMF consumed with one and only one risk climate risk. I think this is a dangerous mistake. Now let me offer a disclaimer here. You might infer from my employer that I have unpopular ideas on this. I do not argue that climate change is fake or unimportant. None of my comments reflect any arguments with those scientific facts or the desirability of a strong climate policy. My question to you is whether the ECB other central banks and international institutions should appoint themselves to take on climate policy or other important social environmental and political causes without a clear mandate to do so from the politically accountable leaders. The ECB and others are not just embarking on climate policy general. They're embarking on the enforcement of one particular set of climate policies, policies to force banks and private companies to defund fossil fuel, even while the alternatives are not available at scale, and policies to provide subsidized funding to an ill defined set of green projects. I want to be concrete concrete. So I quote here from executive board member is a bill schnadels recent speech. I don't want to pick on her, but she wrote a really good speech, and she expresses the climate agenda very well, and her speech bears the ECB imprimatur. So her recommendations or her writing of the recommendations of this project. As Prudential Supervisor, we have an obligation to protect the safety and soundness of the banking sector. This includes making sure that banks properly assess the risks from carbon intensive exposures. Let me speak outside out loud, the Unclothed Emperor fact. Climate change does not pose any financial risk at the one five or even 10 year horizon at which one can conceivably assess the risk to bank assets. Risk means variants, unforeseen events. We know exactly where the climate is going in the next five or 10 years. Hurricanes floods, though influenced by climate change are very well modeled for the next five to 10 years. Advanced economies and financial systems are remarkably impervious to whether anyway. The relative demand for fossil fuel for salt turn of energy isn't easy is as easy or hard to forecast as anything else in the economy. Exxon bonds are factually safer financially than Tesla bonds and they're easier to value. The main risk to fossil fuel companies is that regulators will destroy them as the ECB promises to do prompt proposes to do. And that's a risk that regulators themselves control and political risk is a standard part of bond valuation. That banks are risky because of exposure to carbon emitting companies. The carbon emitting company debt is financially risky because of unexpected changes in climate in ways that conventional risk measures don't capture the banks need to be regulated away from that exposure because of risk to the financial system is I'm sorry, nonsense. Next, there's a pervasive regime essentially of shame boycott the fest and sanctions, link the eligibility of securities as collateral to the disclosure regime of the issuing firms. Now you know where disclosure leads all companies that issue debt will be pressured to cut off disparaged investments and make whatever green investments the ECB is blessing these days. And last the ECB should print money directly to fund green projects, reassessing the benchmark allocation of our private asset purchase programs, because in the presence of market failures the market is not achieving efficient outcomes. Now you might say, climate's a crisis. Central banks have to pitch in and help with the cause. They should tell banks to stop lending to the evil fossil fuel companies and they should print money and hand it out to worthy green projects now. But central banks are not allowed to do this and for very good reasons. A central bank in a democracy is not an all purpose do good agency with authority to subsidize what it decides to be worthy and defund what it dislikes and to force banks and companies to do the same. A central bank was leaders don't regularly face voters lives by an iron contract freedom and independence, but stay within your limited and mandated powers. The ECB, in particular, lives by a particularly delineated and limited mandate. The ECB was not set up, was forbidden to decide what industries or regions need subsidizing, which should be scaled back, direct bank investment across Europe, set the price of bonds and print money to subsidize direct lending. Those are intensely political acts only elected representatives can take on our commission acts like that. If I took the words green out of this proposal you, EU member states and EU voters would react with shock and outrage of that proposal. And that's why this movement goes through the convolutions of pretending that defunding fossil fuels and subsidizing green projects, however desirable, has something to do with systemic rich risk which it patently does not. Here's another way to put the observation which is my second set of quotes on the slides because I want you to take a test. There's two ways to interpret this proposal interpretation a we looked even handedly at all the risks in the financial system, the ones listed on the last slide, and the most important financial risk we came up with just happens to be climate. Interpretation be we really want to get involved in climate policy. How can we shoehorn that into our limited mandate or pay attention only to inflation and financial stability. Well, how do you interpret the proposal. I think it's pretty obvious it's the latter, and most importantly, I think it's obvious that the mass majority of people, EU voters, reading the proposal will interpret it as the latter and that's what counts to my point. Eating this perception is the central emission of this speech and everything else I've read on the subject, a concrete description of just how carbon sins are going to be measured. Read the quote carbon and meeting doesn't just mean fossil fuel companies. It means cement manufacturers, aluminum producers, construction, agriculture, transport, everything else that emits carbon. Will the carbon risk assessment and defunding project really extend that far in any sort of honest or qualitative way, quantitative way, or is carbon emitting just a code word to hound the unpopular fossil fuel. In the disclosure and bond buying project, who will decide what is a green project already cost benefit analysis, euros spent per ton of carbon removed for degrees of temperature reduced per euros of 2100 GDP increased is pretty shoddy in this area. By what process will the ECB avoid switchgrass, corn ethanol, high speed trains to nowhere and other past follies. How will it allow politically unpopular projects like nuclear power, carbon capture, natural gas via fracking residential zoning reform or geoengineering ventures, all of which undeniably scientifically lower carbon and global temperatures, or adaptation projects which undeniably scientifically lower its GDP cost. Actually, where is this analysis for the program before embarking I challenge the ECB transparently calculate how many degrees of temperature will this plan lower, and how many euros of global 2100 GDP will it raise. How will the ECB then resist political pressure to subsidize all sorts of boom goggles. If you don't have the set and reveal the technical competence to make this sort of calculation, the project will be perceived as just made up numbers to advance a political cause, and then all the central banks activities will be tainted by that association. This will end badly. Not because the policies are wrong, but because they are intensely political, and they make up mockery of a central banks limited mandates. If this continues the next ECB presidential appointment will all be about climate policy, who gets the subsidized green lending who got defunded, what the next set of causes to be not about interest rates and financial stability. The ECB presidents will become champions for each country's desired subsidies. Watch the US Supreme Court appointments for a preview of where you're headed. Countries and industries that lose out will object. This is just the sort of thing that prompted the Brexit. If the ECB crosses this second Rubicon buying sovereign and corporate debt was the first be ready for more. The math is already pushing redistribution. The US Fed, though it stayed away from climate is rushing to inclusive employment and racial justice goals. There's a lot of problems in the world. Once you start climate policy, and you so obviously break all the rules to do it. How can you resist the climber to defund disclose and subsidize the other causes. How will you resist demands to take up regional development, prop up dying industries, subsidize politicians pet projects and all the other sins that the ECB is explicitly enjoying from committing a central bank that's so bright brazenly breaks its mandates has to lose its independence. It's authority and people's trust in its objectivity and technical competence to fight inflation deflation, regulate banks and stop financial crises. We offer a positive piece of advice because I may have sounded a little bit negative so far. Go ask for an expanded mandate. If the EU explicitly task the ECB to implement carbon policies via defunding bank regulation, subsidized investment, all of my objections vanish. An explicit mandate to address climate and only climate would also help the ECB to defend itself against the coming demand that it move on to every other problem. So let me summarize. The Western world faces a crisis of trust in our institutions. This crisis is fed by a not inaccurate perception. The elites who run our institutions don't know what they're doing. They're politicized, and they are expanding their actions far beyond the authority granted by accountable representatives. Where do you get trust and independence? It has to be earned by evident competence and institutional restraint. Yet where are we summarizing my whole talk? Central banks are not obviously competent to target inflation with interest rates. They're floundering to stop financial crises by any means other than wanton bailouts. They're not beginning to address the obvious huge risks lying ahead, and now they want to determine and implement their own climate change policies. You don't want the agency that delivers drinking water to make its list of socially and environmentally favored businesses and start turning off the water to disfavored companies, nor should central banks provide liquidity period. Now, let's acknowledge there is a popular movement that wants all the institutions of society to jump into the pressing social and political goals of the moment and the heck with the boring legalities. But I hope all of you understand that those constraints are essential for a functioning democratic society and for functioning independent technocratic institutions like the ECB, and incidentally for making durable progress on the very important social and political goals. Central banks should be competent, trusted, narrow, independent, and boring. A good central bank policy review should refocus them on their core narrow mission and let other institutions of society address big political causes as boring as that might be. Thank you. Thank you very much, John. As you said yourself, the ECB is in the middle of a strategy review and hearing what you call out of the box views on these important matters is of course something we embrace very much as we reflect on these issues. And indeed, that's also why Veronica's paper was included because while we embarked on the strategy review also the pandemic came along, and so we have to reflect on that as well. So while I wait for the questions to come in, let me maybe start of the discussion. I was wondering whether we should, whether it's more clarifying questions, should we draw a link between your first challenges on the monetary policy and the challenges that come later, especially three and four. So to kind of rephrase it, if the link between interest rates and inflation is as unclear as you make it. And central banks don't acknowledge that and use this as a key tool to boost inflation. Are there side effects along the way while they do that and especially in what you consider these other challenges to be in the fiscal and financial domain. Please unmute John. There's lots of people who'd like to have a mute button on me. I do think that the monetary and fiscal policy are more intertwined than commonly given credit for and I would encourage thinking about the fiscal limits of monetary policy in the presence of some sort of sovereign debt crisis inflation is going to happen, no matter what central banks do set in the presence of large debts central banks are going to face large big pressure not to raise interest rates precisely to keep debt financing costs low that's how we ran. This is after World War Two financial repression to keep interest rates low and the Fed kept interest rates low to keep interest costs and the government debt down so the big picture is that you should be worrying about sovereign debts a lot more than you and that that is deeply going to be integrated with your ability to fight inflation should have come out now nobody's worried about inflation but you know you need you need that inflation and the inflation package handy if you because nobody was worried about pandemics either. And there I think, and likewise fighting deflation, at least my understanding why we didn't have deflation is a set of fiscal commitments and the ability to run deliberately unbacked fiscal expansions is how you got to fight deflation. So I would, in short, I think the parts that fit well together are that your monetary and inflation fighting review should integrate fiscal and monetary concerns. Thank you. I'm reading a question to you from Klaus Maso who thanks you says excellent talk. You're saying that the Fed put supports a game which ensures private gain that's public expense. So does overtime not shift wealth to the rich away from less wealthy taxpayers or the uninformed retail investors and then maybe undermine aggregate demand to what some academics have called the savings glut of the rich pushing down our star. And certainly transfers wealth to the well connected the financially savvy those who know how to run the regulatory system to people who have the Treasury Secretary's private phone number in their back pocket and know how to say I'm I would say that the interaction between mark to market value of wealth and aggregate demand seems to me rather overstated. You know a lot of the wealth distribution we're seeing now is simply the fact that the same consumption or dividends dream has a higher price. The lower interest and discount rate. So inequality of wealth does not mean greater inequality of wealth when asset prices rise, because interest rates decline does not mean greater inequality of lifetime consumption. Let me try that again interest rates go down. That means prices of the same consumption stream go up. So if and also asset prices go up. So the same dividends the same consumption stream now has a larger price. So in a wealth a lot of wealth inequality is driven by the fact that asset prices have gone up as interest rates have gone down and that does not imply a greater possibility for greater lifetime consumption. They do better the second time I thought the first time was awfully confused. I'll leave that to you. Michele Lenzer is wondering whether, at least in the long run, climate policy may affect inflation and that sense should not be also in the central banks domain. So again, I like the way it only happened late last night I stated it. If you think about does climate policy, does climate somehow affect inflation and therefore do we have an excuse to meddle around with climate, you can come up with a story. If you think about what are the prime causes of inflation, and where on that list would climate policy come if we didn't care independently about climate policy, I got to put a way down on the list so yeah you can come up with some stories. In the end inflation is about the value of government debt that people want to hold that are not. And actually climate policy can make that worse. So we got to face the fact that in climate you're fighting an externality with things that are economically inefficient. economically burned cheap fossil fuels is more efficient. So you're you're choosing to reduce productivity in order to do good for the environment. So climate policy could actually be inflationary but primarily you know paper stuff with taxes you don't get inflation inflation is really in in a big sense uncorrelated climate change. And then the last question, and that visiting your concern is what you make of the text deductibility of interest, especially on short term that with that be a solution and maybe I can add sort of a more general take on this. I mean, I think you laid out many uncertainties that it seems as this one certainty we can all agree on which is that the world would will end up following this pandemic with more debt. So, leaving on a more positive note how to what to do about that. Thank you so much Annette, because I touched briefly on something that matters to me a lot that are the central problem of financial crisis is that our financial system is loaded is it's the liabilities not the assets. Tesla Google Facebook are far more risky assets than a portfolio of mortgage backed securities and bonds. Why do we worry about the banks because the banks are financed by short term debt. So getting rid of short term debt in the system allows a financial system where we don't have to try to regulate assets. Now how do we get rid of it number one stop subsidizing it. Thank you. The first step always is where are we subsidizing it we're subsidizing debt and short subsidizing debt by the tax deductibility. We're subsidizing short term debt because it's privileged as an asset in a lot of regulation. So, let's stop subsidizing debt. I've been for actually attacks. If you finance with short term debt, you got to pay one cent per dollar as a as a as a, let's call it a financial externality tax. I think there's simple measures to get to try to squeeze debt out of the system and to move to an equity financed a long term debt financed system. The problem is a lot of the debt that's coming out of this crisis is sovereign debt, not private debt. And I think we have all gotten a, you know, we're looking for the we're fighting the last war, when the houses go down again. And everyone assumes that sovereign debt is holy and will never fail. Let me remind you that since I think it's like 1340 when King Edward the third stiff the peruzzi sovereign debt has always been the more risky the two. So I wouldn't assume that that's going to go on for many things john. Thank you very much everyone for listening. So thank you john. Thank you Veronica. I wish you a good day. And I wanted to just end by thanking the organizing committee. Carlo Autavilla, Wolfgang Lemke, Roberto Motto and Oreste Tristani at the ECB for putting this together together with Anna Maria Lupo, who was probably the most important by providing the admin and tech support and was also on this call. So normally we have a round of applause, but I just leave it virtually. And with that, I wish you all the best and see you at one of our next events. Thank you. Thank you.