 Good afternoon, everyone, and welcome to Carnegie. My name is Bill Burns. I'm the president of the Carnegie Endowment for International Peace. One of the expressions that you often hear inside the Beltway these days is running through the tape, continuing to work hard through the transition and on to inauguration day. With three days left in the Obama administration, it is clear that our guest today is one of those lucky souls running through the tape. And we're very fortunate that he's graciously taken a brief pause just before the finish line to share some valedictory thoughts on the difficult economic choices facing our country at home and abroad. Undersecretary Sheets has been in the thick of international economic policy for more than two decades at the International Monetary Fund, at the Federal Reserve, at Citigroup, and most recently at Treasury. As the Treasury Department's chief diplomat, he's played a key role in ongoing efforts to turn the global economy around after the 2008 financial crisis, to enhance cooperation between the world's two biggest economies, to reform the quota system at the IMF, to level the playing field for American companies, and to support economic recovery in Greece, Ukraine, and beyond. The Obama administration's global engagement has clearly paid significant dividends here at home. Eight years after the worst economic crisis since the Great Depression, the American economy today is still the biggest, most resilient, and most innovative in the world. For all the progress, however, enormous challenges loom on the horizon, as all of you know, as well as I do. The shift of economic dynamism from West to East, growing resistance to globalization and free trade, and the powerful forces of technology that are upending how we live and how we work. Delivering on Andrew Carnegie's commitment to peace requires tackling these challenges head on, because economic challenges often lie at the core of insecurity and instability. This is why we're bringing together experts from across our global network and leaders in the public and private sectors to help harness the promise of globalization while mitigating its dangers and dislocations, to refine the tools of economic statecraft, and to tighten the connection between economics and national security strategy making. This is exactly why we're delighted to host today's conversation and to welcome Nathan Sheets back to Carnegie. So please join me in offering Nathan a very warm welcome. Thanks, thank you. Thank you Ambassador Burns for that kind introduction and for inviting me today to discuss Treasury's key priorities and achievements on international economic policy issues. The Office of International Affairs, known as IA at the U.S. Treasury, represents the U.S. government on matters of international economic policy. Carrying forward a legacy of decades of U.S. leadership in this area, the office seeks first and foremost to support a growing and vibrant U.S. economy. Our economy benefits from and also depends critically on a supportive international economic and financial environment. And this is equally true for our partners around the world. This shared reality provides the foundation for our collaboration in multilateral settings, including in the G20 and IF5, and for our bilateral economic relationships. Fundamentally, we aim to foster strong, sustainable, balanced, and inclusive global growth. This requires promoting economic resilience, openness, and a level global playing field for our workers and firms. Resilience means bolstering the sustainability of growth, the strength of key institutions, and the stability of global financial markets in order to reduce the frequency of crises while limiting their intensity if they do occur. Openness means that goods and capital are free to flow across borders to their most productive uses. And a level playing field allows U.S. companies and workers to compete on equal footing and helps mitigate potentially destabilizing imbalances. Robust global economic performance requires that all countries play by a common set of rules, including trade and exchange rate policies, financial regulatory standards, and practices regarding the provision of export credits. In addition, our work plays an important role in advancing broader U.S. foreign policy objectives, whether leading efforts in the international financial institutions to respond to emergent crises, such as the Ebola outbreak and refugee flows, supporting economic stability in key countries such as Ukraine and Iraq, or contributing to the design of major sanctions programs, we interact closely with partners across the government to achieve foreign policy interests. We function on several related tracks to achieve our policy objectives. First, our work is based on extensive monitoring and analysis of the global economy. Our staffing levels are admittedly lean, but we seek to provide expertise and timely counsel on global economic developments and to identify potential issues before they hit the headlines. This work also provides analytical support for senior treasury officials. Having personally benefited from this over the past few years, I am deeply impressed by IA's strategic insight and ability to deliver rigorous analysis in real time. Second, we share our assessments of key economic and financial developments broadly within the U.S. government and seek to identify relevant policy options and promote sound decisions. Third, we work bilaterally with international partners in finance ministries central banks and financial regulatory agencies to manage economic relationships and work towards shared goals with the objective of fostering U.S. economic and financial interests. Fourth, we engage multilaterally to advance U.S. perspectives at forums such as the G7 and G20 and through institutions like the IMF and the multilateral development banks. We also play a leadership role in keeping these organizations effective, relevant to the global economy and reflective of U.S. values and interests. In the remainder of my remarks, I will discuss some specific examples of our work over the past three years that highlight the progress we have made. My comments will focus on our engagement with counterparts in Europe, China, and Ukraine, as well as our efforts in the G20. With this discussion, it's hardly exhaustive. I could just as easily focus on our engagement with Latin America and India. Our work on correspondent banking services for emerging markets and developing countries or the progress we made in modernizing the multilateral development banks. Having worked in the official sector through the global financial crisis and in the years following, I understand the immense importance of tracking risks to financial stability. Time and again, IA has been the U.S. government's first responder when it comes to evaluating the economic implications of financial marketing geopolitical events. One of my vivid memories from my time at Treasury was an all-night watch in my office as the results of the Brexit referendum came in. We closely monitored vote returns and financial market reactions, sending regular updates to Secretary Lew and to White House colleagues advising the president. I also checked in repeatedly with G7 colleagues over the course of the night, including my counterparts in the UK and other European capitals and with key emerging markets over the next 24 hours. Because of our close working relationships with international counterparts, we were able to rapidly gather information and synthesize reactions as the outcome of the vote became clear. This coordination culminated in a public G7 statement early the next morning, which helped calm global markets. Over a longer horizon, perhaps no issue illustrates our multi-pronged engagement with international counterparts more clearly than our work on the Greek debt crisis. The Treasury team has closely followed political and economic developments in Greece through its three bailout programs, and we continue to follow the country's ongoing negotiations with its creditors. Throughout this period, we remain in close touch with the IMF, the ECB, and European colleagues, as well as with Greek officials, urging the parties to keep moving and working toward a resolution. The urgent, fast-moving nature of these situations means that IA staff often work under relentless time pressures and must leverage long, cultivated expertise as well as key relationships to construct as full a narrative as possible. This work allows U.S. officials to provide real-time leadership as global economic events unfold. The G20 is another essential channel of U.S. economic influence. While there's been broad agreement amongst G20 countries that the performance of the global economy is falling short of our reasonable expectations, countries have differing views as to what specific policies can most effectively address the challenges that we face. These challenges include high unemployment in too many countries, lagging middle-class income growth, and sluggish increases in productivity. In response, we have consistently advocated that countries like Germany, Korea, and Japan with large amounts of excess saving and current account surpluses should take steps to support stronger national and global demand. And we've called on China to use consumption-friendly fiscal stimulus if its growth slows more than expected. Through the G20, we've worked with counterparts to build consensus on the need for collective action. For example, in advance of the G20 meetings in Shanghai in February 2016, global markets were jittery due to concerns about China's economic transition. The prospects for global growth and concerns about volatility in foreign exchange markets. We worked hard in advance of that meeting with key partners such as China and Germany to put together a package of measures that demonstrated that the G20 was united in working toward an appropriate response. To this end, I personally logged some extended travel time flying to China a week before the Shanghai meetings and helped nail down key aspects of that package. In the communique that followed the meeting, G20 finance ministers and central bank governors for the first time committed to use all policy tools, fiscal, monetary, and structural, to energize the global economy. This is in contrast to the fiscal austerity that many policy makers had advocated in earlier years. G20 leaders subsequently endorsed these policy commitments during their summit in Hongzhou in September. As a result, today, more attention is being paid to whether countries, fiscal, and monetary stances are supportive of strong and balanced growth. Finally, G20 countries have long agreed on the benefits of economic and financial openness and the importance of fighting protectionism in all its forms. Expanding trade and investment relationships have been a key driver of U.S. and global growth through the post-war era. Even so, there is also agreement in the G20 that we must make the case for such policies more convincingly and take steps to ensure that the resulting benefits are broadly shared. This underscores the importance of efforts to strengthen our educational systems, build infrastructure, and expand access to financial services. With the critical objective of fostering a level global playing field, we have intensively monitored the currency practices of our trading partners. The United States has long believed that countries should not engage in unfair currency practices to gain a competitive advantage in their trading relationships. For this end, we've won important commitments in the G7 and the G20. G7 countries committed to orient fiscal and monetary policies toward domestic objectives and to not target exchange rates. G20 countries, which account for 85% of the global economy, committed to refrain from engaging in competitive devaluation and to not target their exchange rates for competitive purposes. And in Shanghai last year, after delicate negotiations, members of the G20 also agreed to consult closely on exchange markets. An important component of G7 communicates in the past were never before included as a G20 commitment. Treasury also has consistently urged the IMF to strengthen the exchange rate analysis in its bilateral and multilateral reports. These outcomes drew on our careful analysis of foreign exchange markets, which are detailed in our biannual report to Congress. In 2015, Congress substantially strengthened Treasury's mandate to monitor and address unfair currency practices. The Trade Facilitation and Trade Enforcement Act sets out a data-driven framework to assess whether major U.S. trading partners may be pursuing unfair exchange rate policies. Treasury produced its first report under the Act in April 2016. Outlining robust and transparent criteria to help assess unfair currency practices. We also created for the first time a monitoring list of major trading partners that merit close attention based on the criteria specified in the Act. In the latest report, six major trading partners in the United States were included on the monitoring list. China, Germany, Japan, Korea, Switzerland, and Taiwan. We've also used the G20 as a platform to urge emerging market economies to take on expanded roles and responsibilities in the international system. One example is our collaborative effort to broaden membership in the Paris Club, the premier forum for official sovereign debt restructuring. Given that many emerging market countries have become important international creditors, we've urged them to move beyond their traditional ad hoc participation in the Paris Club and to become full members. These efforts have achieved initial successes with Korea and Brazil joining in the past year. In addition, China and South Africa have increased their engagement and are considering the possibility of full membership. Let me now speak specifically about our engagement with China. As the world's second largest economy with banking system assets exceeding $30 trillion, what happens in China and between the United States and China impacts the rest of the world. We have made concerted efforts to build trust and a durable working relationship with our Chinese counterparts. The strategic and economic dialogue or SNED has provided a mechanism for building this relationship and is a platform to encourage macroeconomic, financial trade, and investment reforms. Efforts in the SNED, along with our other engagements have achieved results. China is taking steps to rebalance its economy away from the exports and investment toward a greater reliance on household consumption to fuel growth and to embrace greater transparency and predictability in setting policies. China is also taking steps to reform its exchange rate regime as the ultimate objective of these efforts. The exchange rate should be free to move in both directions, in line with evolving economic fundamentals. In numerous discussions with my Chinese counterparts, I've emphasized the importance of improving the transparency and the scope of economic and financial data. China is now releasing greater detail on foreign exchange reserves as part of the IMF's Special Data Dissemination Standard or SDDS. In September of last year, China for the first time was included in the IMF's currency composition of official foreign exchange reserves or COFR database. China also committed in our last SNED to publish a comprehensive monthly indicator of service sector activity and will work to publish quarterly data. Through the SNED, we also secured important commitments from China to undertake further steps to reduce its excess steel capacity. This commitment was recently strengthened when President Obama and Xi underscored the urgency of addressing excess capacity in industrial sectors, including by launching the Global Forum on Excess Steel Capacity. Our engagement has also encouraged China to assume greater responsibility within the existing international financial institutions. Notably, with the R&B now included in the IMF's SDR basket, China is more invested in and has greater obligations to the international system. In addition, Chinese authorities agreed last month to double their contributions to the World Bank's fund for the poorest countries. Throughout our bilateral engagement, we have consistently pressed for a level playing field for US firms in China and an improved business environment. We have opposed discriminatory industrial policies sought to improve the environment for intellectual property and advocated for fair competition and innovation practices. However, the Chinese authorities have much work to do before these goals are fully realized. If China were to take the steps necessary to conclude a high standard bilateral investment treaty with the United States, it would be an important milestone in this area, which would not only further economic reforms in China but also strengthen our economic integration and partnership. Our work with Ukraine over the past few years is an example of a different type of economic engagement, a focused response to geopolitical events. In this effort, we have interacted intensively within the US government with bilateral partners and multilaterally to support Ukraine and respond vigorously to Russia's annexation of Crimea and its support for separatists in Eastern Ukraine. By the middle of 2014 Ukraine faced a deep economic crisis which reflected Russia's disruptive actions as well as the sustained failings of Ukraine's prior governments. In response, the United States worked closely with other official creditors to establish a $40 billion international assistance package anchored around a four-year IMF program. US bilateral assistance to Ukraine has come mainly through $3 billion sovereign loan guarantees. This international financial assistance has been conditioned on Ukraine making concrete progress on much needed economic reform measures. In response, the Ukrainian authorities have put in place important fiscal and banking sector reforms and have taken steps to fight corruption and stabilize the economy. US Treasury has provided over 30 technical advisors to Ukrainian government institutions to support these reform efforts. Treasury's largest technical assistance program globally. Encouraging science are now evident with Ukraine's economy emerging from a deep recession and returning to positive growth. At the same time, Russia's aggressive actions demanded a response. A core element of the resulting international effort which included the EU, the G7 and other like-minded partners was the implementation of financial sanctions designed to impose costs on Russia and provide leverage for diplomatic engagement with Moscow. Tasked with developing a coordinated response with our allies, we and IA were closely with Treasury's experts on sanctions to examine the Russian economy and its significant global linkages. Our objective was to identify areas where Russia relied on European and US technologies and financing and where sanctions would have the greatest impact on the Russian economy while minimizing spillover effects on us and our allies. This was a challenge that we had never faced on a comparable scale. The resulting sanctions constrained the ability of large Russian banks and several major energy firms to tap international financial markets for new financing. The sanctions also inhibited Russia's access to western technology and expertise in oil exploration and production and targeted nearly all of Russia's defense industry. While Russia's subsequent economic decline was of course amplified greatly by the dramatic drop in oil prices, our targeted sanctions have worked as intended. They have imposed costs on key Russian firms and the economy more generally with only limited macroeconomic effects on the United States and European economies. Our close coordination with partners in Europe and the G7 who have implemented similar measures has bolstered the resulting effects and underscored to Russia that its actions in Ukraine have consequences. I came to my job at Treasury with a deep appreciation for the legacy of US international economic leadership and I believe that the Office of Affairs in recent years has been an effective custodian of that legacy, working to advance principled, rigorous and data-driven policymaking. We've made important progress in the areas that I've discussed today and in many others. Coming out of the global financial crisis, we work to raise standards globally to protect financial stability while maintaining a level playing field for US firms. We completed quarter reform and continue to push for governance reforms at the IMF so that the institution reflects the global economy of today. Similarly, at the World Bank we've worked to realign shareholding while introducing new mechanisms to help the bank better deploy its resources and to reach those in need. We've expanded our work providing technical assistance, determined to foster a stable and inclusive financial system and strong, sustainable growth. We've deepened our working relationships with G7 and other partners around the world and opened the doors to new counterparts. And we continued the basic yet critical work of monitoring the global economy for risks in assessing opportunities while maintaining a rigorous analytical foundation in our engagements. To close let me emphasize the value of US leadership in all of the areas that I've discussed. Our position in international economic affairs is a reflection of the size of the American economy and the preeminent role of our financial markets but that is only part of the story. Other core building blocks of US leadership include the quality of our ideas, the breadth and intensity of our engagement and our dedication to an open, resilient and inclusive global economy. That is why the world has looked to us for leadership through the post-war period and why the world continues to look to us for leadership today. A phenomenon I have seen again and again. This carefully cultivated leadership role provides us a unique capacity to protect and advance US interests as we continue to pursue the enduring task of achieving a stable, robust and integrated international environment that is conducive to strong performance in the United States. Thank you. Nathan, thank you very much for what was not surprisingly a really thoughtful set of remarks. Thanks so much for your service at Treasury. Thanks not least for your patience and putting up with more economically challenged counterparts like me in meetings at the White House and elsewhere. I'll start today's conversation with just a couple of questions and then open it up to wider discussion but one of the things that you rightly emphasize most in your remarks is the challenge of inclusive global economic growth and I think certainly that phenomenon of political frustration caused by growth that was not seem to be inclusive by lots of American citizens was sharply apparent in our own recent elections and certainly helped animate Brexit and you see it across a lot of different societies in the world so looking backwards of 2008 and all your experiences since then but there are things that we could have done more of done differently to help encourage or at least recognize the challenge of inclusive economic growth. So when I look at the global economy it is clear that the global economy over the last three or four or five years has performed in an okay fashion but has fallen well short of our collective goal our collective ambition of strong, sustainable, balanced and inclusive growth. Through that period we have vigorously advocated the importance of countries using all available tools all the tools they have at their disposal to achieve strong economic outcomes including outcomes that are consistent with strong demand. I'd say in retrospect we could go country by country and I'd say that in a number of countries there would have been scope for more vigorous use particularly of fiscal tools at times I think we've been in a place where monetary policy and a number of countries across the world has been vigorously deployed but fiscal policy hasn't and I'd say that that would be if we had it to do over again I think that that's something that a lot of countries would do differently. I would also say that in a number of countries structural reforms could have been pursued hand in hand with that fiscal stimulus and that would have resulted in better outcomes. Now I'd say in the United States our performance has been better than most of the other advanced economies in the G20 we've had solid growth we've created we've created millions of jobs that our economy is clearly on a solid trajectory but nevertheless I think that one clear message that I heard from the leaders in their meeting in Hongzhou was wherever our economies are today however they're performing today let's say in the U.S. we're relatively strong more needs to be done to achieve a subjective and strong sustainable balance and particularly particularly inclusive growth how do we how do we better share the benefits of a growing economy across our society and I think that part of that we know the answer to it's better educational systems it's better more accessible infrastructure for the vast majority of our publics it's increased access to financial service and banking and increased financial inclusion so there are some steps that we can take individually as individual countries and collectively as a G20 to achieve that outcome so even then that there's a gap there's more work that needs to be done more reflection on where we are today and how to achieve this desired objective of more inclusive and stronger growth thanks just as you rightly outlined in your remarks at the core of the evolution of the global economy as far as you can see into the 21st century is the central relationship between the China today Xi Jinping spoke in Davos the unlikely staged position as the champion of an open global economic system and so there are lots of questions on the landscape but can you talk a little bit more about what you see to be the biggest economic challenges for China as it makes a very complicated transition to a system or a kind of growth that's based on assumption and services and what as you look out ahead as you think about what to advise your successor and what do you see to the biggest potential problems in US-China economic relations so China's economy is now very much at a point of transition at a point of rebalancing and I would say that that rebalancing is occurring in a number of different dimensions that as you indicate there's rebalancing occurring from export-led growth into domestic demand-led growth and I think we've seen some progress there there also then needs to be some rebalancing from investment where in China the share of investment in GDP is extraordinarily high relative to other countries toward consumption where consumption share in China is fairly low so you need to see more empowerment of the Chinese consumer there's rebalancing that needs to occur from public firms, SOEs and state control of the economy into more private sector-led growth correlated with that it's also an ongoing rebalancing where we've seen some progress from manufacturing the services and we could probably spend time sketch out several more dimensions in which this rebalancing is occurring so this is a very very dynamic period and I would also say one that's a challenging period for economic management in China consistent with that they're facing significant vulnerabilities meaningful non-performing loans in the banking system by international standards particularly for an emerging market economy corporate leverage is very high the shadow banking system is large and it's not clear that all of the risks in the shadow banking sector are fully appreciated there are no doubt risks in the property sector and state and local governments so there's there's a lot of challenge that China faces now how does all this come together well my sense is that in this challenging period the track record for China over the last 10 or 15 years is strong so their track record in managing their economy and managing through problems is favorable the second point is also very important is that Chinese authorities have significant resources financial and other tools to be able to manage through so I would be hopeful China is a further slowing gradual slowing of growth and not in a rough shift in the growth process there but there are significant challenges and then I think that brings into you know when I look at the next several years what I think the biggest challenge is going to be it's China translating its rhetoric including the speech today into actual policies that correspond to the openness that President Xi was was articulating at this stage it's imperative that China take additional steps to open up its economy and to improve and strengthen and make more transparent its business climate now to this end we over the last few years have been negotiating a bilateral investment treaty and we made a lot of progress towards finishing that but it wasn't quite it's not quite finished and further progress on that bilateral investment treaty I think would be a very positive step in helping to ensure that the business climate is consistent and that China is playing by the same rules as others in the system thanks very much last question for me and then I'll open it up I promise and this is on country in a different part of the world a smaller economy but in many ways a pivotal country and that's Ukraine that you addressed in your remarks you know Ukraine faces lots of different pressures today not all of them economic, political and security as well especially the big aggressive maybe in Russia how optimistic are you Vice President I know was just in view for over the last couple of days a lot of question marks about what the nature of the US-Ukraine relationship is going to be going forward but how optimistic are you that the reform is going to succeed and Ukraine can become you know the kind of healthy economic and political system that's so important I think so over the last few years we've seen the Ukrainian government tackle deep-seated challenges and difficulties that had plagued the economy literally for decades the trajectory of policy is very positive and very favorable however as you say there's still a lot of work to be done and it's going to be imperative that in the years ahead the Ukrainian authorities continue to implement reforms and take steps to make their economy more internationally competitive, more efficient more free of corruption to make the banking system stronger and so forth now as they do continue those policies and I'm hopeful I'm hopeful that they will I think that the determination of the international community to provide support is very very significant so if they continue to pursue these policies if they avoid reform fatigue I think these policies will deliver stronger economic outcomes and the international community is I think will be there to be supportive and help support and reinforce Ukraine's efforts through this period of transition so I'm hopeful but there's also still a lot of work to be done thanks why don't I open it up now and all I would ask is that if you'd wait for the microphone after I call on you please identify yourself and remember to end with a question mark but Anders, please my name is Anders Ostlund from the Atlantic Council thank you very much for a very nice overview and particularly for your warm words about Ukraine you end with an emphasis on the importance of continued care naturally and we all know that this is now challenged by the new administration and I want to talk specifically on three organizations where you think that this challenge is the greatest or the smallest the IMF, the G20 and the G7 thank you so let me frame my response with the broad thought that we have engaged internationally and engaged in these organizations in the U.S. after a very careful and hard headed analysis of the pros and cons and the potential benefits and I think as we think about what we can achieve through these multilateral mechanisms of engagement the benefits from them are very very significant and I think that that's clear to me and I think that's likely to be clear to others going forward and certainly in both Republican and Democratic administrations through the post-war era they've been vigorous in the bank and the fund and in various multilateral organizations now let me also say that I think these three groups that you've highlighted the IMF, the G20 and the G7 are nicely complementary and I think it's important for the United States to remain active in all three of these so the strength of the G20 is it's broad and covers 85% of the global economy it has a very nice mix of both advanced economies and emerging market economies and as you move in the G20 there is a natural credibility associated with that the G7 is a smaller grouping of advanced economies given the fact that it is a more homogeneous grouping there are certain policies and actions that has been the natural mechanism to use with the work that's been done particularly on sanctions against Russians supporting Ukraine being a good example of where the G7 has been a very very powerful instrument and then the case for the IMF I think is compelling the IMF brings huge quantities of human capital technical assistance of financial resources to the table it's central to ensuring a strong global economy it leverages U.S. resources as do the other IMDBs I think all three of these groups are central to the existing architecture and our tools that will be continued to be deployed by the United States thanks yes ma'am thank you I'm Katarina Sokou with Greek Daily Kathimerini you mentioned Greece as an example of how the international affairs is critical in its role as a first responder and I'm wondering what you how would you rate your cooperation and engagement with the IMF and the Greek government in dealing with the Greek crisis and whether you still think that the IMF is critical to the Greek program and important that it stays on board and whether you think that the debt easing measures currently being offered to Greece are enough because we all know that you've been pressing for a sustainable debt for Greece thank you thank you that is a very broad and challenging set of questions and I probably won't cover the full waterfront but let me share a few thoughts so over the last three years we have been vigorously engaged with the key interlocutors and key parties in Europe on issues related to the situation in Greece as you indicate vigorously interacted with the Greek government encouraging the Greek government to continue to move forward on economic reforms which are necessary to facilitate an agreement with the other partners but are also necessary ultimately to lead to a more robust Greek economy and faster and faster growth there we've also interacted vigorously with Greece's European partners underscoring as you indicated the need for debt relief that as Greece puts in place economic policies that will lead to a sustainable outcome for the European partners to take complementary measures to reduce the debt burden and allow the economy to be on a sustainable path is something that's credible it's necessary and something that we felt is important and then finally we've interacted vigorously with the IMF and I think it's important with the IMF to keep in mind that in past years the IMF's role was providing resources to help the transition but also to provide surveillance and expertise and I think that where the Greek situation is now surveillance and expertise really are at the core of what the fund is doing there and I think that is an indispensable contribution that the IMF can play to help me resolve the situation in Greece and ensure its sustainability over the medium term the other point that I feel is very important is that as we've interacted with these various parties and these various interlocutors we've been very careful to act in the role of advisor of counselor that we ourselves, the United States is not a party to these negotiations but we, given our investment in a strong global economy and a strong European economy we've shared our views on how the various parties could reach agreement but we ourselves haven't been part of that negotiation process. It's primarily a European issue. We have time for just two last questions and maybe we'll ask them together and then you can respond. Let me give equal opportunity this side of the room. Yes, ma'am. Sophie Edwards from DevEx. Question about the World Bank and the US leadership there. We've talked quite a lot about the IMF so it would be great to hear your thoughts going forward on the World Bank. Yes, Stanley, please. My question is to bring you back to China and Asia with regard to the AIIB. Could you give Treasury's initial assessment of how it's been working? I've heard some very positive assessments but none of them were from Americans much less from Treasury so I'm curious what your assessment is but more importantly looking forward, can you envision a set of circumstances and I'm not assuming the answer is necessarily yes but can you envision a set of circumstances that Treasury would recommend to a future administration, not necessarily the next one that the US join the bank. What would the bank have to do to make it interesting to the US? So let me state up front I'll respond to the first part of your question and evade the second part of your question. So we're explicit. Good to be open about it. It is, absolutely. So when the AIIB was first articulated as an idea, we at Treasury were very clear that one, there was an infrastructure need in Asia and two that if the AIIB operated in a way that was consistent with international best practices for multilateral development banks and development bank lending that we thought that the AIIB could be helpful in supporting and addressing that infrastructure in Asia. My feeling about where we are with the AIIB so far is that the underlying documents, the articles of agreement that have been put forward seem reasonable and quite consistent with those that are in place for other multilateral development banks. So those seem to be reasonable. Now the question is what about the track record? We are watching carefully to see how the AIIB operates and is it operating in a way that's consistent with these international best practices? Should say parenthetically in our S&ED and other negotiations, the Chinese have committed to us that the AIIB would operate consistent with those practices. To date the lion's share of the lending that the AIIB has done has either been co-financing with other MDBs or on projects that were originally developed by the other MDBs and my read of those projects is again they seem fairly reasonable and constructive. So the bottom line in my mind is that we've seen some encouraging signs but it's going to be important for there to be an established track record over the course of years and not just months of strong performance before we're able to evaluate the AIIB with any confidence. On the World Bank the World Bank plays an equally vital and equally crucial role in the global economy as a provider of knowledge and it stands alongside the World Bank with frankly a broader and more expansive mandate which it pursues very effectively and also very importantly the World Bank is at the forefront of our efforts to address global poverty and provide resources to the poorest to the poorest countries consistent with this we've recently completed a replenishment of IDA which has gone very smoothly and has been successful one particularly important innovation there is the World Bank is now using IDA's balance sheet more effectively and leveraging it in a very limited discipline way to significantly increase the resources that will be available for development bank lending this is something we strongly support with these institutions given the obvious constraints that we face in the United States and globally in financing multilateral development banks it is imperative that these institutions use the resources they have and as effective manner as possible and we're seeing those kinds of reforms at the World Bank so the World Bank is a crucial partner along with the IMF Ladies and gentlemen, thanks so much for coming this afternoon please join me in thanking Nathan Sheetz