 Well, thank you for joining us. I think, you know, one of the things that Dr. Hamry, the president of CSIS, has talked about is how so many of the issues today are horizontal, but governments are vertical. And I think SHERPAs, and one of our goals in convening them, have probably a better perspective, both of the difficulties in organizing the U.S. government to address things, but also in terms of working together to confront multilateral issues. And we're really pleased to have here at this first SHERPA summit some of those that have been here at some of the most critical junctures for the G system and showed real leadership through that process. And I've had the pleasure of working with, I guess, three of the four, and one I know very well from reputation from this great work under Secretary Reuben and also someone that we hear a lot about these days, Secretary Summers, who has immersed deeply in this global crisis. So I'd like to briefly introduce them and ask them to make brief remarks from the table, and then we will turn to the crowd again for your questions on these various issues. Gary Edson, I've had the pleasure of working with in different capacities. And I think as I've talked to many SHERPAs, many have commented on both this kind of leadership and his vision and creativity in addressing many issues. And he was there at a very critical juncture as the G8 confronted the attacks of 9-11 that transformed them in many ways and brought a new focus on security and other issues. But I guess as a Renaissance man, Gary also broke new ground in terms of PEPFAR, in terms of some of the global development issues that were launched during his time at SHERPA at the G8. So it's a pleasure to have him here with us today and also to tap into his expertise as a entrepreneur and a business leader as well. So we very much welcome you today. Second, to his left we have Jeff Schaefer, who was Undersecretary of the Treasury for International. Again, as I mentioned, served under some legendary officials at some very critical times as we struggled to adapt to the wake of the Cold War, the Asian financial crisis, and the colonels. He said that the G820 hadn't quite launched while he was there, but the inklings of what would become the G20. He also has phenomenal business experience, including working at Citibank, so has the added perspective of seeing the global financial crisis from the front lines, which I think will be invaluable in this discussion. Next, we have Mike Dan Price, who is in many ways the father of the G20 Leader Summits, launching them in the wake of the global financial crisis, moving forward with this bold reform plan and also having been a leader in trade and both at USTR, where I'm pleased to see that we're joined by Ambassador Carla Hills, who contributed both Dan and Gary in a sense from her team at USTR and kind of a legendary period for US trade. So we're very honored to have Dan here and to hear his perspective. And last but not least, Ambassador Al Larson, who I've also had the great pleasure of working with. I believe Al may have been the only ambassador that, or the only undersecretary that was retained between the Clinton administration and the Bush administration, which I believe shows how indispensable he was to these processes. And as we were talking today at lunch, we were talking about Sherpas and kind of what that means. And he actually said he started out as what was known as a yak, supporting a Sherpa in the Carter administration. So he's seen this from very many different perspectives in how it's evolved and has been a real leader, including in many development initiatives, including the Millennium Challenge Corporation and taking a new approach. And it's seen it some of the biggest issues that the State Department deals with, including climate change. So with that, I'd like to turn it over to Gary and for brief comments from all of our Sherpas. Ask them to focus on, again, what they think is the most important issues facing us as we face the Pittsburgh Summit and then also based on their experience where they think the GE system and international coordination needs to go from here. So thank you very much. Thank you, Steve. I'm really pleased that you decided to have the ambassador's panel go first because it proves what I've been claiming for a long time, which is that at least in some countries, being Sherpa is considered an honor. Which reminds me of a very vivid recollection of a National Security Council meeting in the White House Situation Room and a G8 issue arose and somebody in passing made reference to, quote, our Sherpa, at which point, Secretary of Defense Rumsfeld, leaned back, looked at the ceiling and asked of no one in particular, what the hell's a Sherpa? Until then, I don't think I truly appreciated the meaning of the word mortified. But I believe that shortly before I lost consciousness, I replied, beats me. Of course, the real honor of being a Sherpa was serving alongside people like Al Larson. We didn't have the honor, but one day we might. And sitting across the table from folks like Ambassador Castellaneta and Fujisaki and being succeeded, eclipsed by people like Dan Price and Mike Froman. As Ambassador Castellaneta mentioned, and as folks have made passing reference to, the G8 has been shaped by crises. It was born, in effect, out of the oil shocks and economic crises of the 1970s. And is now being reshaped, potentially erased, by the current economic crisis. In between, as Steve mentioned, of course, came 9-11. As President Bush said at the time, in great tragedy, there's often great opportunity. I like to believe that we, and I mean that collectively, the G8 collectively, took that opportunity and used it to remake the G8 for the better. First, we made the outcomes, or tried to make the outcomes more action-oriented, moving the G8 from conversation to commitment and from posturing to promise-making. Of course, promise-keeping became a challenge then, and still is, but the shift to action, I think, was significant. Second, we expanded the agenda beyond the traditional economic and foreign policy issues to directly address key security, national security concerns, even some very tough and technical ones. I ought to add, in light of Ambassador Fujisaki's new role, that in 2003, we expanded the APEC agenda to specifically include security concerns as well. Third, recognizing in the wake of 9-11 the link between security and development, that failed states and impoverished nations became prey to internal conflict, as well as external terror. We expanded the agenda to address key global development issues from famine relief and food security, HIV and malaria, and Al can speak more to that. And finally, as a consequence of all these changes, we expanded the circle of engagement to the point, the question about the G8 being a rich man's club. We expanded the circle of engagement to encompass, through so-called outreach, not only the poorest developing nations, but also the emerging powers. In that course of events, I view 2002 and 2003 as watershed years, the Canadian-hosted Kananaskis Summit in 2002, and now we're in 2010, approaching the 10 years after that. The Kananaskis Summit produced significant action plans on transportation security and nuclear proliferation. By the way, you mentioned Ambassador Hills taking a leaf from her book. There is no action unless you stipulate who does what by when. Madam Ambassador, you set the bar high. We aimed for it, we didn't always achieve it, but I think if you look at what came out of that summit, it's a significant shift from prior summits. Kananaskis also produced the G8 Africa Action Plan, which replaced the old donor recipient paradigm with a notion embodying in the Millennium Challenge Corporation and the Monterey Consensus of a true partnership between developed and developing countries. As an aside, I think the Canadian Sherpa at the time, Ambassador Bob Fowler, deserves enormous credit for the success of that summit. At the French summit the following year, the agenda was expanded to directly address clean energy and environmental concerns, including climate, and the outreach was expanded to include virtually all of what are the G20 countries. As a result of those changes, I think the G8 became a more robust and action-oriented vehicle. I think it also became a flexible one with a de facto membership that expanded and contracted depending on the issues in effect form followed function. In conclusion, let me just say if the G8 should be replaced by a G20 or a GX, and I'll let the others speak to that. My prediction based on my own experience is that the altitude at which Sherpa's work will approach the death zone, the supplemental oxygen will absolutely be required, and the need for patience will go well beyond whatever I could show or did muster. Thank you. I appreciate it. 20 years ago, I wrote that one should ask not what G7 summits decide, but what direction they point in. The summit is only one point on a landscape through which we must find our way, and I believe this is the right way to think about the Pittsburgh G20 summit that's coming up. The contours of the international political landscape have changed a lot since I wrote that. One of the most significant legacies of the recent crisis was to create a G20 summit that now towers over what I had thought was a long outdated G7, G8 summit structure. The G20 finance ministers and central bank governor's meetings, which were created in the late 1990s, have consequently come to occupy the critical path to these summits. And another 1990s innovation, the financial stability forum, which proved a disappointment in failing to identify the systemic risks that were realized with such tremendous force over the past two years, has been reconstituted and hopefully invigorated as the financial stability board and is reporting to the Pittsburgh meeting. My observation still holds. I hope for a clear sense of direction, but expect little by way of really important concrete operational agreements to come out of Pittsburgh. And I don't think this should be seen as a disappointment. The meeting has not even taken place yet, but it has already played an important role in providing a goal to those following the path through the valley, over the foothills and up the slope to the summit. The work has been going on in a number of groups, including the G20 finance ministers and central bank governors, the financial stability board, the IMF and World Bank Executive Boards, the Basel Committee of Bank Supervisors and others. This is all important work. And they've been responding to directions given at the previous G20 summit in London in April. And I expect there will be a sense of moving forward from the groups that have been working and that will deliver reports. The big accomplishment of this meeting will be the revived confidence in the global economy. The London summit took place at a time when fears seized markets and the public. We've almost forgotten how frightened we were in April. Stock markets have been on a vertiginous slide until just two weeks earlier and no one knew whether it was over or not. US housing prices were falling at an undiminished rate. The most recent data showed global trade falling faster than anyone could remember. And there were few, if any, anecdotes to suggest an end. Jobs were disappearing. In retrospect, the meeting took place at about the darkest day. Policy action had been taken to counter financial distress and economic contraction with international consultations playing a role, I think an important role, going back to the G20 finance ministers and central bank governors meeting in October of last year and the first G20 summit in Washington the following month. Governments have been lenders of last resort, that is they've done quantitative easing, and they have been spenders of last resort, that is they've done financial stimulus. These policies have gained traction and the results are visible. Banks are willing to do business with one another and the spread in the interbank market has come down. Global bond markets are wide open at attractive rates for the issuance of both investment grade and high yield bonds. Equities have rebounded with US, European and emerging market indices all up by roughly 50% from those dark days in March. Housing prices in the US have leveled off and sales are picking up. Economic activity is visibly strengthening with indicators pointing to surprisingly strong third quarter growth in the United States with China gaining further momentum and growth resuming in the Euro area, the UK, Canada, Brazil, Korea and elsewhere. The heads of state and government will deservedly call attention to this turnaround but it should mark a transition in their efforts, not a declaration of victory. The main things to look for in the three areas of focus for the meeting or the three areas I would focus on for the meeting are as follows. First, sustaining recovery. The leaders are unlikely to make the mistake of concluding that the recovery is assured. The growth we are sensing now is largely the upside of a violent inventory cycle and looking beyond this quarter or next, growth is at risk of falling back in most countries as consumer and business caution restrains consumption and investment demand. So there is going to be the need for continued demand support but if we look further ahead, there are a lot of countries led by the United States, the UK and Japan that have fiscal trajectories that are simply unsustainable and bear the seeds of future crises. A credible focus on this challenge is also critical. And related to this is the need for commitment to do what is required to continue to narrow huge current account imbalances. They will widen again with disastrous consequences if leaders take a business as usual approach and while it may be too soon to rely solely on the recovering financial system to provide adequate credit intermediation channels, plans to reverse the quantitative easing that central banks have done in an orderly way will have to be formulated soon in order to maintain confidence that the world is not headed towards inflation. Central banks are and should be independent but encouragement from the leaders to prepare for reversal is important to reassure markets. So we need a coordinated exit strategy planning process that the leaders focus on. And this message would strengthen confidence that demand support will not be withdrawn prematurely but that processes are in place to shrink the outsized imbalances. At the same time, as others have said, there has to be intention on the fundamentals going forward for prosperity. That is attention to the international, protecting the international trade regime, investment regime and domestic reforms. The second area of focus is financial reform. Last October, I thought it was premature to address seriously the reform of the financial supervision and regulation. And even in April, it was difficult to look beyond the immediate crisis, the task of building a more stable global financial system. But now is the time. National authorities have had an opportunity to draw lessons from the crisis, specialized groups like the Basel Committee and the Financial Stability Board do have work to report and the public debate is in full swing. And the stakes here are high. Financial regulation is and realistically must be a responsibility of sovereign authorities. And that leaves some ambiguity as to what can be done within the EU and the Euro area. But this can't be done by a global group. And national government, because national governments have the accountability and the fiscal responsibility that's essential for legitimacy in this area. But the markets are global. And so too are the major institutions that take part in them. So the tension in this inconsistency can only be contained if there is strong and deep global cooperation and coordination. The work has to go forward and the specific agreements have to be reached in more technical groups than a summit. And the four areas in which I understand the FSB will be responding on where internationally coordinated approaches will be especially important to create stable financial environment for the future are first, coordination of systemic oversight to identify threats. We need a global view from those whose job it is to recognize what could go wrong. Second, coordination of oversight of systemically important global financial institutions. This is critically important to effectively identify and contain risks as somebody who works in one of these institutions. It's all so critical so that we can serve our clients without encountering inconsistent and incoherent requirements from different authorities. Third, resolution procedures for global financial institutions have to be worked out. US authorities have recognized the need to have means to take over financial institutions in addition to banks in ways that provide a more favorable trade-off between taxpayer expense and systemic stability than we can have now or that we had last September when we went one way with Lehman and the other way with AIG both of which were very costly. Since the relevant institutions are likely to have multinational presence, this is going to be an important area for international cooperation. And fourth, we need a global approach to capital and liquidity. We're beginning to see a proliferation of local capital and liquidity requirements that runs a risk of creating national silos. This will mean higher credit costs everywhere and much higher and more unstable costs in some markets especially for global businesses who need the services of global institutions. Capital and liquidity requirements need to be reassessed in light of what has happened. But if this is done country by country, rather than globally, the result will be greater financial rigidity. Now, the agenda is much broader than the points I've identified, but there are some important financial issues, derivatives market regulation, for example, that are much too technical, I think to be more than flagged at the summit level. And some others carry more political weight than import for the future stability of the system and how much I'm gonna get paid, for example, I would put in that category. The areas that I have highlighted are the ones where the leaders can do most to improve financial stability and strength by giving direction to the export groups that have to carry this work forward. The third area that I focus on for this meeting is the international architecture. The reform of the IMF and World Bank Governance will be on the agenda and it's long overdue. I tried to give this some impetus when I was at the Treasury in the early 1990s but made very little progress. The crisis has given glacially moving reform some impetus. The critical needs are to reweight governance structures to reflect the large changes in global economic and financial power that have taken place. And I disagree with the person I asked the question over here who says it hasn't happened. If it hasn't happened yet, it'll happen within a quarter or two, that China will become the second largest economy in the world without taking PPP into account. And nobody can say that they're rightly reflected. It is Europe that is way overweighted in these institutions currently. But the need to address this and to bring the governance of these institutions in line with reality is important. And there is a risk that as the crisis passes, the momentum behind change will run down. And the G20 summit, which has brought emerging market leaders to the table, can play a critical role in keeping this from happening. These are the key directions that I'm gonna be looking to the Pittsburgh meeting to provide direction on. We've got to keep our eyes on what happens on the slopes and in the valleys between summits. This is where the FSB, the Basel Committee, the IMF, the World Bank, this is where the essential agreements on cooperation I think are going to have to be worked out. Thank you. Dr. Kirscher, thank you for those insights on financial markets. Next, we turn to Dan Price, who again is the person that launched the G20 summit, I think has an unequaled perspective on how they're regenerating potentially the way forward. Thank you for joining us, Dan. Thank you, Steve. I think it's still too early to decide whether I wish to claim parentage. What I'd like to do is address three things. First, why G20? Why did we decide to have a leaders level at G20 in the fall of 2008? Second, ask what are the merits of that forum? What have these summits accomplished, given overview of that? And third, what are the current challenges? In particular, some of the challenges that'll be faced in Pittsburgh, but challenges to the functioning of the G20 at leaders level. First, why G20? Cast your mind back to the fall of 2008, not that long ago. Virtually every day, in many countries, there was breaking news of failing or stressed financial institutions, declines in stock market indices. It was a crisis where event after event was breaking, certainly in the major financial centers, but more broadly. And there was a sense, if not of panic, broadly in the globe, then certainly a great deal of uncertainty and concern about where the bottom was, what the repercussions would be, and how were we going to manage ourselves to deal with what first appeared to be a financial crisis but was rapidly morphing into a more broadly-based economic crisis. A president Bush decided that it was going to be important to gather leaders together to address this. The question was, when do you hold a summit with events breaking on a daily basis? And the finance ministers, whose input would be critical, pretty much preoccupied on a day-to-day basis with other things. So when do you hold that summit and who should be there? Some of our European colleagues believed that the summit should be held among a relatively small group of countries. Say the G7 or G8 plus a few major emerging markets. The president felt very strongly that a leaders meeting had to be broadly representative of both developed and developing countries. After all, while the crisis may have been felt at that moment, principally in the developed world, it was rapidly affecting developing countries as well. So too, for legitimacy purposes, any blueprint for economic or financial reform in order to enjoy broad support needed to be endorsed, discussed and endorsed by a broad group of leaders. So after his consultations with a number of heads of state, the president announced the holding of a leaders summit at the G20 level. Sorry, a leaders summit among the G20. And YG20, it was a broadly representative group. It was a group that existed. It had the merits of not having to decide ad hoc who should come, who should not come. There was some institutional history among the finance ministry channels as they had met annually since 1997. So it made sense as Ambassador Fujisaki, I think, said as a matter of first response to hold this at the G20 level. So that's the origin. What were the benefits of doing this? I would say two things. First, look at the deliverables from that initial Washington summit. It was a broad statement of principles and a 47 point action plan laying out specific actions in the financial regulatory reform area and reform of international institutions. We had about roughly four weeks from the time the summit was announced till the time it was held to put this together. And in a certain sense, we had Mike Froman at lunch. I feel bad that Mike Froman has had so much time. Right? There was something about the compressed timeframe. The real sense of crisis that helped bring countries together. How else would one have imagined that such a diverse group of countries in such a short period of time would express support for open and competitive markets, for the importance of private property and respect for the rule of law, for rejecting protectionism, rejecting taking measures even if permitted by the WTO? How else could one have expected such rapid consensus on reform of international financial institutions? As Jeff said, this issue had been around for years or the expansion of the Financial Stability Forum to the Financial Stability Board. Importantly, having the involvement of the major emerging countries as well as other developing countries changed the dynamic of the discussion. It was no longer as summits often are characterized by just transatlantic tips. And I would say that the major emerging market, Sherpas, at least in the discussions among Sherpas, played a very constructive role in moderating the tensions either among European countries or between Europe and the United States. And as the host Sherpa, I certainly welcomed that. So, and also a number of critical insights came from the emerging market participants. You'll recall in the Washington Summit Declaration that there's a cautionary note about the risk of over-regulation and the risk of an over-reaction to the crisis. That was put in there by the representatives of the major emerging markets who said, we know how you are in the West. You have a crisis, you overreact, and in the end it's we, the developing countries who suffer from your over-reaction. Very, very helpful. So I would say there are many benefits to having a leaders forum address global financial and economic issues at the G20 level with such a representative group. Let me take a moment and talk about some of the current challenges. And as I say, current challenges for the G20, not just for Pittsburgh. The first is accountability. What are the mechanisms that you put in place to ensure that you keep the promises you've made? Whether those promises are in the form of writing checks or in the form of not enacting protectionist measures. What body, what entity is seized with responsibility? And how do you ensure that you actually carry out what you say you're gonna do? Including in the regulatory reform area. How do you ensure that where you've agreed a sense of principles, a set of principles, whether it's on capital adequacy or liquidity or bringing derivatives onto exchanges, how do you ensure that the resulting domestic legislation is consistent with those agreed principles? So first is accountability. The second, I think, is protectionism broadly defined. Not just trade protectionism, but a general turning inward on recovery and reform efforts. We're by now familiar with this in connection with economic stimulus plans that may favor local products, that may favor the purchase of local products or subsidized local purchase. Less familiar, but growing ever more present, are protectionist measures in the financial regulatory reform area. As countries begin the process of addressing systemic risk and pushing forward on financial recovery, too often they're looking at it on a solely national basis. With the consequence that, for example, the Swiss have adopted leverage limits that exclude from the leverage calculation the entire domestic loan book. That discourages lending abroad. The Europeans have adopted or proposed regulations on investment funds that say if you want access to the institutional investors in Europe, you must be physically present, authorized, licensed by us. So what we see in these things, in effect, is a de-globalization that notwithstanding all of the good statements about cooperation and the need to work together, that when it comes to the tough stuff of regulatory reform or economic recovery, there is that urge, there is that political urge, to do it without regard to its impact on global capital markets or global supply chains. Final risk, and this is a risk before any summit. There's really, really important work to do. Jeff outlined, I thought very well, the important work to be done on institutional reform, regulatory reform, charting a new approach to sustainable growth. But it's always the case before each of these summits. There's some drumbeat on an issue that bears only a marginal relationship to the real work of reform. Before the Washington summit, it was about unregulated hedge funds. Before the London summit, it was about tax havens. Before the Pittsburgh summit, it appears to be about banker's bonuses. Now, while all of these are legitimate topics for discussion, I don't think anyone would agree that these particular issues were principal pauses of the crisis. Compensation is but a piece of the puzzle, and I would suggest not the most important piece, but it's also a piece on which there is a great deal of consensus. The FSB has adopted principles that I think are broadly shared on compensation that aim at the issue of risk, that discourage excessive risk taking, that tie compensation to the longer term performance of the enterprise, ensure that compensation is paid out over time, subject to clawback if performance deteriorates. But to kind of go farther and advocate an absolute cap, either a number or a fixed ratio. Fortunately, President Obama and his advisors are on record opposing that and rightly so. So as I say, the final risk is that there is the possibility as you run up to these things that something kind of hijacks the attention and becomes a distraction from the important work of reform. I'll stop there. Thank you. Thank you, Dan. And now we turn to Ambassador Alan Larson who has, I think, a terrific perspective from so many different angles, being seen this through so many administrations through his work in the OECD, working with many of these governments. And I look forward to your comments. Thank you very much. Oh, thank you very much. I would like to broaden the lens a little bit and talk in a more general way for a few moments about why the G process has played such an important role in the governance of globalization and why it will continue to in my estimation. The G process has been responsive to new challenges and it has addressed over the last 30 years exchange rate issues, international poverty issues, international security issues after 9-9-11 and energy security issues. It has been a less formal process than many and one of the things that is most notable about it is that leaders and sherpas engage in real discourse and real negotiation unlike what happens for the most part in the United Nations. And there's an anecdote about President Reagan going to his first summit and being shocked that people were starting to talk about the communique even though the meeting had just begun. And he sort of rightly said he thought that this was a little bit out of sync. Now the fact of the matter is draft communiques have been written and will continue to be written for the most part before the meeting by sherpas. But what President Reagan I think was rightly stressing is let's have a real exchange. Let's not sit down here and try to wordsmith a document. And when that principle has been respected the quality of discussion in these four has been tremendously valuable in finding your way towards a good solution. The accountability factor has been good at times, poor at times. I think Dan is right to emphasize it as a crucial factor going forward. And it's something that my organization Transparency International USA has been prodding on and will continue to do so. Without getting too historical, I wanted to just comment a little bit about some of the types of issues that have been taken up in the G process. During the Carter administration, the first summit that I remember working on, there was a tremendous focus on oil import ceilings and targets because the issue then was how do we collectively reduce our dependence on imported oil in the wake of the oil embargoes and oil shocks of the 1970s? We can't agree on a universal import limit. We're not gonna agree on a collective oil import tariff. But can we agree on what we each will do? What we think the result of those policies will be in terms of reduction of oil import dependence and have a mechanism to keep ourselves accountable. Far from perfect solution, but it frankly maintained cohesion at a time when cohesion could have been lost. During the Reagan administration, there was a focus on economic growth issues. Again, a topic that is not gonna go away and on currency issues, the high value of the dollar. And I remember having very detailed discussions at the heads level, at the president, prime minister level, about structural adjustment and the need for economies to be flexible and responsive to change. During the Bush administration, Bush one, I was in Paris for the most part at the OECD. And it's interesting to, Jeff Schaefer mentioned the role of other international organizations during the valleys between summits. I found that the work that the OECD did on issues like unemployment policies, to make economies more responsive to economic cycles and to be able to help the unemployed get back into the workforce as quickly as possible, to be a very significant contribution that fed in very helpful to the summit deliberations during that period. And in many of these organizations, and the OECD was no exception, you both made a very big contribution to the work of the summit, and you took close account of what the summit said because it helped give you a sense of what action plan might be best for your organization to ensure its relevance to the major issues of the day. During the Clinton administration, a lot of the focus in summits began to shift to issues of development. There was a deep concern about issues like the digital divide. We're going through the dot-com boom and everyone thought this is great for us, but developing countries are asked, how do we benefit? How do we ensure that this can contribute to our development prospects? The other big issue that emerged, and I think was dealt with to some extent effectively, was the issue of infectious diseases, mainly inspired by the HIV AIDS crisis. During the Bush administration, under Gary's leadership, we actually got, I think, significantly more progress made on some of those issues. Gary's already spoken about the response to 9-11. I'll only second what he said and say that the summit in 2002 at Ken and Askus was the first summit, the only summit I ever attended, that was actually in the mountains, and I think that the results that came out of that, not only did a terrific job of setting out an agenda, but it helped ensure that this wasn't an issue that created unnecessary divisions. People, economists like me, like to talk about global public goods, things that their character is such that even the country's largest United States can't consume them without working with other countries and without some burden sharing, and also global public bats, things that you can't prevent, even a country like the United States, on your own. You have to cooperate with others and to the extent that free riders aren't cooperating, it's very costly to the international system, and there's a very real sense in which the G process is dealing with global public goods and global public bats and trying to find out cooperative solutions to those problems. I think one of the other major developmental initiatives that was notable during Bush 43 was the work that was done on infectious diseases, and particularly in the Rome Summit of 2001, on the Global Fund. This was a really good example of a situation where people at this very close range that Dan and Gary and Ambassador Costa and Oleda and Ambassador Fujisaki know so well, where you hammered out, not agreements that were internationally binding, but understandings that created some common ground among players that would have to play the leading role in pushing for international consensus on these issues, and I think that's the great merit of the G process. Looking ahead, I wanted, you know, I said earlier, I think for better or worse, something like the G process is going to continue to be an important and necessary part of governance of globalization. I'll give two examples. You know, I talked about back in the Carter administration the focus on energy policy. We're now in the run up to Copenhagen and to a major international conference on how we deal with the challenge of global climate change and the way that energy policy fits into that. I don't pretend to know how to read the tea leaves either in Copenhagen or what's going to go on a few blocks from here in Capitol Hill, but there's increasing talk about the fact that we may not have a climate legislation this year, we may go to Copenhagen without that, and I can easily imagine that part of the path forward could turn out to be a process where a G something group gets together and tries to figure out, well, look, we're not all gonna be able to do the same thing immediately because our domestic political situations won't permit that, but what can we do that is pushing in the same direction that's broadly consistent and certainly not incompatible? How do we measure whether we're following through on those commitments, be they policy commitments or some other commitments? How do we measure the results of those commitments so that we have an accountability for what we're doing and how is that perhaps a pathway towards a sort of more comprehensive and more elegant international framework on dealing with energy and climate? That's not a prediction, but it's just sort of a statement of the way in which a G process can be very helpful on other future major problems. We've already talked briefly about economic and financial issues of the future. I'm in the optimistic camp that we will work our way, that we are working our way through the current crisis successfully in substantial part because of the ability of the G20 process under the leadership of Dan now Mike Froman to keep the international, the major players more or less on the same path forward when it comes to fiscal stimulus, monetary stimulus, financial regulation and avoiding protectionism. But we still have to have growth. We still have to deal with the problems of the large US deficits of fiscal and current account. We have to deal with international imbalances and it's not inconceivable that we'll have to have another summit that's really focused on some very, very tough currency, current account imbalance issues. And it's quite likely in my mind that if that future arrives, that it will be a G type process that will lead the path forward to towards a solution, not to a solution, but in the direction and towards a solution. Thank you. Thank you very much for all of your comments. Before I turn it over to the panel, I'd like to raise one quick question. The G20 process was born out of this global economic crisis where many people believed we could have headed over a cliff towards the next Great Depression. We've had extraordinary fiscal and monetary actions that have staved that off, but now there are voices saying that as the political momentum dies down, we're not doing enough robustly or quickly enough to prevent a financial crisis 2.0 or W shaped recovery. Is your, in your opinion, are we doing enough both in substantively and quickly enough to avoid that kind of risk? And if not, what should we be doing about that? I mean, it's my view that one has done, one has been enough and as much or even more than one could realistically expect up until now. But this is a transition point. As I said, in April we were just in desperate straits. Now there is some sense of stability and the question is, do we just pretend like it's over and go about our business or do we recognize that we have all of these very serious problems still in front of us and refocus on those? I think that we'll have to see what happens in the next six months or a year to see whether we do that or not. I agree with those who identify the improvement in the global economic situation as a risk to reform efforts. As I said, I mean, I do not think we would have been able to reach consensus as quickly as we did on both principles and specific action points, but for the pressure of the crisis. And the fact that things are looking up does not mean that implementing the agenda is less important, but it will have less of a sense of urgency and that is a problem. And one of the key things to come out of Pittsburgh will be a renewed demonstration of political will among these leaders to implement that reform agenda. Since I guess the paraphrase Rahm Emanuel to make sure we don't waste a crisis in terms of using it to solve some of these things that are out there. With that, I'd like to turn it open to the crowd. The one right here in the second row. Thank you, my name is Paula Stern. Thank you very much for the presentations. They've all been excellent. And I'd like to kind of continue in my question the dialogue that you just started about the implementation phase of the G 2020's work, specifically when it comes to the trade agenda and the agenda of that organization, the World Trade Organization and possibly the OECD given the fact that we've got a G20. It's a different type of a membership. It's been my view that the WTO and has been underutilized that we only think about as a litmus test of the WTO and the World Trading System is whether the Doha round gets passed. And there are so many other aspects of the WTO in particular reviewing subsidies that have been put into place as part of bailouts. There are other opportunities, it seems to me, to deploy the WTO as an organization just as we have seen the financial stability board become more robust. We have not seen that kind of growth which I think is important for averting of future crises and achieving the kind of accountability from these G20 efforts. And just my last contribution to this whole thing about what should this be, the G20, G8, I always think this is really a G-Wiz question. And this has been a pretty G-Wiz afternoon, too. Does anyone like to address the utilizing the WTO? I know we have many people that have worked extensively on those issues. Just a very quick comment. In Washington, we made the protectionism pledge, but we did not seize an organization with monitoring it. That was a mistake. In London, that mistake was remedied. And the WTO was seized with responsibility. The question is, and Ambassador Hills, you may wish to speak to this, there's a certain ambivalence on the part of member organizations as to whether they want the secretariat, whacking them and publicly naming and shaming them. And so I personally think it's a good idea that we need a robust and rigorous review and not closed in diplomatic language. But, you know, we'll see. The WTO did just issue its second report, perhaps third report, indicating I think the word used was slippage. Thank you. Andresita from TAS from Russia. How do you see the international position of the U.S. and of the dollar changing as a result of the current crisis? The question is for you. Thank you. Jeff, do you want to take that as a financial expert? Well, I'd say it is, too, as somebody who started his career in the Fed in the 1970s and we were all worried about that money at the dollar then we had some problems. You know, the world is changing. Your area is about as big an economic area as the U.S. is now. There's a logic that there should be some rebalancing of roles there. China is emerging as an important economic weight as well, but as far from being able to have a currency that plays an international role, given both its market structures and its closed borders, but if one looked ahead many, many years, one could see greater diversification. I don't see, there have been changes in the past and there may be changes, there may not be in the future. I don't see this as being cataclysmic or leading any kind of a crisis. I think it's a normal evolution. I do think the U.S. economy will come back from this and will continue to earn a place as an important place where people will want to use our currency, but maybe not the only one. I agree with what Jeff said and I just add two points. One, internationally it is important to address this longstanding issue of global imbalances. Herbstin once said that something can't go on forever, it won't and this is an example, I think, of that. And that's, there is action for all countries on that score. Certainly part of the action for the United States going forward is addressing long run fiscal sustainability. Thank you. Charles Harris, Yomir Shemba. My question is on the IMF voting shares. What will be the strategy from the U.S. side? Will there be a push for larger shares for developing countries? And if so, what kind of resistance will we see from the European countries to that? I know it's a very difficult topic. Both the last administration and this administration expressed strong commitment for reform of the international financial institutions to accord proportionate weight to the representatives of the major emerging markets. Yes, even at the expense of the Europeans. As Jeff explained, this is slow and painful, but I think this administration is committed to moving that forward. I think we had a question right up here in the front. On the right hand side. Michael Martin from Congressional Research Service. I want you to address perhaps the role of being Sherpas in terms of two sources of criticism of the sort of GX process in general. One, as the earlier panel talked about, there's sort of a trade-off sometimes between the depth at which you can examine an issue and the breadth of the parties involved in the issue. So do you want a G8, which may be smaller and more depth, or a G20, which gives you more breadth? I would add to that also scope of the issues addressed. Mr. Edson, you talked about moving APAC, for example, beyond the economic focus. There's now criticism of that in light, saying it's kind of mission creep, moving beyond the scope of what the organization was identified to do. So looking within a particular GX formation, balancing depth, breadth, and scope of the agenda. Outside of it, some people have been critical of sort of the amount of effort going in prior and the preparation work and then the post-event fatigue, basically preventing the existing institutions from really addressing the day-to-day work that they need to do. As you sort of go from summit to summit to summit and never really can get into the full implementation. So as Sherpas, could you comment a little bit about the balancing of depth, breadth, and scope of the G summits? And then second, what about this criticism that the cost-benefit analysis of having events of this sort really doesn't merit continuing? Kerry, do you want to think that you saw a lot of iterations in the G8? They're good questions. I don't think of it necessarily in terms of depth, breadth, and scope. I think you got to be honest about the core capability of these groupings. When I look at trade issues, for example, I remember all the time everybody used to say, oh, we've got to deal with the trade issue with the G8. The G8 is not a good place to deal with trade issues. You're not going to argue about agricultural subsidies and the formula for reductions in the G8. Leaders aren't going to do that. But most it can give political impetus to it and large political commitments. I actually agree that the place is the WTO for that. And what leaders can do is direct action there on development issues, not so much depth, breadth, as the group around the table. When you're in a G20 meeting, the emerging powers act like recipient countries, not donor countries. And you have a sterile debate about development issues. From the standpoint of G8 versus G20, for the development community and for the poorest countries, the G8, I think, remains the better forum. The G20 is really talking about the emerging powers in the middle-income countries. Plus for Africa is that South Africa is at the table. Minus for Sub-Saharan Africa is that South Africa is at the table. In point of fact, the poorest countries got more of a voice and more of a hearing. And their issues, more attention in the G8 process than they've received in the G20 process. Climate change, I happen to think that what Dan did with the major economies process is the right grouping. And I think that Al was kind of alluding to maybe that's the group that comes together that makes some high-level decisions that breaks through to achieve at least some results in Copenhagen. So I think it's a question of the countries around the table and having the right group to deal with those issues. The G8 has proven it can deal with detailed questions of advanced passenger manifest exchanges and the details of HIV. The G20 has proven it can deal with financial stability forum issues. It's the right group around the table at the right time on the issues. It's not a question of depth and breadth, I don't think. Anyone else want to comment on that? The one problem that we're creating, we keep talking about things that are unstable, eventually, crack. The proliferation of the demands on the times of heads of state and government is really astounding. And one cannot go on much longer and have a president in this country who has a capacity to do what he has to do at home as president. And so there is kind of a different geometry that would be nice for different issues, but somehow we do need to have some kind of overall limit on how much travel we have for these meetings. I worry more about that than I do about the preparation process. But I'm always finding different groups of sherpas to do the preparation. Well, I think we'll take two last questions and if we can group them together, maybe we'll go from the woman in the back and then I'll actually, I'll cheat and take three. Take the woman in the back, the man in the front and then the gentleman in the far back on the right-hand side. But if we could please quickly stay one question and we'll throw them all up to the sherpas. Okay, Mindy Reiser worked in Central Asia and United Nations. I'd like to hear about those who are not at the table. The last comment began to talk about that, the developing countries who rely on spokespeople who may not be their spokespeople. And how does this all affect the dialogue and the decision-making such that it is in the United Nations? People here talked about highs and lows, troughs and summits. How does the United Nations and its processes and its affiliated agencies fit into all of this? Great, we have a question right here. Barry Wood, Freelance Economics Correspondent. Dan, you spoke about a year ago when Mr. Sarkozy and Mr. Brown came to Camp David. What kind of forum did they want? And in starting at G20 as a group, which now includes Spain and others, haven't you put in process something that may be too cumbersome to be effective? How are we going to get consensus as time goes on among these disparate countries? Particularly when you have so many around the table, time they give speeches, there's not really much time left. And then finally, at the back of it, it's Bill Helkey. Bill Helkey from the Federal Reserve. As Jeff knows, this question will be for him. Jeff mentioned both institutional reform and the great growth in China and how large China is. As Jeff well knows, we have three important institutions in international finance, capital mobility, independent monetary policy, and fixed exchange rates. Our beloved co-author has described the relationship between the US and China as the new Bretton Woods. Now, I recall you as a close observer in 1971 to 74 and 75 as we were going off Bretton Woods in the problems. Would you agree with me that it's time to go off this new Bretton Woods since China is too large to be on a fixed exchange rate? Or would you agree with Mike that this is not the appropriate time to go off this? And I would, as a footnote say, I believe that most of the financial or a great part of the stability and asset prices in 2008 were due to the co-dependence of monetary policy in US and China and the inconsistent policies being taken. What are the first two? First, they kind of deal with who's around the table. I think it's an interesting question based on Gary's comments about when you select a country to represent a region like South Africa for Africa or Egypt for the Islamic world and how that plays out. So would anyone like to tackle those? And then the mechanics of, can you have a successful operation with 20 countries around the table? Anyone would like to address? I tend to think of these G groupings as sort of efforts to discover where a solution to a global problem might lie. They are not global legislatures. And the fact that a country or a group of countries isn't there doesn't mean that they've sort of lost their vote or representation. Obviously there needs to be vigorous outreach. Obviously you need to listen carefully but you don't use them to make decisions. You use them to test whether a solution may be possible. And when I was in government and would have groups come in and complain to me a little bit about the WTO Green Room process or some other smaller grouping, I'd say, well, look at what goes on in the Congress. There's always small groupings. Caucuses working, they said, well, yeah, but that's different. And I'd say, well, what about your own organizations? Whether it's a religious organization or, you know, this is the way that you'd find where a solution may lie. And I'm not saying it's perfect but I haven't found an organization that doesn't have a process somewhat similar to it. At least an organization that actually works. Anyone else on the structure and inclusion before we turn to Bretton Woods? Bretton Woods, I believe that was directed at you. Well, my good friend and former co-author Mike Dooley is one of the fathers of this idea we have a new Bretton Woods and we ought to keep it. And I look at it and we had an old Bretton Woods and it didn't work very well and it broke down. And I've taken his analysis as being absolutely right but thought it pointed to a problem that we have. I had thought that the monetary history of my career which began at the Fed in 1972 could be summarized as the U.S. dealing with a series of countries or regions that emerge from backwardness or war damage and who had exchange rates that were appropriate for that environment who were slow or reluctant to adjust to a new reality when they were a full strong economy and as the economic data shows very clearly need a stronger real exchange rate. First it was Germany, then it was the west of Europe, then it was Japan, then it was Korea, then it's Taiwan, now it's China. It is the same old process. And I don't see it any, it's just, and it's a natural process and a natural evolution. It doesn't take place overnight but I think it will take place. It had started before the crisis with more rapid adjustment of the Chinese exchange rate. I'm not surprised that in the middle of the world falling apart with the Chinese authority kind of stopped for a while but I think economic forces are going to lead to this process continuing again and it was an important part of this talking about trying to achieve more balanced growth going forward. Anyone else or any closing comments? Gordon Brown was not at the Camp David meeting. It was Sarkozy and Varoso. As a factual matter. Not that that had any impact on the outcome. I explained why the president decided to hold it at G20. I think your question is, is the group too cumbersome? Is it too big? Do you have the right? It was the right group for November 2008. I think it was also the right group for April 2009 and for September 2009. Whether that continues to be the right group, I don't know. Well, I want to, I hope you all will join me in thanking our Sherpas who have done such great service to the country and we're really, we're insightful on all the issues today. Thank you very much.