 No, I don't have to I don't have to defend the IMF in the Asian crisis because I I think they I think they started out making some mistaken assumptions on the other hand 1996 fastest growing region in the world emerging Asia 1997 recession 1998 recession and the conventional wisdom You see the Asian Tigers have feet of clay structural feet of clay crony capitalism It'll be a decade before they recover 1999 fastest growing region in the world emerging Asia. So somebody was doing something right. So it's It's a more complex story than is used that is usually told But in practical terms in practical terms Where what should central banks be doing now what should regulators be doing now that they're not doing? And or because earlier before you arrived I think the general consensus was that the current macro situation is pretty is pretty favorable And is likely to continue in the near term that even though there were risks I don't think that the consensus was that we're at at the edge of a crisis And I think if I was were to ask there probably wasn't a consensus that a crisis is Inevitable because we're on the on the wrong track in other words that the central banks that policy makers especially the central banks and Regulators have made fundamental mistakes that make the next that already make the next crisis inevitable is that somebody want to Descent from that Andre on central banks, I think In Europe at least in the eurozone. I think we have to finish the job The job has been done. I guess 70% roughly or something like that in terms of coordinating regulation having a system to have a deposit warranty At the level of the eurozone It's well advanced, but it should be completed because again, I guess again Danielle's component shows it There is again this recurring idea that European banks are weak are sick are full of bad loans and so on which I really believe Maybe part sometimes right, but what is true is that when it came out it was solved Right, so we will get that out of it. The second problem we have I don't think it's a problem for central banks I think Bertrand put it very well There is liquidity there is money and we need to have investments start again And I don't think you'll find the solution only with the banks because the constraints today are very high and Given the very low rates today. They should have a strong incentive to lend and I don't think there is a problem there. What you see is happening is on a very small scale non-bank funding Which doesn't really? Cover the problem was too small, but that is growing what you also see is banks setting up subsidiaries or new banks getting into the picture with Different approach because I guess I mentioned that French telecom Company, which is actually more than French As you know in Asia Banking is now done basically by by the cell phones That these payments are done on cell phones and there's also some credit done this way So you see new ways of funding the economy which for the time being are very small scale But could potentially become very very large and maybe that's something that central banks should be looking at Not to stop it or to control it, but to just to see can it be helped in some ways You know to have the system moving. Let me say what the central banks should do I fully agree the central banks cannot invigorate the economies no way and We say banks should lend There is not much of a demand so banks are much more reluctant to lend because of the of the history and there is still a legacy problem there is still I mean at least EU countries and Your your area countries are still very much in debt both public and private debt is pretty large So there is a legacy issue And and the demand is not there not many companies are There is not much of an appetite to borrow so we should acknowledge it. It's not like banks want to lend but The demand is there, but banks do not want to lend it's it's both it works both ways secondly They are structural changes at work in the global economy including digitization and and the new technologies in general which change the picture tremendously and there is so much uncertainty I mean in which fields to invest this is also an issue where to invest. They are the geopolitical also which have to be Factor in so it's not like we have a lot of resources, but We don't know what to invest then There is still a lot of resource misallocation when there is still a lot of resource misallocation. It's not easy to invest more So and and and last but not least I believe that the where the center banks should Be much more clairvoyant is that they that the whole of finance should be regulated The whole of finance because there is an ongoing debate whether things actually And in my view my humble view FinTech has to be regulated because FinTech can be also quite dangerous FinTech is not only an infant industry, which has to be groomed, but it can be very dangerous There is another point which actually has happened throughout this 10 years of this crisis decade Which is a massive shift I would say in the system between banks and institution investors I mean I've been group CFO of two banks and before the crisis the name of the game was to grow your balance sheet and make as Much money as you could with your balance sheet and now the growth of your balance sheet is it comes with such a tremendous cost I mean it comes with capital requirement with tax with so you have zero incentive whatsoever to grow your balance sheet So it's a shift So actually it's very interesting to see that this crisis started with one of the failure of the originated Distribute system in the US related to the subprime and at the end game of the crisis is to push all banks into this originated Distribute system and to put it through the I mean through the value chain And so banks have really changed their roles during these 10 years which has also an impact for the monetary policy Etc. The way the way it's transmitted We are the same moment institution investors not only have grown in size, but are more and more concentrated I mean I Remember I reminded people of a lunch when I was a young banker in New York in the year 2000 I was very modestly advising Larry Fink was CEO of BlackRock at that time He was passing the $200 billion threshold and he was kind of considered a big fixed-income boutique Well, let me put it this way and I remember when I really were on the whiteboard and say someday I would manage a trillion and I say my god this guy is crazy never got I mean one trillion This is just enormous and now BlackRock is managing five point five trillion And you have like ten people which are managing between two and five trillions which is a nerd of in the history of mankind So this is a massive shift. What consequences do we take out of this? I mean the business model of this is people is so different. I mean Societe Generale 160,000 people for one point six trillion dollar balance sheet BlackRock is managing I know it's not exactly comparable, but sort of and BlackRock has five point five trillion dollar of assets and imagine They have 12,000 staff. So the margins are not the same. It's not the people on the ground It's a totally different world that we are not prepared for that and when I call for holistic perspective It also does take this into account. I think it's important to see who are these new players I mean, is it good or bad that we have 20 guys managing more than one or two trillion? Can we argue that I mean if these people react the same way at the same moment It will create the worst panic you can even imagine The 40 trillion moving the same if the 40 chief economist have the same analysis of the same moment Is it scary or not? So you can be scared You can also argue that you don't have the same level of transformation that you have in the banking system That this this companies actually are quite decentralized that behind BlackRock actually have many small smaller shops And they all make different decisions, which is probably right actually But you could also argue the flip side is that it's also a great opportunity to have people which have so much money at hand Because if they do it properly they can really make a difference So the fact that these people suddenly say oh climate change is important It has an impact for us. I want to move in a low-carbon economy. My god. What a leverage We have found which did not exist before the crisis So I think these are these kind of very significant shifts, which we are discovering as we speak But I don't think we've taken I mean drawn any consequences from what's happening and I think for me It's it's fascinating. So I'm not I'm not scared again. I'm scared by the lack of cooperation I'm scared by number of things but on the other side we have the tools we have capacity to handle things That's why it's a fascinating moment because we can go either direction What can central banks do I think Lebanon has been a Prime example for unconventional monetary policies I give an example about the stimulus package and its impact there are two other examples that I can give One is what we call the financial engineering. It was a simple swap It wasn't that simple, but it's multi-level swap that reaped that turned around the situation in Lebanon whereby Banks were capitalized so in anticipation to IFRS 9 and what one January 1st 2018 their basal basal three requirements is not 12 and a half It's 15% now and we have requested the banks to take 2% provisions as well on all their on all their portfolio in In addition to this the balance of payment because of this financial engineering tool that we have done the balance of payment has turned around from a negative a deficit of 1.7 billion dollars in May 2016 into a cumulative surplus of 1.3 billion at the end of the year at that same year in In addition to this we were able to stack our reserves foreign reserves by 43 billion 43 and a half billion dollars So for the first time in Lebanon in the history of Lebanon Lebanon has come close to 44 billion dollars over a GDP of 54 billion dollars So this is one of the things that we've done another thing that I will end up with here is what we call We have launched the knowledge economy in Lebanon We we have taken advantage of the youth the brains that we have in our kids And we availed for the first time and launched the knowledge economy whereby banks do get involved in equity financing rather than giving them loans For the first time banks are partners because prior to this and in any other projects Banks are not allowed to get in partnership with any of their customers with the exception of the knowledge economy Whereby they are they go in in partnership with them. So these are examples about what can central banks do one last thing There was some talk about compliance At every single bank not only they have compliance departments at the hand said head office They have a compliance department in every single branch and that compliance officer Should not be the one who is doing the selling or account opening or what have you that should be some kind of a support Function someone who doesn't deal much with customers if any Thank you very much. If I may I have to catch a plane as a question for me or I'll please So I'll take it and then rush Banks in Lebanon Subject to Basel 2 or 3 Actually all of the capital equity investment capital charge 500% or 750% How can banks can extend equity investment Well, we have no choice. This is why with the financial engineering tool is actually it just we have turned the situation around and we made them capitalized Actually, it's so far Lebanon's and banks are the banks are the backbone of the economy With with what's happening around us with with all the wars all around us with we had we had the terrorists I says right on the borders and part of that for Lebanon. They've taken some parts of Lebanon We have Israel and sour southern border Syria on the northern and eastern border terrorists are all over So this is the only thing that can give confidence as we spoke today Now I'm attending to my phone because I'm getting so many questions from the From the journalists what's happening with the Lebanese leader of the Lebanese because Hariri has resigned today and this will have a major impact So these are the types of things. This is why we are very keen on really Stucking our banks with as much Immunity as possible so that an issue like this or just there are so many different issues Another war gets waged on Lebanon were fine because what can happen in times like this fortunately This came on Saturday and tomorrow is a Sunday people immediately would just transfer their level their Lebanese lira into dollars or euros or Transfer them out of Lebanon or do both So this is why you know I've been in touch with the governor It's what kind of statements we have to make and on the other phone I'm giving that statements to to the other journalists So these are the things that we have we cannot afford but be as Stucky as possible as as heavy as possible and you know what we have 30% liquidity 30% liquidity in our banks This is a lot we have 43 and a half billion dollars as foreign reserves at the central bank This is a lot, you know, it's it's costing just I'm part of the investment committee as well I know exactly what that what it takes and what kind of returns we have on our on our money It's not that fun, but we have to this is sort of the insurance policy that we take for our banks and for the central bank as well Thank you and good luck Challenging It's all right didn't break didn't break, okay Elena you wanted to speak Just a quick comment on your question John about how to use them Relatively favorable economic condition in And what central banks could do during this time Certainly, you know, we should you know when the sun is shining we should be taking care of the basement and the roof And put together, you know from a regulatory perspective and from central bank policy perspective The policies and regulation that are meaningful and sensible in Europe, you know I live in Paris now and observe and follow all the developments in you know, South North divide the critical issue for ECB is to phase out of QE as soon as possible and I'm a little concerned that there you know timid steps been taking in that direction and people are still You know worried about what's going to happen, but this is the best Environment economically we we have in Europe. We will not have better And also, you know politically in France, there is such a good atmosphere with Macron's Election so this is the time to do it because that the QE has been obfuscating the reality of That sustainability in in Europe, you know from that management expert perspective It's mind-boggling how we would Why we would not be phasing out of it as soon as possible. So I think that at least for Europe that would be my vote Seem virtually certain central banks are going to get cautiously in the current environment in any case. So it's I suppose there's some some concern, but I don't know if anybody my perception was not widely shared that They could be precipitating Some kind of a crisis soon And I want to share with you some personal view on the regulatory agenda to answer the question What regulatory should do? I think that they should complete the ambitious process that we started after the crisis and We enumerate the initiatives They were not completed for example on separation side of activities Neither Dodd-Frank or Vickers or Lincoln and was completed on the banking union side in Europe It's the same only only the single Supervisory mechanism was in place. No resolution Which is completed and no insurance deposit at all on the macro potential policy side It's a very useful agenda, but it was not fully operational on the incentive side There is no so much regulation of pace or bonuses and on the shadow banks They There's a taking more and more place and it is not Regulated and even from the French perspective the taxing financial taxes was completely Abundant and I want to add some risk assessment elements the global financial financial cycles are Interacted banks are even bigger than before the crisis and the nexus between banks and sovereign is also Wider since banks bought so much Souverance in addition to that the depth level is very high It was also the global financial stability report of the IMF told us and we can expect some bubble science on mini segments of national markets from Areal estates to Bitcoin and credit to currencies to bonds and stocks so all to say that if we have a crisis in the next few years, it will be more harmful because the Interest rates are very low and the balance just was bigger by historical standards and in addition to that We don't have any fiscal space and finally the cooperation mode is not here. We know that Trump appointed the Randal Quartz, which is a next banker or from the financial sphere to as a financial regulation She and also we have a power yesterday or the day before which is from the Maybe from the bank curse community. So so all in addition to French Position regarding the harmonization of risk model Harmonization so I'm very pessimistic on future. Thank you I mean, I was gonna step back a little bit and address the question that you asked before about What the broader risks are and this is not about whether central banks are doing the right or wrong thing now I think they've been partially doing the right thing, but I think we all recognize that life's full of trade-offs and International finance is no exception that we have an integrated international financial system And if we've learned anything from the past couple of hundred years that that Internet and integrated international financial system is prone to crises We don't know where the crises are likely to come from but we do know what some of the sources of weakness are Both in theory and in practice. The first is we've identified. I think scholars have identified the Gross financial flows are typically associated with potentials for losses of confidence Which then raise liquidity questions because basically there is no liquidity because they can deal with with a loss of confidence And that's what we learned from 2007 2008, you know as Gary Gorton has I think explained extremely well. We had a run on the bank Except that intermediation is now through the market So instead it was a run on the markets and we are still in a position where markets can be run if confidence is lost We don't know what this what the ultimate source or what the initial source will be I don't think anyone would have expected subprime to be the particular subprime was only the tiny catalyst I mean there were underlying weaknesses in the international in American European international financial system that subprime revealed We don't know what might be the catalyst for a next crisis. It could be non-performing loans in in China it could be the European situation despite what mr. Livi that long has said I'm not entirely convinced that That 70% isn't I'm not sure. We're at 70% I'd say more like 40% I think there are real questions about whether the resolution mechanism is sufficient in its current form to deal with a serious crisis I think that we've got certainly some indications that when push comes to shove National government step in and override the agreements that have been worked out at the level of the of the banking union and politics is going to Is is going to rear its ugly head or pretty head, whichever you may think about it. It should a crisis return I think that there is some indication of froth in the asset asset markets the cyclically Adjusted price earnings ratio currently in the US is double what it was at the height of dot-con boom And the debt load on the consumer side has increased continually over the last five years I'm not sure that's cause for concern, but I'm not willing to say that it's not cause for concern So I guess what my my underlying point is there are sources of weakness in national regional and the global financial system that could Moving forward, I'm not talking about the next three months looking forward with the next series of years cause difficulties And the reason I think that's important to point out is what the Othagnol and others have mentioned Which is we face? I think a very different underlying set of conditions in the international financial order today, which is that we have an administration in Washington It is not committed to global cooperation and is not committed to the current institutional structure and is not committed to working together with our Financial and trading partners should difficulties break out now One could argue that the the force of events will will require Cooperation, but I'm not so sure that things will work as well next time around as they did in 2008 And and as we started off by saying things went as well as could have been expected in September October November of 2008 that was with an administration and A income with an outgoing in an incoming administration that seemed quite committed to global cooperation We have an administration now, which is not committed to global cooperation Certainly not on trade and increasingly not on financial regulation and finance more generally and in microeconomic policy so I worry that if and when the next crisis comes and it's almost certain that there will be a next crisis that intervention by the major powers and in particular by the US will be more destructive than constructive and That's what worries me. So you asked what worried me. That's what worries me so when I was doing the forecasting at the World Bank I was I Suffered two crisis Both of which were completely unforeseen At least to the mainstream, which was the Asian financial crisis and then the And then the the great financial crisis of 2008 2009 So this experience, but you'll correct me if I'm wrong convince me and we were that's all we were doing We were looking. I mean just to show you all for the competence We were we were looking all the time for these issues and Maybe not as a seriously as the people at the front, but we had our job to do and so that kind of convinced me that The next financial crisis or financial crisis in general is almost by definition almost Totalogically is the surprise In the sense that if it wasn't a surprise It wouldn't be the crisis. I mean people would be taking steps Well in advance and what happens is when it materializes it doesn't materialize all in one go But it's kind of too late by the time you see it, you know, even if you see Before the worst happens three months beforehand or four months before and it's too late the the all the all the bad loans or whatever it is has built up and I need to be correct. So so I think If you didn't you don't need this for me, but modesty is Is is the good guy here? One point I want to make is that I have been very worried about all the quantitative easing and low interest rates and Etc that this would actually create these Another condition like this as I scan and I and I look I Right now I don't see but of course I don't expect to see where the huge problem is Certainly I don't see it in the equities Etc very simply because the people who are buying the equities buy a lot You know either households or funds. They don't have the big leverage problems. It's a very transparent Sort of thing. Some people will lose a lot of money. They're idiots And some people will lose a lot of money who think they're very smart But overall it doesn't look to me like, you know, one of these highly leverage highly non-transparent situations like the Subprime crisis I was also worried about the emerging markets That they'd get this wall of liquidity and there are of course issues in this way But overall, you know, the capital flows through emerging markets are really quite restrained Have been quite restrained. There are a lot of things that the emerging markets has done as you know flexible exchange rate domestic top-down markets that have lessened the risk if I was If you push me now when the very little confidence to say where where am I worried actually I'm less worried in the markets I'm worried in the government and And in fact, I wanted to ask from the beginning What is the secret I've heard this story many times I want to hear it again because I never understand it What is the secret of Japan? and and So do we learn from Japan that we can have 225 percent last time I looked Public debt to GDP and zero interest rates Zero long-term interest rates. Do I learn from Japan that don't worry about the United States? Doing a 1.5 trillion additional that in please deficit In in the new tax package, don't worry about Italy. Don't even worry about Greece Is that what I learned from the Japanese experience? And as I understand that a lot of the debt is owned in Japan Which means that a lot of the debt is also owned in the Japanese banks and that's what I worry about Well, the last point you made Is the point that many pundits Were referred to as a comforting element I doubt it Many I experienced too many banking crisis since 1980s You know Mexico Brazil Latin America and the 90s, you know You know domestic holders of assets You know captive flight always so Japanese investors they all you know When crisis was looming or in the offing around the corner at least then they start selling their bonds So domestic Holdings of GGB's will not Or should not be regarded as a comforting element. That's my view but Why Japanese debt is so high and interest rates are so low It's because simply because of deflationary mindset there Deflation is there so it will continue a long time In the end what what would happen? There are only three scenarios one is Happy scenario growing out of the debt Japan's economy, you know All of a sudden begins to grow very fast sustainable basis and You know getting rid of deflation and growing debt. That will be a happy story second Japanese government defaults on their promise. This is highly unlikely Even after World War two Japanese government Continued to pay out the debt. They accumulate they they they issued at the time of Russo-Japanese war In 1905 I still remember even in the 70s Japanese government continued to You know repay the debt The last one is hyperinflation Of course, this is a red repudiation sort of So there are only three scenarios But all those scenarios seems not an immediate You know outcome so people just hang loose. That's what it is the question way down there as Yuri said essentially crisis are unpredictable and But here when we were looking at the 2007 2008 crisis people Were at that time in 2005 2004 worrying about the crisis happening in the emerging markets and The crisis happened in the developed countries Or in the advanced economies and the globalization made it such that it was more global Actually when I hear you speaking you And I might understand you wrong But you all seem to be saying that the next crisis will happen in the advanced countries And that's the advanced countries would not be equipped enough or willing enough to address The causes of the crisis or to try to smooth the impact of the crisis but What about the crisis happening in the emerging markets or and and do the emerging countries have the abilities to Respond to the crisis to do something about I'd like to have your opinion on that. Let's assume it goes the other way Okay, I have an opinion that looks like Daniel wants to say something go ahead Let's respond to you I think that for many years people have forgotten about the fact that crisis do not discriminate When we had the great depression those economies were The most developed economies in the world and we had a great depression so that's not the issue the issue is that When when the crisis hit emerging markets, they expect it to be assisted to be helped by the ifis and by the developed economies Of course, if you know emerging economies is small one, that's fine But if you have to deal with China That's going to bring I mean that can bring the whole economy down global economy down the tube But the big issue is that it's not like we have Ordinary crisis like an episode of the crisis. We have a recession in the developed world and then we have a recovery and so on There are structural changes fundamental changes. Think about the level of debt both public and private And and I'm not referring to the United States where you have where the economy funds itself primarily through capital markets. I'm referring to Europe The legacy issue which is not the self-willed in your area you have not addressed the fundamental Issues of its architecture. We have a cyclic recovery. This is not like a recovery which is going to stay It's a cyclic recovery which is supported Basically by very cheap money. It is true that Substantially hard interest rates are not going to To be I mean, it's I think the ECB will be very reluctant To raise I mean its policy rates in the years to come it will deal with the program the unconventional policies So If we do not address these fundamental issues, I mean the legacy the level of debt the poor architecture of the euro area The other in your If we cannot address the issue of income distribution Think in recent years central banks the IMF Bank of England ECB have Paid a lot of attention to income distribution. This is mind-boggling. I mean imagine a decade ago telling The top guys at the top at the head the fat or people at in the ECB or in the Bank of England You should think about income distribution. You should pay attention and this is not an academic exercise This is very pragmatic because if you do not have social stability in society You're not going to have economic stability if you if you don't have economic stability You're not going to have financial stability And ultimately I'll stop on this note. I think we were not addressing major weaknesses The finance the way finance does work We do not I think we should reduce much more leverage Banks can be very destabilized as actors in the economy The whole of finance can be very destabilizing the fact that we do not have policy coordination The global economy that can be very destabilizing. So what we need is very simple systems Very simple very transparent no portion of finance should be beyond the territorial regulation and supervision Otherwise So Coming to close me say a few words about the question about emerging markets all the major emerging market crises Modern my modern times. Let's start with the but can we start with the the so-called the Latin-deck crisis of their early 80s Let's go to the Mexican peso crisis the Asian currency crisis every one of those was a reflection of instability in advanced economy policies and Rather than something self-generated by by the emerging markets What happened was after these repeated shocks emanating from the Advanced economies at the very least the these economies followed dare I say it advice to clean up their financial systems to make their exchange rate systems flexible and With solid banking systems and flexible exchange rates that didn't that didn't insulate them from broader macro trends But it did keep them out of the out of the subsequent crises. So For example details, but Asian Asian currency crisis it was if the preconditions were well foreseen the at least in the private sector the issue EG Thailand was was recognized as a likely Candidate for crisis the question was what were they going to do about it? That was the unknown My my view is they decided to have a crisis. I don't want to bore you with the details And they warned their bankers and their bankers got out of town and left basically Japanese banks holding the bag Okay, Europeans first, but also Japanese fair enough. Yeah, also, okay. Yes, okay No, no because on the on the official side on the official side because the official side didn't see the Interconditions that were that were laid out through the East Asian dollar standard namely You could go on and on but it's just for everybody else But basically it to the to the official them the two things happen one it appeared First Thailand then you know then the Philippines is like bombs exploded all over here and then seemed Uncoordinated to the private sector. It was I see the pattern and I'm not going to be the sucker to hold the bag everywhere else, right? Okay, but here's the second part that wasn't recognized and isn't recognized even today and that is there is no crisis prevention instrument in international finance that the IMF which has essentially only crisis resolution instruments Available to it. There's this idea that there's somehow because there's a financial safety net. It's it is crisis prevention, but it is not and There have been attempts to create crisis prevention instruments Which would have to be insurance like instruments in a world of securitized finance and even today there is no official willingness to create those kind of mechanisms and it basically Colleagues here who have been central bankers That that the institution you would think of would play that role as international monetary fund is viewed by central banks There's a fiscal and fiscal agency not a monetary agency and they'll be there. Let's put a play They're loathe to grant Powers that look like money creation powers to a fiscal agency like the IMF So that's that continues to be a problem On the other hand on the other in the wake of the crisis the FSB has acted partly Number one the banking system is much more capitalized than it ever was before because even the bankers recognize the system was way Undercapitalized so I think with or without regulation Increased capitalization. There's been reduced the If you remember the something called the senior supervisors group hardly anybody does But they issued helpfully issued a report in October 2009 saying by the way the risk management systems of the major of most of the major International banking institutions were inadequate to control the risks that they were actually running My reaction was thank you very much It would have been more useful to have pointed this out before the crisis rather than after the crisis But now banks go through stress tests that are burdensome very administratively burdensome and costly stress test Etc. So the notion that the system is no safer than it was before I think is is not Simply to dismiss all that out of hand on the other hand what we've heard. I think on the panel First of all that the That the reforms are incomplete I Think there is a little disagreement Daniel what you said is something the IMF concluded certainly in 2008 which was that the perimeter of regulation was poorly drawn in the systemically relevant institutions financial institutions were left outside the perimeter of regulation that the There was a lack of resolution mechanisms Etc. So and I would say that we would probably all agree that that process is not complete As Andre told us of what needs to be done just to even complete the banking union in Europe let alone to Capital markets union etc. So does that leave as vulnerable to potential crisis? I think I'll bet everybody would agree Yeah, it could happen. They're not gonna say that we've we've solved all all those problems So ways to go At the same time as I say, I think what I what I heard in general was These risks may exist And you can even think of triggers that create those risks But chances are that the near-term it looks pretty much okay And it doesn't look like any official from the official side There are going to be actions that will upset the apple cart although among others Jeffrey has given us some scenarios that That are not inconceivable That could could produce results that are More worrisome than that Now invite my panelists if there are any Final comments that you want to make that we have we have neglected Oh, please One thing you didn't mention is the limited capability of the filler reserve over Possible bailout of non-bank entities because of Dodd-Frank obviously As you correctly pointed out banks are Now more much more capitalized than Of course at the time of the re-emerge crisis, but even in comparison to a few years ago And as I said credit risk taking has been pushed to shadow banking system and He mentioned that black rock covers 5.5 trillion assets and the management I'm not specifically speaking of black rock or any other asset management companies, but if anything goes wrong Which has systemic implications? And yet further reserve will be unable unable to You know address the situation. That's really really a big concern The reserve is now explicitly Prohibited from extending credit to non-bank entity Yeah, I'm gonna say that Yeah, never never say never when it comes to well as I wait, but it's Yes, but it's subsequently been demonstrated. That wasn't strictly speaking true That it was a matter of they decided they didn't need to and therefore they didn't It I always That's totally unfair Tom Baxter general counsel to the New York Fed. He made a testimony to the Congress in 2009 and he specifically mentioned a few episodes and You know If the UK authorities Told Other central banks and regulators that the Buckleys will not be able to buy out Lehman Brothers If they had said that on Friday or Saturday Then the situation would have been very different from what actually happened But I think the UK authorities said at the last moment Sunday, that was too late That's right, you know for AIG if it a reserve created made in made on lane two Yeah, there's turns at the time my what I would say is When when the Secretary of the Treasury asks his deputy What's my downside here if we don't act? What's the worst that could happen and the deputy says mr. Secretary? I have no idea, but it could be the end of the earth Then astonishing amount of other people's money becomes available so we don't find out what the downside is But but but that's but that's no way that's no way to run a railroad Or a financial system, so let it let us hope but as I say My guess is even today most people think the for example the IMF is the systemic firemen And that it must have tools to prevent fires and the answer is no They only have tools to put out fires after they've broken out and not enough and not enough of them correct Fact that was well wait The other way around it was set up Because of the Great Depression But we did have a great recession any rate guys Thank you all very Administratively burdensome and costly stress test etc. So the notion that the system is no safer than it was before I think is is not is Simply to dismiss all that out of hand on the other hand what we've heard I think on the panel is first of all that the That the reforms are incomplete I think there is little disagreement that you know what you said is something the IMF concluded certainly in 2008 which was that the perimeter of regulation was poorly drawn and that systemically relevant institutions financial institutions were left outside the Perimeter of regulation that the There was a lack of resolution mechanisms Etc. So and and I would say that we would probably all agree that that process is not complete As Andre told us of what needs to be done just to even complete the banking union in Europe Let alone to implement capital markets union etc. So does that leave as vulnerable to? Potential crisis I think I'll bet everybody would agree Yeah, it could happen. We're not going to say that we've we've solved all all those problems So a ways to go At the same time as I say, I think what I what I heard in general was These risks may exist and You can even think of triggers that could create those risks But chances are that the near term looks pretty much okay And it doesn't look like any official from the official side There are going to be actions that will upset the apple cart although among others Jeffrey has given us some scenarios that That are not inconceivable That could could produce results that are More worrisome than that now invite my panelists if there are any Final comments that you want to make We have neglected Please One thing You didn't mention is the limited capability of the Federal Reserve over Possible bailout of non-bank entities because of Dodt Frank obviously As you correctly pointed out banks are now more much more capitalized than Of course at the time of the ribbon crisis, but even in comparison to a few years ago And as I said credit risk taking has been pushed to shadow banking system and You know He mentioned that black rock covers 5.5 trillion assets and the management I'm not specifically speaking of black rock or any other asset management companies, but If anything goes wrong Which has systemic implications and Jet for the reserve will be unable unable to You know address the situation that's really really a big concern The reserve is now explicitly Prohibited from extending credit to non-bank entity Yeah, I'm gonna say that Yeah, never say never never say never when it comes to Well as a Wait, but it's Yes, but it's subsequently been demonstrated that wasn't strictly speaking true that it was a matter of they decided They didn't need to and therefore they didn't didn't mind it. I always That's totally unfair. Oh, okay. Sorry. I retract that Tom Baxter general counsel to the New York Fed. He made a testimony to the Congress in 2009 and he specifically mentioned a few episodes and If the UK authorities told other central banks and regulators that the Barclays will not be able to buy out Lehman Brothers if they had said that on Friday or Saturday Then the situation would have been very different from what actually happened, but UK authorities said at the last moment Sunday, that was too late That's right, you know for AIG if it a reserve created made in made on lane 2 Yeah, there's turns at the time my what I would say is When when the secretary of the Treasury asks his deputy What's my downside here if we don't act? What's the worst that could happen and the deputy says mr. Secretary? I have no idea, but it could be the end of the earth Then astonishing amount of other people's money becomes available so we don't find out what the downside is But but but that's but that's no way that's no way to run a railroad Or a or a financial system, so let it let us hope but as I say My guess is even today most people think the for example the IMF is the systemic firemen And that it must have tools to prevent fires and the answer is no They only have tools to put out fires after they've broken out and not enough and not enough of them correct Fact that was well wait The other way around it was set up Because of the great depression But we did have a great recession any rate guys. Thanks very much. Thank you all