[inaudible conversations] [inaudible conversations] >> and not to the prime minister's question time, live

from the house of commons. david cameron takes questions from the members of the house of commons. prior to question can come in the house is rapping about. this is live coverage on c-span2. >> not off the top of my head about mr. speaker. >> thank you, mr. speaker. might i invite my right honorable friend to see how they are helping authorities say 17% on public to care process, increase both contracts are speeding up the payment process. >> mr. speaker, i am happy to do that, but i know what support he would give that company. we have enough public or caravan, which in many places prove out providing work to the government.

we've made some progress but we have much more get to do. >> order. questions to the prime minister. >> thank you, mr. speaker. this morning i had is with ministerial colleagues and others in addition to mickey d's, i shall have further such meetings later today. >> still a pc. >> thank you, mr. speaker. after the prime minister as as concerned as we are because there have been a 42% increase in long-term unemployment amongst young women in this country under her watch. can he confirm the reason why he doesn't have a phd campaign is like a colleague he believes at least it is providing just the girls. [shouting] >> what we've seen is a quite rapid reduction in unemployment over recent months and a million more people in work when i

became prime minister. there's a lot more work to be done in terms of getting the long-term unemployed back to work. the work program is now performing twice as successfully as some of its previous programs in a think she should get behind the programs rather than make the point she dies. [shouting] >> last tuesday, jesse fox, age 17 in my constituency died. there's a reduction of seven night team%. what more can be done to reach the streets and the carnage for the attacks quick >> beaching on behalf of his constituents, what we have to toughen the law and that is make a difference. the most important thing is to get rid of this dreadful culture of people carrying knives and educating you people of the dangers of carrying knives.

so often those who carried down the stabbed with themselves and tragically die. >> that bad. [shouting] >> mr. speaker, does the minister agree with me that decreases the cdma standard, mps should not be worth a pay raise many times about inflation in 2015? >> prime minister, it would be wrong to get a pay rise at a time of the public site or pay restraint. all three parties agree on that. i think we should be clear that what they said is not a final recommendation. let me briefly make three points. first committee atf and 11% pay raise at a time of pay restraint is simply unacceptable. secondly, we need to think again. unless they do so, i don't think anyone will rule anything out. no one wants to go to mps voting on merit pay.

we have to have an income that can build public confidence. in my view, you should be accompanied with a cut in the cost of politics. >> dave miller band. >> mr. speaker, i'm glad he agrees on this issue. does he also agree we should not let it hang around as an issue until after the general election, hanging over politics? i cannot urge you to work with me to find a way on a cross party basis of making us think again and stop this package happening. >> my doors always open open to the rates old gentleman. i'm happy to discuss this or any other issue. i stress the point this is not a final recommendation. i think it's a three party leaders can unite behind the position of saying it wouldn't be right to make this pay raise, to not sure that's the strongest message we can give.

>> mr. speaker, i agree with the prime minister, but i hope he agrees with me that waiting and seeing what worked and we have to get together to deal with this. now come in the reason this is not the right time for this pay rises most people are going to the biggest cost of living crisis in a generation. last thursday to chancellor claimed living standards are rising. bush is not the case, if it? >> let me at one point on the issue of pay. the government has shown respect for the fact that difficulties faced by when we came and we cut pay by 5%. that is not something the party obviously did. he was to get onto the economy. [shouting]

>> i'm looking forward to it. >> the institute of fiscal studies but this clearly. they said we had a great big recession. we've got the biggest recessionary patent hundred years. that would be astonishing if earnings hadn't fallen. [shouting] 's entire persons to be based beauties made the almighty might. why are we taking so long to clear it up? >> mr. speaker, keeping the prime minister -- [shouting] i think we are making -- i think we're making progress because last thursday the chancellor

said the living standards are rising. whichever way you look at it, wages, salaries -- [shouting] calm yourselves. take up yoga, mr. milliband. >> it is inconceivable to suggest otherwise. if the chancellor did last thursday. there is a cost of living crisis in this country. >> when you have called for a marathon, mr. speaker. >> i'll tell you what's been happening over these 40 years.

there's a million more people in work operating in britain. we've got one of the fastest rates of growth know of any major western economy. the truth of our living standards to space, if you don't have a long-term economic plan to get our economy moving come you don't have a plan to deal with living standards. it's working. he doesn't have a plan as he discovered last week for mark byron, more spending, more taxes. all of it because in the first place. >> complacent in the country. that is this prime minister. he does understand that some people are really struggling. today we learned of his plan to

cut the top rate of tax further from 45 cents to 40 cents. kenny just explain a further tax cuts for millionaires but ordinary family is precisely peer >> the tax is higher than many even in the cabinet and government are working on the treasury trying to wreck the economy in the first place. let us compare our records. they double canceled tax. we've frozen it. they present tax 12 times, we've frozen it. we've increased it by 15 pounds a week. the british public know this. if you want to sort out the cost of living, if you want to help families, you need more growth. you need a long-term economic

plan. we've got one, he hasn't. [shouting] >> i'll tell them what happened. all told what happened. >> everyone calm down. i've said it before. as long as it takes, wilco wanted they could shout, scream, but will just keep going. >> under the last labor government, real earnings went up 3600 pounds. living standards. under him, down 1600 pounds. we know how out of touch is a taken it to a whole new level. they're not satisfied with one millionaires tax cuts. they figured time for another. once again, he proves it for the wrong people. [shouting] >> at the end of six questions, we are back to denial.

i know i had a long flight, but i couldn't have written a script better if i did it myself. the president came as the biggest budget deficit anywhere in the world. the last government created a giant mess that this government is clearing up. that is the truth. even since the statement, why can't he mention the fact that my optimism is. a number of jobs is up and pretty soon we've got to do that list. [shouting] >> unemployment is 21% lower. we've had 90% increase in business activity is in a 32

month high. with the prime minister recruits needed to do the hard work of my constituents of people across the country that the government's long-term economic plan is working and delivering benefits to every region of the united states? [shouting] >> honorable friend is right. during the boom years, the number of people in the private sector actually went down. employment is up 25,000 since the election. private-sector employment is up 14,000 this year. i know how much time and effort he puts into things like the apprenticeships ere he held earlier this year. >> mr. speaker, what does the prime minister have to say the

average by 2500 pounds? >> the last thing to say is welcome that there are more women in work than any time in our history. the second thing to say is because we are lifting the first 10,000 pounds people earn out of income tax, they will be better off by 705 pounds. that is progress. does it take time to recover from the mass left by his party? yes, it does. we're going to do it. >> mr. speaker, the disease most feared in this country. the government establishing investment during this parliament. with this week, the prime minister opening the g8 summit on demand cheka mobility now that this country and government side by committing to doubling game in this country's investment is served. >> well, i'm grateful to my right honorable friend.

he's absolutely right this is the real challenge not just facing this country for their six to 70,000 people suffering from dementia and, but the whole world. that's why we have the conference so we can share intelligence and expertise. we can share scientific researcher lynn lessons from each other. this government is already planning to double research into dementia after 2015 and we plan to double it again thereafter. >> given implementation of the credit cards become shambles, how can the public have confidence in those responsible for it? >> first of all, it's absolutely right that we introduce this benefit solution in a very slow and deliberate way. frankly, i remember as a constituency mps sitting in my surgery and the tax credit system cavemen having case after case with people's household

finances completely wrecked by the last labor government. i won't let that happen again. as we introduce this vital benefit, remember the fact that there are 480,000 fewer people in out of work in fits and this government making work pay. [shouting] >> does my right honorable friend agree with me the best way to raise the living standards to rebuild the economy. more taxes by the party opposite. >> the biggest hits of living standards to be up for that spending and firing could out of control and adjust rates for now. that is what we want to avoid. that's why we've got the deficit down. we must continue with difficult spending decisions. that's enabled us to cut the taxes of people working and living. i next see her come with the first 10,000 pounds coming out

attacks, people in minimum wage for full-time working weeks as a parent context though come down by two thirds. that is her election decided people who work hard. >> is the prime minister aware that there's 186,000 pounds a week on average while the other 5 million workers get less than a living wage? three quarters of a million people who can't get a job and give sanction get nothing at all. is there no end to the brutality obstinance of tory britain? >> i would say to the right honorable gentleman who served in labor government after labor government with a 40 feet tax rate minus 45, financer 85 times higher than it is now.

[shouting] >> thank you, mr. speaker. mr. speaker, new figures show the second-largest country in the british consumer allowed by 4.3 billion pounds over 10 years. there is manipulation. will he listen to the federation and this problem? >> i know of my honorable friend's long-standing interest not just in how landlords are treated. let me look carefully at what he said. i'm a great believer that off in the heart of the village and heart of our community and the report damaging. >> during his orders they make a

chancellor said people should expect to spend a third on retirement. the life expectancy in some communities in the country is only 75. what does he think would be a fair time of day for contracts? >> the point my right honorable friend the chancellor is making as they should be a set independently. it is right to set an expectation from time to time. if the point the honorable gentleman is making that we need to tackle health inequalities and we need ring fenced budgets for public health is this government rodden, i would agree with dave. [shouting] >> mr. speaker, was the age of 88, as a teenager whose 31

missions. the inquirer -- [inaudible] >> i would certainly praise all of those who raise money in this way. the story is a truly remarkable one. he's believed to complete over 30 missions in 1944 to 45 before he was 20 years old. it's a real reminder to our generation just how much previous generations put in to make sure we could live in freedom. if some of the greatest privileges i've had to welcome veterans to number 10 downing street and make the announcement about making sure they have the class on their mettle, the mini value so much. as winston churchill said in 1840, fighters our salvation. we should never forget those brave crews in the command.

serbian dance of their lives, so when it is so much much for our country. [inaudible] [laughter] >> i think the prime minister for saving my adage. the newspaper, which you had to report we stay together for 350 pounds a year. but if the prime minister said they must be underpinned by the tax system, why is it that is abolished in 2000? the divorce rate has actually gone down? [laughter] [shouting] >> i'm delighted happiness is maintained in the harris household.

the leader of the opposition tied the knot. [shouting] the tax system moves in mysterious ways. >> and a lack of the call by the leader of the opposition for urgent action in response to his proposal for an increased mps pay, would my right honorable friend immediately retake of the boundary commission report, which will simultaneously pay for an increase in increased the workload of mps to do so? it was surely be the leader of the opposition or the leader of the democrat. [shouting] >> my right honorable friend is tempting me. the point i was trying to make in my remarks as i think cutting the cost of politics has a role to play alongside this argument.

>> we must not shot at the prime minister. it is just produced to keep articulating the man. >> is no good people shouting for the party opposite. they had opportunities to refund the last america once said that. >> thank you, mr. speaker. the prime minister says his attendance at the investment conference has his commitment to northern ireland and its economy. but his weight off is removing just a northern ireland. both the gba and hmi see and the office in my constituency, how does removing jobs contribute to balancing the economy in northern ireland and balance in that region? >> i quite understand why the honorable gentleman makes the point he does. i understand the secretary will be meeting with him to talk about the issues.

as he knows in terms of the gpl it, they are still considering three souls. employment to northern ireland has risen by 32,000 election and i think he knows, as i know, the long-term answer for the economy in northern ireland as the private sector revival. the public sector is large and we need more small and medium-sized enterprises. we need more investment amanita jobs to come, which is at the g8 and investment conference about. >> thank you very much, mr. speaker. my constituent, jack chery, who's completed the national citizen service visited my surgery on saturday. let me know just how much the programs have given him personal confidence and a clear sense of what he wishes to do at this future. what plans does my right honorable friend have for as many young people as possible to

take part in the transformative program which each insert? >> are grateful for what honorable friend said. this is a transformative program. 66,000 young people have been through it in 2010. it's now part of what prince charles wants to see in terms of a decade where we try and get 50% of fathers young people who take part in volunteering. i've members on all sides of the house having a similar experience to my honorable friend but before stopping them and talking about what he sent for young people in their confidence. i think it's a good program and i delighted in total party support. >> mr. speaker, how is the prime minister's trying to confirm if maternity would be included in the benefits pack? >> what is added to benefit cap

is the basic state pension. i think that's important. on all other welfare spending, we have to make sure we are distributing properly between the different sorts of welfare. [shouting] >> 330 new jobs were created in my constituency in the last three months alone. i expect many more new jobs to be created in the next few months, particularly as housing and construction projects accelerate. would my right honorable friend agree it's important that young people don't get left behind and abolishing the shots tax on young people under 21 shows the government is serious about tackling youth unemployment? >> ungrateful for what my right honorable friend says. as the economy recovers, it's vital that it is a recovery for all, a recovery for north and south can be done in old and there's always the danger that young people in the workforce i

left out in a thread the change the chancellor announced about abolishing to make it cheaper can have a real impact in making sure young people can participate in our growing economy. >> mr. speaker, given the fact secretary was left alone he made his statements on the universal credit, is the prime minister still not confident in the university benefit changes? >> i think it's done more than anyone else in british parliament. transformed the debate of our welfare. [shouting] that is what is happening because of the dedication he's put into the issue. we see fewer people out of work. he's introducing a system that of course includes the benefit that labor against. it is make in work paying we

should be proto- to work. >> thank you, mr. speaker. does the prime minister agree with me that the best thing to include the living standards of my hard-working constituents should continue -- [inaudible] [shouting] -- can only be achieved by growing economy. the government cutting spending so our country less dependent means it doesn't have to follow up and pay its bills? [shouting] >> my honorable friend makes an important point, which at the end of the day is this. you can talk how you want to help people as living standards, how you want to keep their tax. the shadow chancellor after last week and all of that is added again. [shouting] do we know something last week. he can dish it out, but he can't take a.

[shouting] >> also you what's going down. his career is going down. that is what is going down. this appointed space. if you had to get taxes done, you've got to make difficult decisions about spending. that is what we've done. but if i were able to cut taxes for as they would have to put them out. [shouting] >> and the current state across the united kingdom in deep despair because they cannot afford a decent christmas for the children. why is that? >> what is happening in our country as we are recovering from the most difficult recession we've had in living memory. it takes time. obesity is a million more people in work. that is a positive development. we see 400,000 more businesses in our country operating. we see a growth rate in our country, which is not the second highest on any major western economy. the job isn't done yet.

it is an halfway done yet. that is why we need a long-term economic plan, which is absolutely blubbered dedicated to delivering. frankly we get nowhere. at the first thing we did was increase spending, borrowing, taxes, all the things that got this country into this mess in the first place. >> thank you, mr. speaker. british aerospace 7000 apprentices at any one time in salisbury in the river valley. what can he do to encourage them to follow the excellent example and take on more apprentices in engineering and science carriers, which in itself will encourage more youngsters to study these subjects in school and universities? >> let me first of all tell you what i've seen in my including high-level apprenticeships and it's extremely impressive. we have to take action at every level and make sure more young

people are studying science and math subjects and that's beginning to happen. we have to make sure setting up apprenticeships is simpler, less expensive. we need a culture where companies want to get involved in this program, including small companies. we also need to attract more investment and that's what is particularly good news hes k., one of the giants of the pharmaceutical industry is announcing a 200 million invested into our country because alongside engineering, life sciences is an area where britain can bring in the global race. >> in syria in late august, the estimates of the conflict was around 100,000. just over three months later, the estimate is over 120,000. we cannot allow this to become a conflict in a faraway land that we don't know anything about. is it not time for the government to urge greater action by the international community and we do care about

the suffering of the syrian people. >> i absolutely agree with the honorable lady who has a long record he can out on this issue in believing as i do that but should be fully engaged enough to work to try and bring those involved in this dreadful war to the negotiating table and sends it to geneva to process. at the same time is back we we must continue to work to do on humanitarian aid to help the suffering. we should also come in my view, and i suspect in her soup, continue to work with this. when a free and democratic and pluralistic future. we mustn't allow the argument to develop that the only opposition is an extremist opposition double the become the case of a stop work at those who care about democracy in the future. >> james deatherage. >> mr. speaker, employment is up. small business numbers are a largely to the impact.

i know the prime minister probably is a bit sick of airports. what he considered the new year coming to celebrate his success? [laughter] [shouting] >> who could address the idea of a celebration in the new year. i might figure out more of what it involves before i fully commit. we shouldn't underestimate the airports and driving regional growth and that's clearly the case. >> despite the government, liverpool will host the international business. why won't the prime minister commit to attending the event? >> will he ensure the state level would afford to the mayor of liverpool and despite a short sleep over in london, the beatles are and always will be made in liverpool.

[shouting] >> having happily visited to beatles museum many years ago, i can actually confirm what he says. i've never had any problem working with the mayor of liverpool and appearing on a platform attempt to advertise the brilliance of that city and i will continue to cooperate with him with all the work he's doing to attract investment into the city. >> abolishing them in churches is one of the biggest wins of british consumers to make it remaining in the union. is the prime minister had the opportunity to discuss its mobile phone feature with the heads of government in the last day or so? >> you could say in a roundabout way and perhaps in my defense you should always remember the television cameras are always on. in my defense day, nelson mandela played an extraordinary role in his life and his death bringing people together.

when a member of the family asks me for a photograph, i thought it was impolite to say yes. [laughter] >> here on c-span2, we will leave the british house of commons. you've been watching prime minister question time airs live wednesday at 7:00 a.m. eastern the parliament session. you can see this question time again sunday night at 9:00 eastern on c-span. for more information, go to c-span.org and click on c-span series for prime minister questions come up plus links to legislatures around the world. you can also watch recent video, including programs dealing with other international issues. >> several live events to tell you about today.

>> it's a rare event in american political life to look at congress in 1901. less than 2% of members came

from working-class backgrounds, got into politics and eventually wound up in congress. it flashed over to the present day, the average congress spent less than 2% of their career doing manual labor jobs, service industry jobs. so this is one thing that really hasn't changed, you know, lots of different aspects of the political process. broadcasts, cable news, the rise in candidate, a politics, while all of this is happening, there's one of the last hundred years or so is working-class people are not getting elected to political office.

>> now come in the financial stability oversight council considers cybersecurity and financial markets. the council, which was created by the dodd-frank lundquist treasury secretary jack lew, ben bernanke and heads of the consumer financial protections bureau and the fdic. [inaudible conversations]

before we go to our regular order of business, i would like to take note that this is the last public meeting for two of our members. chairman bernanke and german chancellor. chairman bernanke will be with us at the january meeting as well, but this is actually chairman gensler last meeting as member of the council. i would like to thank them both for their dedication and service. i'd like to thank chairman bernanke for leadership at the fed during a period of time where his leadership made an enormous difference in the lives of millions of americans. in the aftermath of financial crisis, his boldness and creativity were critical to a pretty a great depression. with respect to the council's work, he's been a tremendous college and made immeasurable contributions in so many areas.

i'd also like to thank chairman gensler for everything he's done to promote stability and smooth functioning of financial markets. jerry has been steadfast in his pursuit of reforms and the ongoing transformation of power derivatives market operate in is a testament to his drive and determination to make enormous progress we have. on behalf of the council, i want to thank you both for leadership and dedication. i know that chairman gensler has asked to make a remark. i would recognize them at this moment. >> i just want to thank you, the secretary, for his kind words. five years ago when the president elect asked me to serve the economy was in free fall in a number of us got together at the presidential transition. but a number of you have much tougher jobs, sorting through the crisis.

marty was dared inside six. since that time, i ain't that we've really come together. the dedicated staff of the council members in each of these have all worked together. i think the economy really is working better. finance is really about one part of the connected economy. the vast majority of opportunity , the vast majority of growth and innovation is on-site finance with me for% of private sector jobs outside of finance. finance us to serve the economy and help markets operate with common sense rules of the road. president roosevelt got that great vp years ago in many of those reforms that the 1930s i success in the next 80 years. that's really what president obama did as well after the craze says that he took on five years ago. what i think it through these

dodd-frank reforms, many of which are and demented. i just have quickly. part of the reformist ensuring the largest financial institutions have the freedom to fail. i got small business in baltimore and nobody was going to come bail him out. i think that is at the core of what dodd-frank is. that's why was so pleased last month when duties, the rating agency removed this uplifting the credit ratings of the lord is bank holding company that is come to be too received a permit back in. that worked with title ii of dodd-frank and although worked the fdic did. his people and bank regulators and supporting everything marty greenberg and before that she lifted. the second thing i think is making sure that there is enough capital in the end.

where is dan? to sitting somewhere. and all these international meetings dan had just been tireless. of course a lot of times people and so forth and making sure there's enough capital of the system under stress tests really worked. i think is really coming to be. we have a new agency finally. richard cordray's key mission is ensuring that consumers are lucked out for. we have all this mortgage reform and we've got everything on that, which is remarkable, all that is done in the mortgage area. chairman shapiro, who is such a partner and friend of mine took on all of the issues of hedge funds and transparency in hedge funds getting the money market report done. there's a lot of reform that way, too. i think because those parts of the spec or service that the vacuum system direct you that that was so important. and working with the fcc, all the work all the work we've done in the trip is market.

$380 trillion market now has some transparency in a. you can see every transaction as it goes through the system. the public can see it. 70% of interest rate sorority cleared. that would have happened without dodd-frank. it would have happened without the icc so forth. sixthly, it we have different enforcement authorities around this table. working with the justice department, we expose the pervasive region inside the interest rate arcade, but all of you have been doing different things around a table that's been remarkable. her annual report highlights it. i think the last thing i know is just this council itself. i was honored to serve in the clinton administration is the one who sent the call to president's working group. secretary traitorous leadership, jack, your leadership the council has come together where we can collaborate and have honest discussions in the day.

even when we disagree, we disagree agreeably. i think the sign of that is just tomorrow if i can predict -- i think that will bring an important role across the line. i thank you. it's an honor to go out coming to be a seatmate, our last public meeting together. again, thank you. >> i don't have a statement. i just want to thank you, mr. secretary for this kind words and colleagues on the council. it's very rewarding working with all of you. i do think the council has served its purpose of helping us work together better and better coordinate efforts and very important as we recognize this national system we have to look at is the whole and the council has been in this holistic approach to oversight regulation.

thank you again. it's been a pleasure working with all of you. >> on behalf of the council, thank you both are just tremendous service. [applause] >> as we approach the end of the year, it is safe to say that in recent months we have seen one of the most act. the financial reporting on the president signed dodd-frank into law. taking agencies but in higher standard and finalize qualified mortgage rules. the council designated three non-financial companies for prudential standards in the federal reserve supervision had the requirements for derivatives for training went into effect to reduce risks of the large previously unregulated market and of course as kerry noted, or hopefully on the full of seeing the volker were completed.

there is more work to do to make our financial system were safer and secure. this includes finishing the final pieces of dodd-frank and imitation, harmonizing reform so they don't pose threats here and create strong protections for the money market fund industry to move forward on a bipartisan basis to attract more private capital in the market. nevertheless, even as we get this done, the financial system will continue. the ongoing effort by its very nature is never finished. will have to keep up the toughest provision in oversight and work aggressively to identify risks and the necessary take decisive action. for today's meeting, we have two topics for discussion. first we're going to start with the important topic, cybersecurity. the question of how the public and there is work together to combat cyberthreat.

as this council highlighted in our 2013 and a reporter, cybersecurity and the broader area of operational risk is growing a targeted focus for the financial sector and financial regulators. ..

>> thank you, in secretary and members of financial stability oversight council for the opportunity to speak today about cybersecurity, the public sector's role and our collaboration with the financial services sector. our experience over the last couple of years shows that cyberthreats, financial institutions and markets are growing in both frequency and sophistication. the changing nature of these cyberthreats prompted this council last year to highlight operational risks and cybersecurity in particular as worthy of heightened risk management and supervisory attention. in response to these threats the u.s. government and the financial sector have come together to identify financial system vulnerabilities, improve the system's resilience and refine incident management protocols. i would like to highlight a few features of this collective effort to begin. first, as is true with other aspects of protecting financial stability, this effort needs to be constant and continuous.

there will not be a day where we can sit back and say that our job is done. some of the reasons why this challenge will be daily are as follows. rapidly changing technology, increasing and expanding reliance by financial companies on technology to perform business and customer interaction functions, the creativity and persistence of would-be cyberattackers and the comb plexty of network architecture. while we've made progress in our efforts to protect the financial system we will always have much work ahead of us. second, a public/private partnership in this area is not only desirable,'s necessary. some of the threats that concern us the most and have the potential for creating the greatest harm are deliberate actions with the intent to cause damage to the financial system. as a result protection of our financial system can succeed only by combining the resources and capabilities of government with those of the private

sector. third this endeavor is about protecting the financial sector as a whole from the largest financial institutions and exchanges to community banks and credit unions. accordingly we work to reach financial institutuions of all sizes and business types. each stakeholder has an important role to play in collective endeavor. i will share with you key aspects of treasury ongoing work of cybersecurity. i will outline the work to partner with other agencies, regulators and the private sector to enhance cybersecurity. treasury serves as the sector-specific agency for the financial sector which means that it play as leading role in policy development and coordinating role in incident response. in this role, treasury has sought to increase engagement, improve coordination and facilitate information sharing on cybersecurity issues with colleagues across the federal government, particularly those involved with national security,

homeland security, and law enforcement. we communicate regularly with senior officials in these areas on matters specific to cybersecurity, both in the context of incidents and on more general operational and policy matters. more specifically over the past year, treasury is facilitated detailed cybersecurity briefings including classified briefings for both the financial regulatory community and the financial sector. on many occasions these briefings have been conducted by experts from other agencies. and the audience has been diverse. market utilities such as exchanges and clearinghouses both large and small banks, insurance companies, credit unions and asset managers. briefings have been held across the country through the help of partner agencies who both made regional offices available and have assisted us in conducting the briefings. we've also collaborated with other agencies especially law enforcement, on incident

response. treasury's role during an incident often is to facilitate the provision by other government age is of technical assistance to financial firms. treasury is also focused on streamlining the dissemination of information that we receive, notably actionable threat information. to that end we're continuing to improve our communication with the broader national security community so we can efficiently receive threat information and analyze, declassify the information as appropriate, and provide a promptly either to affect the firms or to the sector as a whole. this function is performed by dedicated personnel whose task is to share information on a regular, timely basis. they are in continual contact with the private sector's ssi staff which is a critical partner distributes threat information to financial services stakeholders. this participate with the ssisac is a important building block of the public/private partnership on cybersecurity for the financial sector. as i indicated other agencies in

the u.s. government are also active and essential partners this collective endeavor. the basic concept is the foundation of the president's executive order 1336 on improving critical cyber infrastructure. they were to work with the private sector to take steps to protect our nation against cyberthreats. under the executive order we've been collaborating with other agencies to help the national institute of standards and technology, nist to develop a framework to protect our critical infrastructure from cyber risks. the current framework is currently available for public comment and financial regulatory community and financial sector both have been highly engaged in providing feedback throughout the process. the work under the executive order is vital but it is not a substitute ultimately for cybersecurity legislation. the administration hopes to work with congress to insure our laws

keep pace with the evolving threats while protecting privacy and civil liberties. in addition to our work to implement the president's executive order, we also work daily with law enforcement, tell against, and the department of homeland security on cyber issues. first, we look to the intelligence community to provide us with threat and vulnerability information. we work with the broader intelligence community to analyze those threats and share them with the private sector. second, we work with law enforcement and dhs both to disseminate finance information to financial firms and provide technical assistance. particularly in the case of an incident we as the government both to endeavor to be present at scene and offer any assistance we're capable of providing. third, we looked at hhs and other cabinet agencies where events in another sector could affect the financial sector. the superstorm sandy was instructive for cyber maters. a firm will have difficulty

functioning for example, if there is no electricity or telecommunications or if its most important resource, its employees can not get to work. cybersecurity is also a priority for the financial regulators as this council has helped to demonstrate. in at digs to bilateral principal briefings, the council as a whole has been regularly briefed on cybersecurity and other operational risk matters this. was the focus of the council's 2013 annual report. broadly speaking, the financial regulators address cybersecurity through regulation and guidance, supervision and participation in incident response. financial regulators are providing guidance to financial firms concerning appropriate governance mechanisms, information security procedures and testing, adequate backup systems, and emergency business continuity and recovery plans. an important goal of these activities is to ensure that each firm under supervision has adequate policies and procedures

in place to protect itself from cyber attacks and potential consequences. for example, the federal financial institutions examination council, ffiac, over the years established uniform principles and standards for the examination of financial institutions. the examinations rely on manuals developed by ssfiac for this very purpose and on other relevant literature including publications on information security standards by expert agencies such as the department of commerce. earlier this year the ffiac convened a working group to look at updating its approach to supervision and examination specifically with respect to cybersecurity. another example of activity in this area is the securities & exchange commission 's proposed regulation sci. as the council appreciates cybersecurity is a complex subject. given the nature of the threat and its potential sources it can be addressed only through a

whole of government approach combined with a strong public/private partnership. that is both the essence of the president's executive order and the summation of our collective efforts. we have made substantial progress with our government and private sector partners to organize the protection of the financial system, however, cyberthreats are here to stay and we must continually remain vigilant to its ever evolving character. thank you for the opportunity to address this important issue before the council. >> kelly. >> thank you, cyrus. thank you, mr. secretary, for allowing me on behalf of our industry to be here today and thank you for all the council members if for allowing this privilege. may i take personal privilege extending thanks to chairman bernanke and chairman gensler for your outstanding incredible leadership of our industry last several years. we really appreciate it. the world has changed. it is not going back.

we have made progress. we have have a long way to go. cyber risk is increasing in pace, complexity, potential impact. it has moved from fraudsters to hacktivists causing disruption and nation-state threatening serious manipulation and destruction. so a really big risk. we have to mitt fate all the risk. what has been done? over last 18 months our industry is coming together to do a number of things i would like to share with you briefly. richard davis, chairman of u.s. bank and i co-chaired a effort to try to raise level of awareness of bank ceos in the country from level in ahn honesty 18 months ago was not heightened as it needs to be to a level where it is far from where it has to be but much more advanced than it was. frankly we're making progress. the attacks we've all heard about has done a lot to raise attention to everybody's regard in this area. in last 12 months we have had three cybersecurity summits.

treasury worked closely with us to pull toes h those together. we have industry participation, from financial services coordinating council, sifma, tch and others. also mr. secretary, had very good support from the ffiac cybersecurity critical infrastructure group. they have done a nice job as well. so we've been able to so far develop a comprehensive plan that has 60 deliverables of in five areas. these plans are to enhance information sharing, improve analytics, enhance crisis management and resiliency, improve core components of cyber ecoand r & d and improve executive communication and advocacy. three areas you may be interested in where we're making really good practical progress is, one is what we call internet top level domains. so the ican which controls the international allocation of

domain names about a year ago made everyone aware it would be allocating some new domain, domains that could be controlled and so the fsr in working with the a about a has been working very hard to control the internet domains for dot-bank and dot-insurance. it may not sound like a big deal but it is a really huge deal today because everybody's bank information, insurance information travels over the dot-com network which is a really, really broad network. think about it like a 24-lane highway with a lot of people going 90 miles an hour. a lot of chance for problems on that type of scenario. this new, much more controlled domain will allow it to be more like a four-lane, well-controlled access highway so that your information will be shared in a much more traveling and much more confident aol and secure way. also, making substantial dollar investments in something we call information-sharing through

fsisac which is an organization which works works to share and analyze information between institutions. what we're basically doing there is dramatically increasing capacity of ffisac to make available information to all of the 14,000 banks and credit unions around the, around the country because today the information is moving snail pace when we get it and in the future it has to move real time. so we're really happy about that. we're also simultaneously investing a lot of money in developing what is called a secure cloud whereby in the future your credit card and debit card payments won't be as, insecure in some cases as they are today because while it is fairly complex, effectively your information will never be disclosed to the merchant. it will travel through a cloud and no one outside of the banking industry will actually control that information. so these are three important undertaking that i think substantially reduce the risk and make a nice step in progress

towards where we need to go. we made progress in recovery and resiliency efforts. sifma and fsisac developed a simulation they call quantum dawn two which is a massive simulation to structure what would be a cyberattack. 500 individuals and 50 organizations were involved in this over a long weekend. fsisac developed a simulation called systemic strike which simulates a cyberattack in the payments area which is very effective as well. we've made really good progress as has treasury working with the president's executive order and policy desk tiff. we were -- directive. we are proud we were most engaged in the development of the cybersecurity framework that cyrus referred to. we've also made some really nice progress in exposing the ceo's of the banking industry to kind of the threat available. secretary of treasury was kind enough to hold a briefing in march here at treasury that

really was an eye-opener for ceos in terms of risks really out there and the roundtable at fsr conduct ad really comprehensive exposure for the ceos in september and so we're making a a lot of progress in terms of pulling the industry together, making everybody aware and frankly investing a lot of money on behalf of the industry to develop mitigating capabilities but we need help and if i may humbly did for some help to the industry, mr. secretary, from the council, we need to continue to improve. as cyrus said these risks are huge. they're getting more substantial every day so we have to improve every single day. we need help in terms of assuring the private sector and key government agencies are really cooperating. so we need to have more coordinated information coming primarily from the intelligence agencies through treasury. or it could be through fsisac, more likely treasury through the

industry to effective use it through mitigating these efforts. we need help in terms of declassifying more information so that the information can be gotten to the banks on a more timely basis. this is by the way a very important point in the president's executive order that when carried out will go a long way to reduce that risk. we need to enhance the level of support from the telecommunications sector. what really happens in these attacks is, as all of this information comes in from these attackers, it comes in obviously through the internet, through the telecoms and really many cases the telecoms and to some degree other service providers are only ones that can really filter the malicious data and reduce amount of data coming into the banks. the banks can't really shut down because then we would be shutting down our support for all of our clients. so we really need their help in terms of just filtering out a lot of this malicious data which they have the capacity to do. we need to work with government

agencies, particularly treasury and dhs to expedite security clearances. we need more people in the industry that have the proper level of clearances so that we can be given the information so that we can do a better job of protecting our clients and mitigating the risks. we would suggest that we continue and expand briefings to the industry for ceos and the chief information officers of these institutions so we can build a support and have the mechanism already laid in place so that when and if catastrophe event occurs we'll already have channels established to be able to take care of it. we need to all work for a closely not only with large banks which i represent but also the small banks and as i say, there are 14,000 small banks and credit unions out there. they really do not have the capacity today that many of the large institutions have to be able to defend themselves. so we need to have a collaborative effort to work with the intelligence agencies, the regulatory agencies, and the

telecoms and service providers to provide, i think, a protocol that can be developed that will allow to us somewhat standardize and make effective a way for small banks to have reasonable defenses because we do not want to expose ourselves to the risk that a perpetrator could gain entry at weakest point in the system so that is really, really important area for us to focus on. we need to continue to support effective cybersecurity legislation. we need to focus on information-sharing that provide liability protection for good-faith information sharing. we have today real limitations from legal point of view in terms of banks working together to share information and that needs to be clarified legislatively. so i want to thank all of the council members and the government agencies. everybody has been great. everybody is working really hard, helping us a lot. i don't want any of my recommendations to imply we haven't had great support. everybody is working really hard

and giving us great support. i would ask that the council consider forming a task force team led by treasury to include the fsioc members and key government agencies, intelligence, dhs, telecommunications regulators that can really help this comprehensive battle. i said the world has changed. unfortunately it is not going back. we have a long way to go. we're in this together and we have shared goals and working together with the shared responsibility we can in fact mitigate the risk and make it a safe place for our clients to work in the future. >> thank you very much, kelly. thank you both cyrus and kelly for those presentations. i would like to thank the staff of regulatory organizations to dedication to this issue and work of financial banking and information infrastructure committee and private sectors committee that have been working on this i have been deeply involved in this coming here. frankly i was involved in

cybersecurity issues before i got here. what is striking when one meets with, either agencies or bankers, doesn't matter if you're small, medium or large, this is an issue that is foursquare on your radar. i think that we have made progress. we have more progress to make. we do need to work on making sure the right people have the right clearances. that we have information flowing moot smoothly where it needs to. i think the point you made, kelly, is very much the case. we need legislation. some sharing goes beyond what we can do through through the executive order. we're trying to work through the limit of what the executive order permits. i would like to invite for a few minutes for members of the council if there are questions or comments. and tom? >> thank you, secretary lew. as chairman of the ffic which consist of federal reserve system, fdic, ncua and state members of state liaison committee i thought it might be

helpful to briefly update the council on some of the action that the ffiac has taken and is directly responsive to some of the issues and needs identified by assistant secretary mokri and mr. king. as cyrus noted earlier this year the ffiac did establish a cybersecurity and critical infrastructure working group and the primary goal of this group is to comprehensively assess, analyze, examine security and resilliance of financial institutions and technology service providers and to provide a mechanism to liaison with the fsoc and other governmental entities on this important topic. one of the primary objectives is to review current regulatory examination and supervisory guidance to identify and address gaps. one of the key issues mr. king has highlighted. as you may know the ffiac has a long history in coordinating regulatory and supervisory

policies related to information technology, business continuity planning and recovery and has well-established programs for coordinating examination work of bank technology service providers. so i believe it is particularly well-suited for this important task. other objectives of the working group include training, identifying the and addressing relevant skills and knowledge needed by examiners and gaps in examiner training. awareness to develop external outreach initiatives to increase awareness among all financial institutions regardless of size. information sharing, augustmenting and maintaining relationships among members agencies to enhance information sharing and collaboration and incident communication and coordination. serving as communication and coordination channel among our members in response to domestic and international incidents capable ever impacting critical infrastructure security. these latter two areas i think

regarding information sharing are areas where i believe we could greatly benefit from treasury's efforts as the overall coordinating body for the u.s. financial sector on cyber issues. and i would also note that the ffiac is committed to sissing smaller financial institutions in meeting cybersecurity challenges. this is why much of the initial focus of the ffiac working group will be geared towards assessing how prepared community banks, credit unions and their critical service providers are to identify threats and vulnerabilities, protecting themselves and their customers, mitigating risks before attacks occur and to respond to and recover from cyber attacks today and into the future. and how well we can assist them in this vital process. the working group is already developing plans for additional education and materials for community banks in conducting aforementioned risk assessment to help identify gaps where additional training, guidance,

resources may be needed and i also want to recognize and thank my ffiac colleagues and their staffs for the support that they are providing on these initiatives which are in addition to their independent work that they do, supervising the respective institutions in the information technology area. and finally, i want to underscore the observations made by both cyrus and mr. king that cybersecurity is an ongoing issue that demand close coordination and partnership among all of the agencies in various private sectors including the critical role in the link of the telecommunications sector and various financial market utilities and again, i think this is another area where treasury and f zock can play important roles. thank you. >> thank you. are there other comments? if not, would i ask that we move to the next item on our agenda and thank cyrus and kelly for those presentations and for making this an ongoing effort

because it truly is an ongoing issue that we have to deal with and keep dealing with, thank you next item of the agenda head of office of federal research, director dirk burner to provide a recent review of research and analysis. >> thank you, secretary lau r lew. i appreciate the opportunity to report progress on three initiatives. first i will describe tools we use to assess and monitor threats to financial stability. i will report on our assessment of those threats and relate them to key themes in the council's 2013 report that was released last spring. second i will report on financial data priorities and preliminary rewe've done with granular data and report on standards and data initiatives important to us all. let me focus on the analysis and monitoring of current threats to financial stability. we at the ofr are developing a

new tool, if you will a heat map to monitor threats. today we have version 1.0 of that tool. in it we analyze five functional areas of risk. they are, macroeconomic, market, credit, funding and liquidity and contagion risks. we think this functional breakdown is best-suited to look at risks across the financial system. we quantify these risks with a mix of economic indicators, market indexes, and measurements that we calculate. like any summary measure this one has limitations. three of them are, first of the metrics that we employ in this heat map are largely contemporaneous. we will incorporate new forward-looking indicators into this framework as they are developed. for example, the connection between volatility and leverage may offer insights to construct forward-looking indicators. second, data alone may fail to capture emerging risks so we compliment the monitoring tools with qualitative market

intelligence. and last, some risks are currently hard to measure. assistant secretary amir-mokri and mr. king mentioned operational risks is clearly one of those. there we start by applying judgment but we'll work to develop ways to better quantify these risks. informed by this signaling tool we identify a range of potential threats to financial stability. several are similar to the counsel's annual report. three are familiar in fact from that report. first the threat of runs and fire sales in secured funding markets such as repo markets. second, exposure to a sudden, unanticipated rise in interest rates given still high duration and complexity risk and high fixed income portfolio allocations. third exposure to shocks from greater risk-taking in a low volatility environment. we also discuss a related fourth risk. that is from a sudden shock to market liquidity. these risks are obviously closely related and they often

occur together. our analysis is aimed at identifying not just their symptoms but also their causes. let me conclude this section by briefly mentioning our work on asset management of the as you know we delivered a report requested by the council on the activities of the asset management industry. this report is intended to be an overview. it's aimed at informing the council's analysis of how that industry's activities could create threats to financial stability and of data gaps in measuring those activities. next i want to give you a brief update how we're filling data gaps and mention some results of our data research. our process for addressing data gaps has three parts. first we identify data needs. second we catalog existing data to determine where the gaps may be. and last we priority ties and fill gaps often in collaboration with member organizations. that reflects needs for

monitoring some of the risks i just described. to repo markets and other security the financing transactions including securities lending. i'll mention preliminary results in three areas of research using recently-available, highly-granular data. these results, as you might expect, largely confirm your intuition. first is econometric of money fund metrics in eurozone names which suggest that portfolio manager rebalancing not investor redemptions drove exposures last three years during the european sovereign debt crisis. secondly, analysis of activity in the sovereign default market suggest bankses are market makers and hedge funds are buyers of protection. more work is needed to assess both sides of that market. last we analyzed hedge fund leverage using data collected under form ps. this preliminary work suggests that hedge funds leverage

inversely proportional of their holding of hard to value assets. those considered level three assets under accounting rules. that is good thing at least on a preliminary basis. let me conclude with brief comments on promoting data standards. i know you all agree that data standards are important. we are making needed investments in their development and in their implementation. i focus on them today because much more work both on development and implementation is needed and deserves your support. as you know, data standards are essential to compare, aggregate, link and analyze data. their adoption will improve data quality and reduce collection costs and duplication. we've develop ad framework for creating and promoting data standards. not surprisingly a key conclusion is that to be effective, standards should be adopted universally. that is worth repeating. we all need to use the same standards or translate one set uniquely into another. two key data standards

initiatives are well-underway. first, the global legal entity identifier initiative is a signature effort in that regard. lai enables precise identification of parties to financial transactions. with collaboration from primary regulators some of whom are members, most of whom are members about council we're seeking and from the industry and we're seeking broader implementation of lai in u.s. financial reporting to sync with efforts going on abroad. second, universal mortgage identifier or umi has long been needed. inneragency collaboration on that effort is paying off. with input from industry and several help from agencies here we publish ad concept paper. the paper discusses characteristics that umi should have and criteria for implementation. in both cases industry participants strongly favor the use of standards to help make their internal data and their reporting activities coherent and efficient.

our standards initiatives cover a range of other data quality issues. two other examples involved extensive collaboration across councilmember organizations. first is adoption of best practices for classifying and applying like controls to like sensitive data so that we can better share them. and second, to collaborate in this case with the cftc to use standards to improve the quality of data collected from trade repositories and swap data repositories. that also extends to the sec for security-based swaps. those are my remarks and i will be happy to take any questions. >> well, thank you, dick. i would ask if other members of the council have questions for dick on the ofr work? i think its important work that ofr does. it's a new body that was created out of dodd-frank and the report that is going to be issued we look forward to and we'll be

reading it with great interest. i guess i would ask just one question. to the extent that you have now a body of work behind you, does it give you a different view in terms of what kind of risks we need to be analyzing are? ofr was designed to create a mechanism to support this council's work in kind of thinking, a little bit outside of the box, looking ahead at the risk that is might not come through each of the independent bodies independently. so just ask you the question, what are the things that you took away from the experience you've had with ofr as being the most important takeaways? >> well, as you know, there's a lost important work going on across the council to assess and monitor risks and i think our job is to fill in the gaps between the work that's going on among the agencies and to look across the financial system along with other councilmember

organizations and agencies. so some of the work that we're doing that relates to the these granular data and looking interconnectedness is i think really important. looking at some of the risks, operational risks in the plumbing of the financial system are important and we're starting to do some work in that area along with others. and looking at how the connections in liquidity and funding. i talked a lot about those in what i just mentioned. i think that the connections between and among institutions and market participants are really important. so it's the connections across the financial system that i think we need to focus on and that really enables us i think to look at the system as a whole. >> well, thank you. and if there are no further questions, i would just close with a matter of, kind of housekeeping business. i look for a motion to approve

the resolution of the minutes from the last council meeting on october 31st. >> i move. >> second. all in favor. minutes from last meeting are approved. and with that i, unless there are other items that anyone would like to raise, i would ask for a motion to adjourn. >> so moved. >> second. >> second. >> i look forward to seeing everyone at the next meeting of the council. thank you. >> and we're live now with a conversation with commerce

secretary penny pritzker. she speaks this morning with "politico"'s correspondent mike allen on the administration's efforts to create jobs and economic growth. miss pritzker was sworn in as the 38th secretary of commerce on june 2 this year. live coverage on c-span 2. it should get underway in just a moment.

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[inaudible conversations] >> again, we're waiting for remarks from commerce secretary penny pritzker this morning on the administration's efforts to create jobs and economic growth. interviewing here be "politico"'s white house correspondent mike allen. miss pritzker by the way was sworn in as the 38th commerce secretary of the u.s. earlier this year, june 26th of this year. >> thank you for joining us for this playbook breakfast. we're very excited. we'll be hosting the commerce

secretary penny pritzker, lived a fascinating life, has started companies, has run companies and is now companies here and growing companies here in the u.s. before we get started i would like to thank bank of america for this fantastic series of conversations. we've had amazing year, different parts of country, people from all across the spectrum talking about the issues that matter most in washington. so we're grateful to the bank of america for making this great series possible. now, i brought along my twitter machine here that will take your tweeted questions. so first of all, good morning to those in live stream land and if you have a question for us please just tweet it to #playbook breakfast. it will pop up and i will ask it. without further delay here is the commerce secretary, penny pritzker. good morning. thank you, madam secretary.

[applause] >> thank you. >> so i have a little bit of a, little bit of an extra friend here. some of you know broken ankle bone by, working out. so working out will kill you. but i am getting no sympathy from the secretary because i found out she twisted an ankle run time and ran an "iron man." >> yes. >> how do you do that? >> the alternative, i was halfway through the race was to stop and quit and train it again and do it again or persevere and i decided perseverance was going to be my objective because i was going to have to spend another three months to try to train and complete an iron man. >> very practical. secretary pritzker decided to move here to washington and officially in the northwest d.c. house. news this morning.

playbook we always start with the news, last night's budget deal people are saying may be a sign that the capital is freezing. top member of the economic team, somebody who is the lead face for business in the administration, how much hope is there this actually is the start of something new or look more like an anomaly? >> you know, i'm an optimist so i think this is very positive news. regular order is something that's really important. and frankly it is very hard to run the government without a budget. just running a department, how do you know what you can and can't do if you don't have a budget? so this is really positive and i'm hopeful they can come to resolution and we can move forward. >> and what does the administration hopes that could grow from this? >> i think that if, if, regular order really takes hold, there's so much that we have to do. we have a very full growth

agenda. whether it is around immigration reform, investment in infrastructure, our trade agenda. there investment in innovation and our national manufacturing initiative. there is so much that we want to get done and this is, you know, a first step. >> so last question, on this, this assuming this deal gets passed, looks like it is going to, come back in 2014, what will be different about the relations between the two ends of pennsylvania avenue? >> i think that you know we have a lot we want to get done and i think there's a lot of commonality of purpose. i certainly know from during -- i've been in office a little over five months. i've met with over 700 business leaders and i know what they want, they want more certainty from government. and they're quite clear about that that, that's