>> jenny hartley emeritus professor in london has published three books on charles dickens, the most resent one a very short introduction by oxford press. we asked dr. hartley to tell us about dickens life in 1842 and 1867. >> author jenny hartley on this episode of book notes plus. listen at c-span.org slash podcasts or wherever you get your podcasts. >> good morning, i'm david wessel, director of the hutchens? are at fiscal policy at brookings institution. i'm very pleased to welcome mark carney. extraordinary is an overused word, but mark carney's

resume', you must think he's 90 years old. and he's from canada and motto is perseverance. he has a ph.d. from oxford, 13 years at goldman sachs, a decade in the canadian government, five years in the central bank of canada during the global financial crisis and because that wasn't challenging enough he became governor of the bank of england from 2013 to 2020 during the whole brexit mess. he's now an advisor to the british prime minister on climate finance, the u.n. special invite for climate action and finance, vice chair of brookfield asset management, the future prime minister of canada and only 56 and i'm not going to deal with his collegiate hockey career. mark must have decided he would

only write one book in his life. so his new one, "values, building a better world for all" is a really several box in one. it's a discuss of money, what mark can and can't do well, a primer on climate change and lessons in leadership and then some. i'm probably one of the few people that read all 20 paragraphs of the g7 finance minister's communique that came out over the week. i think that mark carney's book has a briefing on all of those 20 chapters. we're happy to have you with us and as people know if you want to ask a question, type it sli.do, #carneyvalues, i'll try to get to some. i thought we'd start with the provocative and interesting title of your book, which is values with a parenthesis.

and it's markets and values, which has to do with our moral being. it's market driven, but not market control. >> thank you, david. thanks for having me and thanks to brookings for putting on this event, but really, for all the great work that you do. been a huge consumer over the years and beneficiary and hope to. and you and i read the g7 communique and we pulled some of that out and not sure many did, but many people will be by that communique and underlined decisions than before. i'm sure we'll get to that. thank you for going straight to the title because the

paranthesis is there. and this is a point that goes back to adam smith and i think most political philosophers and-- political economists i should say. in the end, most economists would recognize a role for regulation and also a role for her institutions in the sense of douglas norris, which is are customs and rules, that support good market functioning, but we've lost some of that. there are other mistakes in regulation, but we lost some of that and the balance went out and that's one of the contributory factors to the financial crisis. the next relationship between value and values is, i just simplyfied, and described it all to michael sandahl. the marketization of aspects of society so there's the effort

to bring in certain elements of activity, whether it's charitable activity, volunteering, i can go on, but in effect, bringing them into the crisis and in that process, depending on the activity, if that there could be a corrosion of the values and corrosion of incentives and it's counterproductive. that's not the core element of the book it's an observation which i needed for completeness. the third aspect is when value can deliver societal values, in other words, the market delivering societal values and really what i'm getting at here, i'm sure we'll get a chance to talk about it in terms of climate change. as we move off the climate, as opposed to the economist, there are certain societal objectives that become a focal point and i argue we're moving to that

position thousand with sustainability. then the market properly involved with the right tools, will be the driver of delivering those solutions. so, values delivering societal values. so, yes, the book -- there's a lot in the book, but it's trying to capture those elements and using the experience of the crisis that i lived through and others of course, on this webinar will have been active participants as well over the course of the last 10, 15 years. >> do you think if you had to look at the needle, are we too far towards the market or too far towards the moral imperative at the moment or is that not so simple? >> well, i think we were -- we were -- and i lived through this as a policy maker, we're too far to the market in the run-up to the crisis, the global financial crisis and it was an era of-- i don't think it's an overstatement to say that market fundamentalism. and the capture of that, if you

will, as well. where the answer to market failures was generally to create new markets. market failures were missing markets and brookings, i can use this shorthand to say it was an algebraic worlds and we had missing markets. of course the students know that there's a lot of fundamental assumptions that go underneath that perfect competition, a commodity goes, et cetera, most of which don't exist in the circumstances. you also had-- and this is the real balance for policy makers, you had a belief as the scope would way, it had nothing to tell the market, only to listen and learn and divine the lessons of the market. and so, there was the, you know, clean not lean approach in accept-- in central banking and there were other aspects that were there and very little--

lots of reassurance of the market must have it right or something like subprime was unlikely to-- it wasn't going to happen, as opposed to-- if it had happened, what would we wish we had done in that event. in that case we definitely had the pendulum wrong. i think in the case of something like sustainability, i'm not sure that we -- the issue with climate change or the tragedy of commons, of course, of market failure could be fixed through a carbon and other factors and something that we're more comfortable with. i tried to argue over the years that there's also a tragedy as a horizon in that, we're discounting the future quite heavily and by the time it's a clear and present danger in terms of physical impacts of climate change, it's too late to take into account. so the question is, how do we change that?

but in the end, that's a question of, it's a political -- it's a small political question, which is does society value sustainability and until we get to that moment, the market isn't fully going to be in service at that value and nor are regulators, we may get into this more and i'll take the opportunity to say this, which is that what we very clearly did six years ago in setting up with mike bloomberg is part of the g20 process, but really a private sector process. >> and that's climate. >> yes, task force on climate and financial disclosure, a standard for companies to -- it's not a standard, it's a recommendation, voluntary recommendation to disclose not just the current carbon footprint, but what are the risks going forward and what are they going to do about it. and that was just to provide to

make a market in transition. some people thought it was an issue, some people didn't think it was a you shall a, that you can have a market. some who thought it was an issue thought that governments would ultimately act and some who thought it was an issue thought governments wouldn't act in the end and therefore, this would ultimately end up in a reasonable horizon. now, that shift. as you roll forward to today, know the to the same degree in every country, but in many, many countries and a lot of them around this, the countries actually say, no, we are going to move to net zero, it's a legislative objective. we're having a carbon crisis, sitting here in canada, legislative going to-- even though it's canadian inmo, it's a lot of money and that brings forward in the future. that's a long way in answering your question in terms of the values, but those values in the end are determined by society and you need that process, but

if you do, and i'll finish here, david, this is where, you know, i spend a lot of time with people who are very focused on the environment, not surprisingly given my role, they tend to far too heavily discount the market and underestimate the power of the market if it is focused on, you know, on finding solutions to an issue, even as one as big as climate change. >> i want to get back to climate change, but i want to talk about the nature of money first, and particularly, your thoughts on the fixation that a lot of people have with cryptocurrency and what the potential and the risks are and i noted that the g7 says they tend to be warming up to the idea of central banks and liquid currency and settlements and so forth and seem to be down on any rush to global

stable coins, facebook, and a better regulatory thing. so put this moment of cry cryptocurrency in perspective for us. what should we do to make sure it has more positive than negative aspects. >> yeah, i thought it was particularly eye-catching as well in the communique and all of that and so let's take a step back. i mean, we're in a time of proto competing currencies. the facebooks effort called dm i guess instead of libra. which is a stable coin, but the idea is that it's a crypto instrument backed one-to-one by the underlying assets, if it's the u.s. dollar and backed one-to-one, ideally, this is a key point, ideally not just treasures, but liabilities, you know, safe liabilities in u.s.

dollars that matches the maturity of money which is instantaneous. i can think of one place, the federal reserve and i didn't think of anything else. and one mismatch. while i'm on that topic, history shows, bank of amsterdam being an example in the book, and a mismatch of the stable coin, which the bank of amsterdam was, and how credible is that instrument? >> and what-- >> 1600. and ultimately they become a stock because not running just a mismatch, but they lend to the dutch east india company and realize that the bank of amsterdam bank has a risk when they were backed by the gold and silver there.

there's lots of concerns with stable coins and that's one of them, which is in the end they'll get a new cfo and new treasurer and money for nothing type approach and in the end, why wouldn't you just have as the central bank, if you're going to have a stable coin, why wouldn't you have your own stable coin which would be a central bank digital currency that is tokenized. there's other forms, which is account based which is where i suspect this will go. that's -- the coin text of what's happening we have a currency competition basically running up so a series of crypto assets of varying degrees and varying purposes. and most of them are not money and some of the most interesting ones are those that are solving specific gaps in the payment system. so, some of them are for

wholesale finance, a morgan coin and getting efficiencies there and they're doing it in a way that actually serves a role. so, i think it's a legitimate question, whether-- or legitimate possibility that those will continue to play a role. some are trying to play that role on cross boarded payments and fees, i think in the end, the central banks can get to a position where they'll solve that issue, but we'll see. some, and it has to be said, and we've seen the examples in recent weeks, like bit coin, there's a gap in the payment system, it's called ransomware, i mean, it literally, that's one of the gaps. that's not a gap that we necessarily want to close, and so anyway, you get the point. so, there's a -- and these are questions of the values underlying money. we need something that's resilient. we need something that's transparent, and it also needs,

key point, an adjustment mechanism so that fairly shares the burden. for example, the gold standard and talking about the gold standard in the book and you're a student of it, i know. it was ultimately by too much weight of adjustment on labor in the end. you put all the weight and that's always one of the risks in the euro as well. where do i think it's headed? i think we'll have central bank currencies, more likely to be account based than token-based. and i think they'll likely, hopefully, i should say maybe, that those central bank currency, there will be efficiencies in terms of cross border, the linkages to the cross border payments will come down and most won't see the cbdc, they'll see the wallet from the bank or the fin tech company and that will be interaction and we'll still

have a lot of inside money, created by the private financial institutions which will be interesting. but there will be in parallel private monies or native currencies for specific applications that are legitimate gaps in the payment system used by a subset of users and the interoperability will have to be established there. >> so an account-based central bank currency, but i won't have an account in the fed. and i'll have an account with the bank and the bank will essentially have a digital account with the fed. >> exactly, just as today, it will be interesting, it won't just be the banks that have those accounts, and by the way, i'm more confident this is what will happen in the u.k. and other places, and maybe i shouldn't try to speak for the fed, but it could be, look, it could be the instagram wallet, it could be fin tech, some

other basing, and they need that account up-top as well and the settlement is across the account. there's no settlement risk, it's across the account of the financial institutions at in this case the bank of england. >> i see and the advantage of that is, efficiency in commission? >> it's sufficiency-- it's efficiency. it is, as i understand it, and you know, i'm not the one doing the program, but it is also potentially programmable, ie programmable for contracts and other applications and contingent contracts in effect. and like much in this area, it's pretty nascent. >> and the currency-less society in a decade or two? >> think of the people you know

and maybe you're suggesting i'm younger than i am. i am 56, but i know a lot of people who always will carry cash so i always said when i was governor in the u.k. was we will, you know, continue to produce bank notes as long as people want them and i think, you know, we've got a few decades where it will be a residual. >> okay. so, let's turn to climate and i think your basic argument is that if we're serious about resisting climate change and you think we are increasingly serious about it, that there's a growing political concensus that doing nothing or doing as little as we've done so far would be a huge mistake, and a disservice to our children and grandchildren and your basic argument if i get it right, you want to bring climate risk and resilience into the heart of financial decisions. so, tell me how that happens.

how do you get companies and banks and insurance companies and consumers to fully internalize the cost of our behavior, which is contributing to fossil fuels, and the green house gases? >> yeah, so, one of the key organizing principles for this is net zero. what happened with climate change, this has always been understood. it's been understood for a long time that we can't stabilize the temperature, whether it's at the stretch objective of one and a half degrees or at three degrees. we can't stabilize it until we get to net zero greenhouse gas emissions. >> and you need to define what net zero means. >> net zero means that the emissions, any emissions that exist because of not just human

activity, human or agriculture or other activity. those are removed from the atmosphere, so there's some net process, and the two obvious net processes one is forests, while they're growing, so new forests while they're growing and remove net once you get to the height, you're net awash, and carbon cab capture and storage of some. you have to get absolute emissions way down in order to be able to net out whatever you're still doing and the point is that the temperature is the physics of it, it's a function of the carbon in the atmosphere, greenhouse gases. so the organizing principal principle of net zero, 130 countries and counting, net zero is our objective.

glasgow this cost, we're trying to net zero, u.s. has joined and china made its commitment and trying to get a few other emerging economies in there. it's 70 plus of net zero. and boils down to if you're a company or financial institution and you operate in these jurisdictions, what's your plan for net zero? now, you can have a plan, well, my plan is -- there are three options in that, one is, i don't have a plan because i don't think the government policy is credible on that this will actually happen for whatever reason. that's an option. maybe some issues with stake holders, employees and you may be surprised, but that's an option. the second is, i don't think i can get to net zero or i'm in an industry in a recalled would that's moving to net zero and i'm going to run off my business. most people don't choose that,

but i'm going to desist certain activities over 20, 30 years and most seem to be thinking, i'm committing to net zero by 2050, putting in place a plan that by 2030 it will be at this point and here is what i'll do and now you're moving into a financial system, which is getting that information. tcfd is related to this. it's not the same as a net zero plan, but it's related to this and the financial system, you have this information. you're judging companies in terms of whether they're likely, you know, do they have a plan? are they likely to succeed with their plan? are they going to be competitive in a world that's moving to net zero with, if not a rising price on carbon, tighter and tighter environmental regulation and more and more competition from low carbon technologies in their area and then that is a decision point on value. that's an influence on company value. and not just in the extremes of

renewable versus coal and heavy oil, but all the way down through, you know, moving into the core of the system and that's what's happening now. and to, you know, for those who may not follow it closely at president biden's summit in april there was announce of a new alliance, which is the core of the financial system, insurers, pension, et cetera from around the world and 70 trillion dollars of assets, which even, you know, for bookies in us is a huge amount of money, committing to net zero. committing to have plans for their own assets and manage their balance sheets in that way. last point, if i may. there are ways to, now, build this out, stress tests, other things to make this tangible. what is critical in building a system is that the incentives

are this to finance the transition. in other words, the incentives are there, so that i would invest in a company who may have high emissions today, whose emissions might even go up for the next few years, but by lending and investing and giving them capital for a period, that those emissions are going to come down over time and avoid what we want to avoid is a very-- on the surface, satisfying, sort of binary approach. there's green assets and brown assets and get rid of the brown and just go to the green. well, that's not a transition, that's wholesale investment and that won't get us to where we need to go. we need the steel companies and automakers and on and on to deploy to the capital so that the corps of the system gets

its emissions down. >> when i noted on twitter i would be talking to you, and i heard from some people, it it's companies like brookfield, you're doing investing and is also investing in fossil infrastructure, pipelines. what is the role of the big institutional investor? you're suggesting that not investing in fossil is a mistake because it doesn't give them the resources to make the transition? or-- >> yeah, it's entirely situation specific. brookfield is one of those-- that's part of the 70 trillion. we bring 600 billion to the 70 trillion. we got to the 70 trillion because we're part of net zero alliance asset manager. and what it is we're doing, we map our carbon footprint.

we're developing decarbonization plans across our assets, we have a specific strategy which i'm very much participating in, which is to help accelerate the transition for companies and specific transition funds and addressing the overall, you know, footprint of our-- as i say that 600 billion of assets. >> to be clear, brookfield, it's one of the biggest renewable power generators in the world. it's over 20 giga watts. it's got another 23 giga watts and that's london and paris and chicago and new york in terms of scale of generation, it's a huge amount and then here is the key thing, and so i'll say about brookfield, but it's a point. when we own pipeline infrastructure, for example, the energy. so the judgment is about what's the terminal value of those pipelines. so, how long is there likely to be natural gas going through,

you know, these pipelines? is there option value for that asset to be converted to hydrogen or some sort of hydrogen blend and that's part of the value judgment. i would say, last thing, that sort of thinking hasn't been mainstream in the capital markets beau it's moving from periphery to mainstream quite quickly, which is going to enhance the value assets because or because there are going to be longer lives because it's in jurisdictions where either it's the lowest carbon solution for a period of time or one of the lowest carbon solutions for a period of time, and/or, it can be extended fors other reasons and just to finish, the sort of simplistic thing, which is what we're trying to avoid for the

system as a whole to say, all right, you own a pipeline, you're bad. that's hypocritical. no, it's not. it's an energy transition. we have to make judgments, brookfield does. others will make different judgments about what works where. we could be wrong with some of them, the transition could happen sooner, but we're, you know, we're grown up and, you know, we've got more right than wrong and we'll deal with it accordingly. >> and so, you're speaking to us today from ottawa as we mentioned earlier. canada has moved to put a price on carbon. the u.s. of course hasn't. it doesn't seem to be imminent. isn't that going to create some issues and going to be difficult for canadians to feel like, oh, this is great, we're doing our part and the u.s. is getting a free ride and it's going to be carbon leakage? >> the issue of carbon leakage is a growing one and as your

question suggests, david, in politics, you know, the judgment is, you know -- and it can be, it's often expressed in terms, it could be canada and the u.s., it could be canada, u.s. and china in terms of the emissions. i think that, maybe i'll answer it in terms of how we think that, you know, the trade policy might go around this issue. the first is that it's a relatively small -- it's a smaller group of tradeable products for which this is a big issue so where carbon is a big component of the value ad. steel would be a classic example. the second thing is that to-- so what is being hopely talked about? the president mentioned that the europeans are launching

initiatives on it and the canadians are talking about it. one of the challenges to be wto compliant with this, the easiest way to do it is based on a carbon price. you can look, i have this place, you have a price that's half mine, but when the u.s. doesn't have a carbon price, then you move into a world of shadow carbon pricing, which is harder to map and easier, so, you know, is the equivalent of the emissions standard worth x on the carbon, you get the point. the other route is around product standards, so having car upon components for steel. steel has to be of a certain quality and my personal view, cutting it short, is that i think that, you know, kind of over the next several years, it's more likely to land on the product standard side, not

leased not exclusively because of this, but not leased because the u.s. doesn't have a carbon price and doesn't seem likely to have one in the is foreseeable future, despite the economic benefits of going down that route. >> and i have to say that this deal was made in a way that had a limited amount of carbon emissions? >> and the thing is that that actually won't just be an assertion, the ability to measure this is -- again, it's part of the disclosure standards and others is the ability to map that. not just in the steel making process, but in the power that's provided and the carbon delivered to the -- you know, delivered to the ports here. >> what about china and india? this is often raised can't fix this problem without them. they say, oh, great, you used up all of this carbon capacity

to industrialize and now you want to look at our growth. and china takes a good game, but they're building coal plants. and are they serious about this? and how do they play in this world? >> easy to answer the second, incredibly important, you know, decisive, even. there's a few, you know, at the u.n. meeting, 195 countries are all equal, but some are more equal than others and the u.s., eu, china, canada, clearly, and-- . [laughter] >> are more equal than others. and how do i read them? i would say that the chinese are -- a couple of things about the chinese, one is that they have pretty explicitly taken a view that being low carbon on having low carbon industries or being leaders in industries

that enable low carbon is a fundamental driver of competitiveness, medium term competitiveness. so there's a big economic motivation to their push towards net zero, net zero. so that's first. and that point i think has not been lost on other major economic powers, okay, so this is reinforcing, you know, the market in some respects, the competitive juices around the industry for the future. the second thing is that, the chinese. the chinese on coal has just started to shift their stance. they said at the biden summit nell' they'll peak on coal in 2025, it's fuzzy to be clear, but it's that impression on coal in the latter half of this decade which is the key.

look, the objective is, you know, coal in advanced economies by 2030 and 2040 in emerging economies. the extent to which the global carbon budget can work and the chinese are big in solar and big in electric vehicles and big in a series of other things and we collectively have a strategic issue around the rare earth that are essential for a number of these climate applications and so, the development of alternatives is critical and including in canada. canada is part of the solution for that, but it's an expensive part of the solution so we need the collective g7 we need to think that through, but on balance, i think that china is a force in this and, you know, obviously, the largest submitting, but also, one who will increasingly be central to the solutions.

i think it's more straight forward, it's a complicated place to govern, it's a federal structure, but the commitment -- the commitment itself is quite clear, whether it's formalized into a net zero commitment remains to be seen. but the-- and the scale of ambitions take on the power side is enormous, it's one of the most attractive growth students. growth opportunities. and i think that they -- i'm pretty upbeat on india in terms of what actually will happen on the ground, not least in the economics of a number of the solutions have shifted. but, you know, david, made a mistake, we've left this issue -- the collective we -- have left it very late and the scale is enormous. you can pick canada, what's canada -- i mean, we've got huge changes that have to happen here and and that's true

for virtually every country. >> there's a question sometimes about the role of central banks in this you shall a -- issue. you've pointed out in the u.k., the bank of england has pretty broad supervisory responsibilities that the federal reserve doesn't have. and regardless, the european central bank have suggested that maybe they should be greening their portfolio of purchases when they do things like quantitative easing and seems to give the people at the federal reserve the shivers. so, how would you describe-- i think the role of the central bank as a financial supervisor in this area is pretty straight forward. if the institutions are taking risks that they don't fully understand, it's the role of the supervisors to point that out. so, that's the easy part, but when you get to things like

green bond portfolios, do you think that's a step too far or it's an important issue that we have to use every tool we have? >> well, i think, yes, so i think you've summarized it well. and i'll just-- for those who don't follow it on a daily basis, i can understand why you might not, but the bank of england receives my successors at the bank of england received three letters, which said, financial policy committee the macro so-called financial stability committee and the provincial supervisory committee, take climate change into account and it's consistent with the legal framework, so as a secondary or supplementary objective you've got to take it into account. and what the bank of england is doing and now and last week, i would recommend, people are interested if you search on the website the last two weeks, they've come out with a discussion people, a

consultation paper on how they may tilt in their words, their bond purchase program to take climate change into account and they own about 6% of the u.k. corporate bond market, but obviously it's a central bank and it could set a standard, a defacto standard depending how they do things and they've received a letter that says these are the kind of things that you should do, because it's not just like the current government's policy in the u.k., it's legislative. and so, it's so integral to the policies that you have to take it into account. and now over to the u.s. where it's the current government's policy. it's not legislative. there's not this mechanic of regular letters from the treasury second to the fed chair and the principal in general and when i was a central banker and the principal the fed would be under as well is one of market neutrality. when you go in the market you

try and-- sometimes deviate from this, but you try and buy across the curve. you're getting the portfolio balance effect on quantitative easy where you buy or lend collateral, you have a credit standard. once at that you meet that, you can more or less put that in. this is putting an overlay on top of it, which my personal view is, you need that grounding in -- that the bank of england has that the ecb has, into the master treaty and taking into account the core policies, i forget, but it's pretty well grounded and i can assure you the place is stuffed full of lawyers, if they get it wrong they'll be looking at. that's incorporated.

my read and there are more experts at the brookings institute than any expertise -- my reasoning is that doesn't exist for the fed and so we end up with different central banks doing different things and they're both, you know, they're all right, they're all correct in what they're doing. it's the nature of the institution. >> i do think, by the way, david, i do think that some of the common treaty of some people around this is poorly informed. it's like, well, the banks -- the bank of england, ecb, the responsibilities-- the bank of england couldn't be clearer. >> somebody from canada wrote a question asking, how do we operationalize your recommendations and deeper values in our economic decision making? you've made the point that when the society decides to do something, then the market is a

good way or a way to make it happen. but the predicate is that society has to decide that the values are important enough and i think that the question he's asking is, how do we make sure that policy makers in the society do that? >> yeah, so, i mean, so, i mean, that's part of the reason why the book is so long. it actually goes through, you know, if you go chapter 16 which goes to country policy, but it's in the leadership chapter, other aspects, is this is-- these are examples of how you do it, so, let me just give three quick ones, so it's not all about standards and objectives. so one of the values that's important for market functioning is some sense of responsibility of senior managers, who run financial solutions not just for themselves, but for the system. how do you embed that? and the book goes through this.

you have its alignment of compensation of holding back bonuses and when can they be clawed back, and what we did in the u.k. on that front. it's something like the senior managers regime where i am explicitly responsible. i'm not responsible for everything that 10,000 people that worked for me do, but i'm responsible to make sure that i train them, that they know the rules and have the support and monitoring things, if i don't do that in the u.k. i'm on the hook for that. and with that responsibility, in terms of sustainability, part of the way we do it apart from countries setting up objectives, you know, climate stress testing, scenario analysis, those types of supervisory requirements and financial institutions and gets you thinking there as a senior manager and what does my portfolio looks like if the country does what he says it wants to do and that is to get to net zero, i want to take

that risk, but need to be informed of that risk and nobody with the answer to that question a few years ago and people are discovering that a few years ago and taking on that. and resilience, which i'll stop here, which is another one of the values in the book to be emphasized and another important value, something i said earlier, which is getting-- and this is maybe a little more for public officials, but getting into the habit of planning for failure. don't spend the whole time telling yourself the cyber attack won't get through. what do you do when a large, systemic bank is frozen for a period of time because of some successful cyber attack. how do you keep it functioning? that's part of resilience in.

and these are examples and it's not sitting around and holding hands and say let's be better people and it will come. the book is anything, but that and to be clear in the end, these are values about longer term economic-- longer term economic prosperity and that is-- i'm not-- i'm an economist after all. >> let me ask you the economist and central banker hat on for a moment. i think there's some concern around the world, particularly here, that we had a very aggressive fiscal and monetary response to the pandemic, which worked out extraordinarily well. i look at the forecast that people were making in march 2020 and where we are today and i would chalk this up as job well done by the fiscal and monetary authorities and not only here, but now there's a

growing angst maybe we do too much and we're at risk of pushing inflation up corresponded our objectives. and i sort of wonder how you look at the world of inflation, particularly what we see given in fiscal monetary policy here and in europe? >> yeah, i think that the prospect of-- let's strip out the, you know, the last couple of, you know, the last months and very short-term here, with where it's been well telegraphed with the factors that will push things up and then focus on, you know, development horizon for policy. i think there are signs that inflation will be above target over the horizon from here. so, if you were dropped into, you know, to run the fomc, david, you know, next week and

you're looking forward. there are signs of -- in the labor market, signs in terms of supply shortages, it's a little more than short-term. there's a reason to expect sustained momentum, both subject to, you know, it's not a black one because it's in front of our face, it's subject to the uncertainties of covid variants and all that, but the prospect of inflation being above target for longer than the makeup of the past shoot, i think the balance of risk is headed in that direction at this stage i guess is the way i have to put it. >> for that reason-- >> sort of lapse into central bank speak there. >> and i'll put you down on the -- if you decide to add to the federal reserve to your central bank revenue, i'll put you on

the hawkish side of the spectrum. mark, i think one of the things that struck me as i read the book is it's actually very comforting because you describe some ways, and you did this earlier in our conversation, ways that we could embed values in our economic decision making in ways that don't have us all to give up electricity and you describe how we can get from here to there and you make the point earlier, it's going to be hard because we waited too long, but, you know, when you look the at political system in the united states, when you look at the polarization here, when you look at what the u.k. has been through. when you look at the rise of populous in france and germany, when you look at israeli

democracy, i wonder how you reconcile your relatively upbeat view that sounds well-meaning, thoughtful policy makers can get us to a better place with the political system that seems to prevent that from happening? >> well, a couple, many suggestions on this specific issue, which is first, it does put a premium on measures, i'll call it short of green measures, but measures that have immediate payback in terms of job and economic growth. it's an obvious point, but it does bear repeating. and so, you know, one of the simplest things to do, certainly in the u.k., and it will work there is, you know, you go to the houses and all due respect, in the u.k., you would not-- in the room that you're in, you know, the warmth--

well, you're in washington, it's about keeping the cold in as opposed to warmth. and incredibly, the desire for home retrofits and needs for them and the material costs attributed to their reductions and you employ a massive amount of people to cover the country and has the benefits. there's a series of industry, again in the u.k. on the renewable side, the wind industry, which has high multipliers, particularly in some of the less advantaged, northeast parts. and you do those things thoroughly that have tangible berths that create jobs and this is what this is about as opposed to everyone eating lentils and as you say riding around on a bicycle for the rest of their lives. in parallel, what you want to do is-- and this is the hard bit. i agree it's hard because of

the political dynamics, you need enough of a concensus for this to be credible, which is you want to layout a path for tougher regulation down the road. so, the advantage in the u.k. is saying, there's no new internal combustion engine car sold thereafter 2030, is factually, it's credible and it's spurring investment in the u.k. and plants and other things, now, one the big decisions, i think, for the biden administration is what is the equivalent of that? you know, it's not going to be 2030, but 2035, 2040 or is it not that explicit? is it a fuel standard that defacto means, it seems like gm and now ford have gotten the message anyway, but you're doing things farther out that then again spur investment today if it's credible and predictable. again, i sound like a central banker and something i worked on with janet yellen a paper

before she found something better to do. and you know, you're going to have to rely on and this is going to sound risky, but it is risky, that actually there is some tangible payoff to these measures. and you know, i think the last point, if i may, david, i think it would be interesting. let's assume a-- just for the purposes of this discussion, you know, a change in the u.s. government. a change in administration, you know, with, you know, more skeptical and in the republican party, you know, runs the two houses and the presidency. the facts on the ground, the economy increasingly geared to that, and it may be more than policy and maybe by that point, but that's what would be in my head is the benevolent or better have some payback by that point. so that the benefit of continuing and last point, just, you know, some said about

china earlier, which is that this is one of the competition points with china without question and i would suggest it's going to be digital both from a-- tech i should say generally, both from an economic opportunity, but from a geostrategic influence perspective. so we'll see. >> i guess i'm asking you-- >> a different question. >> is your faith in -- you were governor of the bank of england during the brexit vote in the u.k. you were very outspoken and you talk about why in the book, about what would be the economic risks that britain was running through some of the european union and as you say, you said we'd be ready and you were, and you got some grief for speaking out. and yet, despite all of elites saying this is not a good idea.

the current british government has certainly upheld that part of the bargain. so i'm just wondering, have you no doubts about the ability of our democracies to do this stuff? >> yeah, i definitely do. sorry, i thought my answers indicated-- i was trying to give you a path that -- i start from the position of there's -- the premise of your question, last two questions, exactly right. there is this risk of this shift. it depends on the jurisdiction though. for example, in canada, look, it's 75%, 70% to be more precise of votes in the last several elections were for parties that were as aggressive on climate or more aggressive on climate than the current government. so that's a pretty big concensus, plus, things are being legislated as opposed to policy. so you can change the way you get there. what i just said for canada holds even more so in the u.k.

and europe. but of course, if you're a politician, then mapping that into giving people what they really want, which is jobs and that progress, that's your job, the u.s. is not in, you know, you know better than i, the stop and start is a risk and australia has been in that position, stop and start on climate. so, it does matter that -- look, i guess the way i would put it to bring it back to what i tried to write in the book, is, you know, there's a value of dynamism in the book, which is sort of market returns and growth and prosperity and so unless you're delivering that alongside sustainability, you're not going to get to are with you want. and if i could just bring it back to central banking, one of the things we're always cautioned at the bank of england is-- in our financial stability role, don't end up with the stability of the graveyard.

don't pile capital so high in the banks and stack up with liquidity that there's no lending. it was good that we had the pushback so we took it seriously. so the analog to climate is, yeah, don't have the sustainability is a great one if you will or sustainable in all sense, like it's flatlining growth because that's not sustainable. that's not a sustainable-- >> mark, a few minutes left. i wonder if you could end on, if you had to draw a couple of conclusions on your chapter on leadership, to the people who are young or aspiring leaders, what would you tell them are the most important lessons that you've learned in your time in all of these incredibly important roles? >> well, i -- yeah, i think the -- i mean, i mentioned it earlier, one is this point on humility. so, you know, it's the nature of the roles, being a central banker you kind of look at

glass half empty a lot. in terms of brexit, my job was what could go wrong and prepare for it, that aspect of humility. and a positive aspect of humility, if you will, which is that, you know, i certainly had a lot of good fortune to end up in the roles that i had and some extent good fortunes, and so, you know, don't take yourself that seriously and remember your responsibility while you're there is to improve the place and leave it better. and then, you know, increasingly understood that has a leader, you're setting goals and you're catalyzing actions, but you know, you're not-- part of the way to get people to follow is to be fully engaged in how a solve the issue and so, it's not just about having different choices at the table, it's an inclusive

process and they're part of making decisions and they feel they've been heard and then even when the decision doesn't go their way, they understand and they get behind it and that's, that's a learned skill. and maybe it's inherent for some people, certainly something i've learned over time. and, but it's really important to be able to do that. and it does take more time than talk down, you know, a sort of leadership by fiat, but it's far more effective over time. and far more satisfying for everybody involved. >> thank you. it's been a fascinating hour, i really appreciate your time. if we were meeting in person i'd hold up your book, but i only have it on my kindle so i can't hold it up. but it's, as i said, it's almost an encyclopedia. i think there are individual chapters i'll go back and read

when thee things are in the news. and it's a valuable resource. thank you for you time and look forward to your next act. >> thank you very much. weekends on c-span2 are an intellectual feast. america's tv with america's stories. books tv brings you the latest nonfiction books and authors. ... conflict" into the search box at the top of the page. >> it's my >> is my distinct pleasure to welcome t