>> bernard jenkins. >> can i join others in commending my friend for his leadership on libya. he does deserve considerable credit. can i think him also for the constructive tone which he is adopting toward those of us who have anxiety that so many parties have been promised a referendum again and again? it clearly is something the british people want, to have a say over our future relationship with the european union. it is likely the house of commons is likely to vote heavily against what the europeans -- what the british people want. >> i will try to keep my tongue constructive throughout. i completely understand people's frustrations. they were promised a referendum on the lisbon treaty and did not get that referendum because it was put in place by the last government, and it was not possible to hold that referendum. but i think the answer to frustration about not having a

referendum about the last thing is not to just offer a referendum on the next idea. the most important thing is to deliver what people want, which is to get the best out of the european union. where there are opportunities, we take them. that is the focus we should have. >> the prime minister rightfully said that the 27 nation states will decide anything on the single market. it has not told the house that the president of the council has been elected president of the 17 nation states within the eurozone, with france on one shoulder and germany on the other. the president has said he will inform the british government prior to summit meetings. does the prime minister think that to be informed is the same as to be consulted? >> , the gentleman makes an important point. as the eurozone comes together and government's arrangements change, it is important that those countries who are not in

the eurozone have their interests protected. that is why i secured specific language about making sure there is a level playing field and countries outside the eurozone are protected. this is a journey. the eurozone is going on one journey, where they see closer collaboration and cooperation. countries outside the eurozone i believe will be looking for further protections to make sure our vital national interests, like financial services, are properly protected from what is happening in the eurozone. >> with victory in iraq and afghanistan, we have 100 days to deliver a stabilization before the joy of victory turns to despair among the local population. the clock is ticking. can the prime minister say a few words as to how we will deliver this stabilization? >> worked closely with others on this plan for libya.

i am optimistic on this basis that we have seen with the national transitional council that it is genuinely national, bringing the country together, not wanting to see a division between benghazi and tripoli. the clock is on to set up a general transitional council. everything i have seen shows they want to get on with rebuilding their country. because of their oil wealth and the wealth in their sovereign fund, the have the means by which to do it. >> in the prime minister's statement, he suggested eu economies could be as productive as the u.s. if we had the same proportion of women in the work force. both unemployment against women in the united kingdom being higher than at any point since 1998, can the prime minister tell us three things he has done to increase the proportion of women in the work force? >> we have increased the hours of free nursery care. that is what we have done.

>> can the prime minister tell the house whether the president of switzerland and the prime minister of norway were at the table arguing with the french? i suspect the answer is no, because the relationship is very different two hours. they are not in eu. what you see in this motion is a wrong option for our country to pursue. >> i think there is an important point. we have to ask very clearly what is the national interest for the uk. at the heart of our national interest when it comes to the european union is not only access to the single market, but to make sure we are sitting around the table, determining the rules of our exporters have to follow. we must not lose that. >> which situation does the prime minister hope we will arrive at first -- that the

eurozone can pass without drinking on it, or that euro skeptics will pass it without going over it? >> that took a long time to construct. what i believe will happen is the eurozone countries are coming together. they are seeing the need for a big and bold solution. that needs to happen. that will not solve the problem. there are still major strains the need to be dealt with in the long term. but i believe that will happen over the course of this week. it is up to the house of commons how it votes tonight, but i am clear our interests are to seek our national interest at all times. >> can i congratulate the prime minister on his leadership on libya? returning to fiscal union, i ask the prime minister what part of fiscal union he believes

could trigger the european union act 2011? >> the key point about the european act that we put in place, the referendum, is that in the passage of powers from britain to brussels results in a referendum. that is the key thing we have delivered. never again can you have a situation where you have a treaty passed that moves powers from this house to somewhere else without asking the british people first. sometimes i think we have lost the ability to and recognize what a significant change this is. i think everybody on this side of the house can be proud of it. >> from my last question, a few months ago this house spent 42.5 hours debating the eu bill and the business of the eu to allow for the referendums. is there any chance in the near future of a referendum on the

eu? >> if a government proposes passing powers from this house to brussels, it should ask the british people first. that is the simple principle we have put into law. i think it is important we try to establish clear rules for the use of referenda in a parliamentary democracy. i believe if you are giving up powers that belong to the british people, you should ask them first. >> i commend the prime minister on his statement, not least because it will reassure the thousands of my constituents who work for european countries. i would ask him to reassure me that the things my constituents do not like about europe -- bureaucracy, profligacy, growth, overspending, and too much regulation -- will be dealt with to the best of his ability during the course of this government? >> i can give him that assurance.

if he looks at what we have achieved in a relatively short time, getting out of the bailout, getting an agreement for a freeze in the european budget, and getting the european commission to focus on deregulation are all important points. but i would agree with his first point. one reason companies come and invest in britain is not just because of our economic strength and flexible labor market. it is also because of access to the world's biggest single market. i think that is very important for investment by firms into britain, creating the jobs and the wealth we need. >> with some financial analysts saying the banks that hold sovereign debt may have to take a 25% to 50% write-down, can the prime minister elucidate what it means by a financial firewall big enough to contain any contagion? do you think the house i am afraid to be involved in this?

can it be solved in europe? >> for a decisive resolution to the greek situation, we need at a significant infusion of capital to the banks. the must be credible stress tests. there have been the stress tests in europe, but they have not been robust and credible. that has been secured. the second thing you need, the firewall, the big bazooka at the shadow chancellor referred to the other day, is to make sure you have a mechanism big enough to help stop contagion to other countries. there will be discussions with in the eurozone and outside the eurozone about how big it needs to be. the answer is bigger than is currently proposed and they need to keep working on it. >> is there a possibility there will need to be treaty changes

in the next few months? will the prime minister assure me and citizens in this country that he will use this opportunity to make sure we get rid of ridiculous regulations which are impeding growth and job creation in our country? >> i agree with the honorable lady. we should use these opportunities as the european union changes and the eurozone changes to maximize britain's national interest. we do not yet know how much of a treaty change will be proposed by the germans and others, how expensive it will be. we will have to look carefully to see what is right for britain in response. so far in this government, there has been one tree the change proposed. we expected an important price, which was to get us out of the bailout, which was a clear and present danger to the united kingdom. >> as leader of the opposition, you underestimated the crisis. as a result of that, we had to go terribly fast into european politics.

what is the next alibi going to be for the postponement of the referendum? >> i have not underestimated the scale of the crisis we face in europe and across the world economy. sadly, the crisis has been made worse by the vast overspending that took place under the government of which he was a member. >> the last general election, the conservative manifesto committed ourselves to seeking to return powers from europe on economic and social policy. but nowhere within the manifesto was there a commitment to seek an in-out referendum, and nowhere within the manifesto was there a commitment to seek to renegotiate our terms of membership in the european union. >> my honorable friend makes an important point. we did have a commitment to seek the return of important powers,

like the social and employment legislation. obviously, we are in a coalition. i remain committed to achieving that. i think it is in the british national interest. but it was not part of our manifesto and policy to seek a referendum that included an in- out option. i respect there are members not just on this side of the house, but on the labor side as well, who have long wanted a referendum. some of them would like to get out of the european union altogether. that is not our policy. that is the reason we are having this debate on a monday in the proper way. this is not a side issue. it is an important issue. i believe in the sovereignty of parliament. to me, all decisions by parliament matter. the idea that we could sweep this off to a debate on thursday is wrong. what parliament decides matters.

that is why this government is taking this motion seriously. >> a few weeks ago, i visited a group in my constituency. the complaint the difficulty they have had evacuating british staff from libya. that explained their key desire to go back to working on infrastructure projects as soon as possible. can the prime minister tell us how we are going to go about making sure that happens? >> this issue is important to his constituents and this business, and important for british investment into libya. steven green, lord green, has already held a libyan investment conference. he plans to travel to libya. i recommend a contact that minister so we can help the group with the important work they do. >> many of my constituents who have contacted me over the last few days say they lost their

trust in politics because of the last government refusing to give them a referendum on the lisbon treaty. what substantive message cannot honorable friend give me that i can take back to those constituents? >> i understand their concerns. i think just because the last government failed to give a referendum does not mean we should vote today on a referendum for an in-out option that was not in any of our manifestoes. the things people care about most in europe, constraining the european budget, getting out of the bailout funds, cutting unnecessary regulation -- the government is doing all of those things, and there will be more to come. >> did i hear correctly when the prime minister said there should be a referendum on the maastricht treaty? in light of the foreign secretary's opposition to that, can he say when he changed his mind? >> i have always felt that, and our build it -- our bill is

clear. any of those treaties would have triggered a referendum. i do not think the honorable gentleman has been keeping up. i hope labour will commit to this legislation. if ever in the government tries to give away powers from this house, the have to ask the british public first. >> carry it baldwin. has the prime minister noted that while this government has ruled out joining the euro -- >> an interesting series of interviews over the weekend by the leader of the opposition. as well as saying that if he was prime minister he would like us to get back into the euro again, the other thing he said -- he was asked whether brussels have got too much power. he said he did not think brussels has too much power. that is the position of the labor party. wrong about the euro. wrong about brussels, wrong about britain, wrong about

everything. >> i it share the prime minister's optimism with the liberation of libya, and pay tribute to the role of our armed forces have played. however, is the prime minister as concerned as i am about the allegations of the summary execution of anyone, even a violent presence like gaddafi, and does he share the urgent need to reassert democracy in this country? >> we saw the pictures on our televisions and newspapers. they were not pleasant. i think everyone understands that is not what should have happened. there should have been a trial and gaddafi facing justice. as i said earlier, the chairman has announced an inquiry. i think it is important the libyans carry this out properly. >> could i respectfully disagree with the prime minister that there are no lessons from libya?

the lessons which could be applied to europe is what matters is not what you ought to do, but how you do it, with whom, and when. >> i did not say there were no lessons to learn. i think there are lessons to learn. the government is carrying out a lessons-learned process. we will announce the key points about that. the comment about building alliances is vital. what i was trying to say and perhaps did not put across properly is i think you have to be careful not to say that because libya was successful you can read that across to every other proposed intervention. you cannot. i am a liberal conservative. there is a bit of skepticism you should bring to these schemes before you embark on them. >> is it this prime minister position that he could see substantial german-led changes

in the german -- in the lisbon treaty without a referendum? >> if there is a proposal for moving powers from the house of commons to brussels, there is a referendum guaranteed. it is vital people understand that. that is the promise we made. we do not know whether a treaty change will be proposed, what it will consist of, or how big it will be. we will use that opportunity to further the national interest, something that did not happen under 13 years of the labor government. >> closer fiscal policy coordination in the eurozone marks 2 we would different degrees of economic integration among member states. does the prime minister consider that unlike other recent referendum, this development, along said passage of the eu act, is a more meaningful veto on changes as a result to treaty changes and their impact

on our own country? >> i think my friend is right. i think that is the assurance people seek. you should not change the rules of the game. you should not give away powers that are not yours to give away. the british people should have a block. that is what we have put into place. no government should rule out forever putting questions in a referendum. this government had a referendum on the alternative vote. that is not what i am saying. i am selling the bedrock of our view is is that you should not give power away from parliament without asking people first. >> ahead of tonight's vote, with rebellion looming, can the prime minister tell us what advice he has taken from former prime minister john major? >> he had plenty of advice from the former prime minister because he used to work for him, whether it appears on the cv or not.

>> with large supply chains across europe and a market of 500 million, does the prime minister agree that we need to see if further strengthened capacity of a single market to deliver more trade? >> this is an important point. all these years after the single market was started, we still have not completed a single market in services, and in this country service is one of our strongest industries. it is countries like germany that have not yet completed that single market. i know people are fearing the liberalization of energy markets and the regulation in europe, but if we want to raise our growth rate and a game it is squarely in the british national interest. >> amount to congratulate my friend on his leadership in the libyan situation.

the many doctors have been proved wrong. will he assure me he will continue to work with the president of france and others on the security council to address the situation in syria? >> whatever our disagreements on economic policy, by and large we are united on this. the french president and i will work closely on foreign affairs issues. there is a coming together of french and british national interests. where we do have this agreement, we should not be frightened of airing that and discussing these things. >> congressman adam smith's will give his perspective on the deficit reduction committee. then an update on the investigation into the solar company.

chris stern joins us. after that, author and financial historian john gordon will talk about the creation of the u.s. federal income tax. each morning at 7:00 eastern. later on c-span, the hearing will examine -- examine the effect european economic problems have had on employment and the economy. this is after leaders met after the weekend in brussels to work out the details of a bailout fund. live coverage gets under way at 10:00 eastern. that is also on c-span radio. >> middle and high school students, time to get the cameras rolling for the city competition. make a five minute video on the theme, the constitution and you and get it to c-span by january 20. you could win the grand prize of

$5,000. >> financial analysts discuss the challenges the economy faces. the group comprises a regulatory committee that is studying economic trends in the u.s., asia, latin america and australia. this is an hour and 50 minutes. >> welcome. this is a public symposium following the eighth joint summit meeting of the six shuttle financial regulatory committees. the theme of our meeting was lessons from the past, moving into the future. that is what we are going to focus on today in this symposium. there are six shots of financial regulatory committees. the oldest is the u.s., since

1986, followed by europe. and japan. the european common 1998 and japanese in 1998. let america in 2000. asia in 2004. the latest to join us are oceanus, australia and new zealand, in 2006. we met at santiago, chile. we met at copenhagen, denmark. at this meeting, we had 36 members from 20 different countries attending. we started on saturday morning and just finished a few minutes ago.

it is sort of like a mini imf with all those people from different countries. the purpose is to exchange ideas and to see if we can develop strategies and programs that can be acceptable to all of the committees. the agenda for today's meeting -- i am first going to introduce the chairman of the six committees. there will introduce the members sitting here. many members of a have business commitments and have had to leave. but we do have enough members here who could interact with you after the symposium. then the individual chairmen are going to review briefly, 5 minutes or less, the gist of the papers they wrote, the impact of the financial crisis on their area, policies taken are not taken, and lessons they have learned. we developed a policy statement after we listened to all the

papers and committees, and had a great deal of discussion. the head of the u.s. committee will present the policy statement we have adopted. there are copies available. then we have two commentators from the world bank and imf. if everybody stays with in their time schedule, that should leave enough time for a q&a from the audience. let me get started and introduce the chairman -- chairman of the various shaddock committees. juliana suarez, would you like to introduce the members of the latin american committee? >> raise your hand. this is the former secretary [inaudible]

guillermo chapman, right there, is in panama, and is a very important negotiator in issues related to the canal. finally, pedro, a professor at the university of sao paulo and former head of their securities commission. >> [inaudible] >> is your microphone on? >> my name is jeremy. i am from singapore university. i chair the asian committee. there are three members here,

three over here. one is from the faculty of a university in indonesia. next to her is maria, a senior economic advisor at the asian development bank. jonathan is on the faculty at the hong kong university of science and technology. >> thank you, and jeremy. we only have one person left from the japanese group. the rest had to run back. >> i am from the university in tokyo. the japanese members were here until yesterday. unfortunately, all of them except me left this morning. i am going to talk about the

japanese situation today. >> next harold, the chairman of the european shown a committee. >> thank you. from the european side, we had seven members come to the meeting. five are still here. one is the professor of finance at the university of frankfurt in germany. then we have a professor of economics at the university in paris. we have a professor of finance at the school of economics in helsinki. we have a professor of law at the swiss federal university of technology, if i say it correctly, in zurich, switzerland. >> kevin davis is chairman of the phocion a group.

>> i am a professor of -- of the oceanea group. >> i am a professor in new zealand. professor mervyn lewis is professor of banking and finance at the cow university of south australia in adelaide. this is a professor from melbourne. >> now we will have the presenter for each commit to go briefly, 5 minutes or less, telling the gist of their papers. we will do this in order of the establishment of the committees. the oldest committee is the u.s. it is not necessarily the most important, but we were the first established. charlie will be presenting. would you come up to the podium? >> thank you, george. i will briefly summarize the the end of our paper, which presents 11 key lessons learned from the crisis and from the

policy response to the crisis. first, one of the main drivers of the crisis was government housing subsidies, subsidies for risk, particularly in the mortgage market, which included hud mandates on fannie and freddie's behavior and many other government policies that encouraged lax underwriting, especially over time, and increased leveraging in the mortgage market. unfortunately, almost nothing has been done to address this key problem and prevent it from happening again. the second problem was easing monetary policy keeping interest rates far below equilibrium levels for years in a row, 2002 through 2005, which resulted in the underpricing of risk, asset price inflation for risky assets, including housing, and

fuelled unreasonable expectations that helped inflate the housing but -- house and bubble. the fed has not accepted responsibility for these mistakes, nor has it said how it will implement a practice that would prevent it from happening again. we have learned that regulatory and supervisory frameworks are deeply flawed. two of the most obvious and important witnesses are the failure to measure risk in the financial system on an accurate basis in advance. the second important problem is the failure to recognize losses when they start to accumulate, despite the fact that they are apparent to the market into anyone who does not have the political or other motivation for hiding them. the regulatory reforms have not addressed these key problems of the risk and loss, despite the thousands of pages of dodd- frank.

bank risk-management is another area that failed. corporate governance in some banks was deeply flawed. risk-management failed to recognize and constrain bell u- destroying risk-taking that harmed bank stockholders and contributed very much to the financial crisis. some of the interventions the government undertook were well- designed, especially those that had structure that made them liquidating and temporary. others were not so well designed. for example, we are still seeing the federal reserve with a trillion dollars of mortgage- backed securities stuck on its balance sheet, based on reactive and not well designed programs which have ongoing implementations -- implications for problems of fed independence.

we found out their problems aren't domestic weakness having to do with the ability and internationally having to do with what to do when troubled institutions present problems across borders to require some kind of international coordination of policy. these problems remain unaddressed. we have reinforced perceptions that were pre-existing about the too big to fail doctrine. lead to some institutions are too big to fail despite some reforms in the legislation, many people believe that the legislation institutionalizes that. there are also some technical problems relating to the dealer system and the way the federal

reserve implements policy which explosives the fed system to unnecessary concentration of problems having to do with the small number of dealers. we point to the ecb as a better approach for a broader based system for engaging in monetary policy. >> one of the difficulties when you are wearing two hats as the chairman is that i forgot to introduce the members of the u.s. committee. if i could recognize them, the university of pennsylvania and carnegie-mellon. boston college. university of chicago law school. anybody else i should recognize? bob will be here in a moment. he is on my left.

peter, of course. where is he? american enterprise institute. anybody else? the second person to speak is herald. -- harold. 5 minutes. >> good morning ladies and gentlemen. it is a pleasure to see so many of you here. talking about european situation, you can imagine that the regulatory committee was having a difficult time because the whole world is looking at europe and saying, i get your act in order. as you will notice later on during the session, we're going to issue as a shadow committees dealing with some of the

problems in europe. europe is unique in the sense that it has a large, important diversity and also institutional complexity. we are a collection of 27 countries which is basically a type of flow of goods and persons and capital services. the other 27 countries, we have 17 which have been the single currency. the euro. that means that we also have 10 and on the eurozone countries and a country like switzerland which is closely linked to the european union but is not a member. although voices are becoming stronger to join the u.s. [laughter] you know, of course a charlie

has greek ancestors is going to join the europeans. we are nicely mixing up. in terms of the crisis, during the first year there were some banks that were hit in the united kingdom. quite a few german banks. it happens to be investing substantially in the u.s. subprime loan portfolios. the reaction in europe and the crisis after september 2008 when the lehman brothers sale, the reaction we have seen in many european countries was basically titled a big bailout in terms of the government

injecting money into the banking system. some got nationalized. loan guarantees were provided. there were all types of bank guaranteed liabilities. they have started issuing new bonds. in late 2008, an important committee started working led by walmart -- one of the former directors of the imf. they produced a report of strengthening the european the supervision which has led to the situation that as from january, some new institutions were created. the type of observatory of risk

and -- also and three new supervisory agencies who are new in the sense that they were created, they are the successors of formal types of corporations. i'm talking about the banking authority and the markets authority and the european authority for issuance and occupational pension. these new agencies need the type of strengthening supervision. the corporate -- cooperation between european supervisors. as a shadow committee arguing, this is not likely to remain stable for the banking and financial services.

in terms of other legislation in europe, europe has been implementing bazel 3. there is a new proposed directive to capital requirements following the work of 2003. as you have seen in the newspaper, there is an independent banking commission who are arguing that large banks, which are active in commercial banking, the ring fencing of the commercial banking part. what is urgent in europe is that we need to develop much more stringent regulations -- regulations. whenever large banks and also with dexia, it is hard to sort

out things. a few words about the european crisis. we have been preparing for this meeting. i start this presentation with the complexity of the europe. we notice a difficult process. you are aware of the plan which is being discussed that the greek debt is unsustainable and needs to be restructured. there is a point of a recapitalization of the european banks where they will be able to absorb losses. this weekend there was a meeting of the government leaders. the imf was asking for double.

that is interesting to see. the main thing under discussion is how to increase the firepower of the financial stability facility. the point is that the typo of causal that european leaders are solving is how you -- how can you prevent contagion spreading from greece, how can you prevented to going to countries like spain and italy? if they are under attack, we have a problem in the eurozone. we're talking about the central bank, the rescue fund, they do not want to commit additional money. that is a difficult causal to resolve. if we need to have a much larger rescue fund, a taxpayer money will be at risk. that is something that european

leaders will be a sorting out to be before next wednesday. by understand that all plans are being discussed. it has some interesting ideas. thank you. >> good morning, ladies and gentlemen. i would like to talk about the japanese institution on behalf of the japanese committee. i am not to the chair. when the crisis happened, japan was just coming out of a decision that when the owned

bubble collapsed in 1990. that is the japanese system and the institutions were fortunate. things had improved and that time. for example, the financial services agency, the fourth major bank to get out of the nonperforming loans in 2000. as shown in the graph, they disclosed nonperforming numbers. it declined in 2000.

the decision was delayed because the bubble burst in 1990. in terms of the global financial crisis, the late decision worked. that means that japanese banks did not have any risky investment. the direct impact on the japanese institutions was limited. the obvious reason is that the japanese banks did not have much exposure. the financial system maintain stability. it was stable so far. however, the economy suffered a lot.

here is the gdp growth. it suffered more than that of united states. so why did the japanese economy suffer so much? why did the financial system go largely harmed? the most important was the decline of the exports to countries that were hit by the financial crisis. it looks like the company -- country will remain stable but that is not correct. there are two major problems so

far to this decision. one is that to the imf financial stimulus needed to sustainable. the japanese banks made a large amount of bonds. the interest rates could be 4.7 trillion yen which is 12% of its capital. the fiscal expansion may have contributed to prevent the economy from going into a deeper recession.

but the fiscal situation was already serious before the financial crisis. the second problem, going back to -- it helped banks to conceal losses for classifying loans as nonperforming. first, we can learn from the japanese experience. one is japanese banks do not want to repeat the non- performing loan programs. one lesson is enforcing policy. three, from may and stability

point of view, the expansion might create another crisis. summarizing all of this, the economy is relying on exports and is suffering a lot from the financial problems abroad. thank you for your attention. >> most of you know, latin america is perceived as the region that was -- during the financial crisis. there was not a banking crisis

or loss of confidence from depositors. that did not mean that the region was not affected. it was heavily affected by the shock. after there was a triumph in liquidity, local banking credit, many countries became negative. however, the difference is that it was short-lived. in the region recovered briefly by 2010. it was facing the same problems that it was facing before the crisis. the problem was that they depreciated the currency. we're kind of in the same situation when the possibility

of the new crisis may hit the region. we are you there were three reasons for this outcome. -- argue there were three reasons for this outcome. the initial conditions mattered for the crisis in the past and it will price -- matter forever crisis there is going to come. there was an improved performance and a better financial framework. the second is policy makers had a better response. for the first time in many years, they were able to implement monetary policies. that is something that in the past banks are not able to implement. the third factor is luck.

it happens that after the crisis, the fed reduced the rate on financing conditions for countries like latin america as well as commodity prices recovering immediately for the commodities that latin america exports. there was a combination of those factors. the most important lesson to us is that the central bank's learn what in economics is called a trinity. the fact that you cannot have an open capital account and have an independent monetary policy. latin america has tried to go against the trinity and it has always failed. latin america has many characteristics that are important for dealing with the

crisis. the first one is it is the most financially open region among the developing countries. its capital flows come and go and there are some controls in brazil. most of the rest of the country does not have many restrictions. the second one, you cannot issue hard currency. i would like to stress this one. this makes the difference between advanced economies. nothing else makes a difference. at the end of the day, you need internationally traded liquidity. that is the u.s. dollar. when your in this situation and your a bank facing those things and you recognize this is where you are, then you know what you have to do with your system. you want to have flexibility.

you do not want to be trapped. the house to an account because you cannot issue hard currency. that is what these countries did. it served them well. at the time of the crisis, there were able to expand liquidity. corporations needed hard currency to make good on some of the positions they had taken with international banks. that is what they did. in addition to that, they also learned that good fiscal management matters. latin america is well known for the debt crisis. if you look at the history, latin america is check, check. they learned, no more debt. very little debt.

most countries have a small ratio of debt to gdp but they must have a maturity structure that is worked out. using the low-interest rate, they concentrated expensive debt for lower interest. being in that position implies that when the crisis hit, there was not a large amount of money that had to be rolled over. that is not the case in latin america. i do not have time for more but let me finalize with the question, where is latin america for the next crisis? a little bit less than in 2007. some countries that had expanded this kind of policy have not yet backed up completely.

on the monetary standard, they are doing a wonderful job. that is a lesson for the united states. [laughter] we are full of lessons. some countries have work to do and they had better hurry up or the crisis will and put them in the same position as 2008. >> our next speaker is jeremy. >> thank you, george. we are compiling a report of what happened in the 2008 crisis and how it impacted the asian economy. one lesson we learned which is very important, it is important to understand what happened.

the pre crisis conditions. then what were the steps taken by policy makers to handle this and trying economic and financial crisis back then. asian economies are reversed. -- diverse. by and large there were a lot of similarities going before the crisis hit in 2008. asian countries are relatively sound economically speaking. they have good fundamentals. there was a crisis that hit in the late 1990's and people learned. what really helped to that point was the low inflation rate and a robust growth rate. the key issue is the low debt to gdp ratio of 60%.

going into the crisis, the chart shows that the stock market was at a historic high. all in all the asian economy was in good shape. just before the crisis hit. another factor that was unique in the region is that the financial institutions are consolidated. we know what happened in 2007. i do not need to go through all of this. the lehman bankruptcy, the liquidity dried up. it was important to look at this chart and see that a lot of the stock market is at a it is important to look at this chart and see the market is at a historical high for many countries. just before the crisis hit. same in the real sector.

also notice the recovery, it recovered in no time. in less than a year's time we are back to pre crisis levels. if you look at the real sector, the economic growth after the crisis was phenomenal. the monetary policy and fiscal policies adopted by government in the region made a sharp cut- sharp cut in interest rates. -- made a sharp cut in interest rates. the worry that there would be bankruptcies. a lot of measures were put in place to restore confidence in the system. also, one important issue is the build up of a lot of the reserve. along the economy in the forex

market. fiscal policy, fiscal stimulus. huge fiscal stimulus of a 5% to 8% of the gdp. other managers increased confidence in the market, imposing a short sale restrictions and the u.s. dollar facilities and suspended market rules. some argue that -- those were measures that were taken by some of the countries in the region. what happened post-crisis? we see a very sharp recovery. singapore registered a 14% growth rate. china more than 10%. with this growth rate, you get hard money. very strong capital interest to the region. we cannot separate out the hard money, but it created a new set

of problems, housing, price depreciation in places like china, hong kong, and my country of singapore. there is also inflationary pressure. currency appreciation in some exporting countries like thailand. one of the issues the thai government had to deal with is the ever-increasing thai baht. do they impose capital controls and things like that? one of the big lessons that you learn from the crisis in some sense, the asian economy, the asian market lucked out. lucked out because of the banking practices and the fact that exotic financial products are not very popular among investors over there. and also, financial institutions are well regulated and the

regulators are pretty hawkish about and looking over the financial institutions. the latin american economy, there is a reserve that provides a cushion. one thing we learned is a prudent use of stimulus. it is hard to category, we know. overuse of stimulus, leads to new problems like real estate bubbles. we have had a real estate bubble in singapore, china, and hong kong. inflationary pressure and currency appreciation. one of the things that was adopted in the market that can capture these bubbles was the use of policies that can handle some of this spiraling housing prices. in singapore, what happened, every time you get a housing market with things imposed, if

you own a government subsidized property you cannot buy another private property, that kind of -- the speculators in the market. the loans at 80%. you can loan up to 80%. one way to handle the problem is to cut it down to 60%. it is quite unfortunate. overall, it has helped to stamp some of these bubbles. these are some of the important lessons to be learned. a prudent use. thank you.

what's the speaking order is correlated -- >> the speaking order is correlated with the least affected region. what happened in australia, not much. it was uncomfortable for a while. there was financial disruption. we had a significant decline in the equity market. the banking sector maintained profitability, a slight drop. there were substantial failures outside of the sector. there were investor losses from structured products. in terms of the comet, a moderate impact. austria had one quarter of negative growth. not a lot of affect. why was that? some luck. we were in the right place at the right time. both countries had been tied into asia and china, that helped strengthen the economic. in terms of the financial sector, australian and new

zealand banks are one in the same, were not exposed to toxic assets. why were they not exposed? one reason was they were read -- busy borrowing themselves from the international capital market to fund our large deficit and then using those funds in pretty profitable lending a largely for housing. in a sense, there was no reason to cannibalize the markets by trying to build up those vehicles. austria and new zealand, particularly in australia, strong credentials supervision, reflecting the fact that in the early 2000's the regulator had had a bad experience with the buyer of an insurance company. we had conservative banking. not as much emphasis on trading and position taking. also, it is reflecting the fact

that bankers memories are lumber than we thought. we had bad experiences in the early 1990's. the memories of that hung over in terms of bank behavior. i think it is also important that at the time of the crisis there was sustained government action. imposition of guarantees -- the provision of guarantees. provision of liquidity facilities and also strong fiscal expansion of facilitated by the fact that both governments had been running surpluses for a long time and their positions were strong. what were the consequences? one of the important consequences was austria and new zealand were marked by the fact they were the only countries without deposit insurance or without explicit deposit insurance. it becomes a bit difficult to sustain that situation. austria has moved too explicit

guarantee system. new zealand is attempting to go back to what i would call the depositor at risk model. if a bank fails, the depositors are at risk of loss, whether that is feasible is unlikely. one of the consequences of the experience is that we all thought too big to fail was the case. we now know that too big to fail is the case in australia and new zealand. what is also happening is reflecting the international agenda even though the banks failed through the crisis red -- faired through the crisis reasonably well. there are tougher banking regulation. what is important is reflecting the the years that occurred outside of the banking sector in terms of retail investors and borrowers and the failures in that area, there is growth focus on consumer protection. a shift in the onus of responsibility away from consumers to taking

responsibility towards the providers of those products. the banks and other institutions have been more responsibility for assessing the nature of the suitability of their products. what are the lessons? some untested hypothesis, 1, the regulatory structures. both countries have simple regulatory structures. in australia, we had a specialist dedicated supervisor. he had one task, credential supervision. a lot of the gaps that might have existed disappeared over the years as we took responsibility away from state government and allocated it federally. secondly, i think there is a lot of risk in the economy passed on to end users rather than in the financial sector. most of the bank lending is a variable interest rate lending. to the extent there were

increases in funding costs, they were passed on to borrowers. the equity market collapse impacted individuals through their investments -- their superannuation pension fund investments. the risk was passed on to end users. we are seeing a reflection of that in that there is an increase in savings. a third possible lesson, or head offices, is that there are benefits of having a concentrated banking system. those benefits might come despite the fact that there are concerns about competition and rising from that kind of model. some of the risk -- the systemic risk is internalized in the bank. they have to manage it better. it is easier to supervise. a small number of large banks. these are just hypothesis. the last thing i would point to is that one of the benefits of

the systems is a clear division between the credential the regulated sector and the unregulated sector. those who make up losses in the unregulated sector could not claim for losses. thank you. >> we then listen to these reports and sat down and noticed the last three reports all said the important factor was good luck. we did not want to issue a statement saying all it took was luck. [laughter] we debated this for about a day. the statement we came up with will be presented by robert litan. >> thank you very much. when this conference was planned a year ago, the main idea is that the shadows from the different parts of the world will get together and we will share lessons with each other with the view that at some distant time we could draw on

these lessons and apply them so next time we will do better. the distant time arrived a lot more quickly than we had anticipated a year ago. we met at a quite convenient time when the world is facing a potential crisis in europe. for state and concentrates on europe. it provides a framework for judging the plans that may emerge out of the discussions that are now going on in brussels and other discussions after that and a lot of the media commentary that will surely follow all of this. i should say, personally, i think a lot of people will share this view, i think we all have great sympathy with the finance ministers and elected leaders in brussels who are now wrestling with these problems. they are huge.

all the options will entail very significant and painful costs. we had the benefit that we are not elected leaders. we are economists and lawyers who can provide our expertise in providing a framework. we do not have to face the voters. the people there now are under huge pressure. as i said, we have sympathy. before i get to the introduction, i do not know how i ended up doing this. i am the designated a summarize their. we have a lot of other experts in the room. when we get to the question period, i have a feeling a lot of people will want to voice their views. i want to express appreciation to everybody. first point, it is at the end of our statement, the world has a huge stake in the of come of this crisis. this is not well recognized --

in the outcome of this crisis. this is not well recognized. if europe goes down, there could be capital flight from emerging markets ground the world. that point lead us to suggest that the imf needs to think about bulls bring its resources -- bolstering its resources. there could be credit contraction in latin america. it was pointed out that a sizable fraction of the banking system in latin america is from european banks. if they are in trouble, there is a risk that money will be transferred from latin america back to europe to bolster those banks. with that on, you have credit contraction in europe. number three, the contraction in trade credit. it could happen all over again. the fact that if europe goes south, the contraction in real

economic activity in europe will lead to a decline in exports from all the countries that now send goods and services to europe. that includes the united states, asia, japan, china, and all commodity exporters. everybody gets hit. fourth, equity investors have a big stake in europe. they get hit directly if markets go down. if markets go down, they could trigger an avalanche of declines in other equity markets and around the world. fifth, the united states money market funds, 40% of their assets, are invested in short- term liabilities of european banks. needless to say, if european banks are in trouble, we will talk about that in a minute, hour investors get hit. finally, there is the unknown, the unknown-unknown. we do not know the extent of counterparty exposure to europe. we do not know who gets hit.

in 2008, aig had to be rescued because of regulators' fears of counterparty risk. we do not know enough about the counterparties and with that there could be another -- and whether there could be another aig. if that does not scare you enough it should. here is what we suggest. it is important to understand there are three problems in europe. number one, there are sovereign debts that are unsustainable. number two, there are banks that are facing insolvency or severe and the capitalization. and number three, this is -- and undercapitalization. and number three, there is differentiation. you have some countries whose currencies are overvalued. their export machine is compromised. conversely, you have other

countries whose currencies may be undervalued. you have this differential that needs to be ironed out. that leads to the next major point that we made. whatever is done, there must be a long, credible plan for resolving these three problems. without addressing these three fundamental problems, the market will not have any confidence in what comes up wednesday with the following week. we will lurch from crisis to crisis. that leads us to greece. i will briefly talk about greece. basically, the bulk of the statement is to say we have to do more than just fix greece. when it comes to greece, the elements are clear. as herald said, the dead need to be restructured. the losses need to be a delicate -- the debt needs to be

restructured. the losses need to be reallocated. add to the broader agenda, the weak european banks have got to be honestly assess and their capital adequacy has to be injured. that can be accomplished by closing some inefficient banks, recapitalizing the banks, or by government guarantees. somehow, the adequacy and safety and soundness of the banking system has to be assured. second, there needs to be ample substantial funds available to support liquidity and to support the bank recapitalization efforts to the extent they are mounted. the money that has been provided by the esf and the ecb are not

enough. there needs to be a lot more. the funds should be available either without preconditions or only to qualifying countries. now, let's get to the really tough stuff. the differential -- the differential competitiveness we talked about. what we did was outlined three alternatives. these cannot be wished away. it will have to be a political decision about what the leaders decide to do. none of these are painless. option number one is what we call the path the passive option. it is to allow the countries in deep trouble to experience a continued deflation. a decline of their wages so essentially they become competitive. that could take a long time. that could be accompanied by

high unemployment and political unrest. you can see it in the streets of greece and other countries. the second option is that some countries could leave the eurozone. in theory, that should solve their competitiveness problem. their currencies would decline and they could become competitive. that could entail, that would entail, significant short-term disruption. that could damage the eu experiment entirely. the third option is to allow higher inflation for the eurozone and particularly for the north so that you get wage appreciation in the north, which declines in the south, accompanied by a deep, structural reforms so that we do not have to do this over and over again. the key here in the third option is that the eurozone would have

to allow for several years the possibility of more inflation to fix this competitiveness problem. the final point we make has to do with banking regulation. it is an unrecognized fact that the basil from mark contributed to this crisis. the basil system, risk-wage different assets, they assign a to all eurozoneate countries. what that has meant is that the banks have a gorge themselves on european debt. now they are stuck. it has given them no incentive to discriminate between countries. it has given them no incentive to diversify their government holdings. the basil system is direct contributor to this mess. what we end up recommending is

the whole system needs to be rethought. in particular, the zero risk rate has got to be given up. we suggest that better standards be developed and among them, a leverage ratio, a simple leverage ratio ought to be in place. a leverage ratio is owners capital to total assets. the fremont has got to be fixed. all of this has got to be -- the framework has got to be fixed. all of this has got to be done quickly. >> thank you. we will get some feedback from people outside the field. we are fortunate to have with us today two senior people from the world bank's and the imf. the first speaker is asli demirguc-kunt. asli.

>> thank you very much. it is an honor to be here. i am a fan of your statement to read it is a pleasure. all of these views are my own. if anything, the bank would probably disagree with them. [laughter] ok, so, i went through all the papers. my task was to read the papers and comment on them, much less so the statement. i think what i am going to say is going to have implications for that as well. just to comment on the one that i read most carefully, because

the first one i received, is the u.s. paper. basically, i agree with what is in there. i agree with the analysis that the macro-policy and the global imbalances made it more likely to have a crisis. essentially, the underlying reason with the distortions that were introduced. i also agree with that the lessons that are in that paper. perhaps, most important lesson is on page 61 where the authors underline again that credible reforms must really address the incentives, the incentives of the banks, regulators, politicians, so that all of these problems that we see that may look like technical problems

are actually incentive problems. the solutions need to address these. here, i am going to say that the question is how, how to do this credibly? how to do this effectively? it has been difficult so far. in that respect, i wanted to say -- give you three thoughts. they are based on my own research and my experiences with developing countries in the world bank. if i were to just mention them briefly. one has to do with the transparency and simplicity. the other one will underline the importance of clawing back the subsidies for the large and the interconnected, the too big to fail. the third is trying to reorient the whole process to focus on

incentives rather than auditing court principles. -- core principles. let me go through each one of them. this is consistent with what you just mentioned at the end of your statement. while we know that the crisis challenged the basil for a mark in an important way. it continues to challenge it. there are flaws in ratings, accuracy in risk market, there is always problems with the risk rates. in one of my recent papers, a colleague thought we could learn something about the usefulness and the redesign of the capital regulations by looking at what happened during the crisis. we tried to book as stock returns over the 2006 and 2009

period over 12 countries. we used this as an unexpected negative shock to see how market prices received different capital recognitions and hell banks' ability to withstand the stress -- and hell banks' ability to withstand stress was based on the capital they held. all banks did poorly in terms of their stock market value. some did that and others. the question was whether better performing banks were also better capitalized and which measure of capital was most informative. this is relevant for the discussion here because what we find is indeed, during the crisis, stock-market investors paid -- placed higher value on higher capitalized banks. the leverage ratio was more

relevant than any other complicated ratio that had been come up with, especially for large banks. to prove this was much more informative than the measure used by the regulators. there was also evidence that higher quality tier 1 capital and common equity were more relevant for stock market investors. what does this mean for the statement here? it reminds me of your earlier statement where you mentioned how it is very difficult for economic capital to be calculated, but the capitol regulation needs not be complicated. indeed, the fact that basel regulations still emphasizes this leads to manipulation which we see time and time again. it is much better to use simple

monitor raise the -- monitoring ratios, which you have said before. i thought that in this statement, i did not see this in the paper, in the statement you need to emphasize the transparency and the simplicity and the complexity itself restores the incentive and makes the banks -- which the markets and businesses -- i did not figure it out that you were going to say that. the second point that i wanted to emphasize is this whole issue about the too big to fail. how important it is to fix the exit mechanism if we are ever going to hope to have effected the guillotine provision. -- effective regulating

provisions. these solutions very. -- vary. i wanted to leave you with some of my thoughts based on the research i have done. so, i believe, obviously, that in producing activity limits which are rude and likely to backfire is not the way to go. the whole idea needs to be clawing back the incentives to become large and interconnected. i want to emphasize three areas. one is hiring additional capital requirements. they need to be structured in different ways to make it harder for these institutions to become large. the second issue is to have greater crisis preparedness in general. outside of the crisis, to be

able to think through what to do in case there is a crisis. when the time comes to do something there is at least a blueprint their which you have thought through, even if you do not necessarily follow it very closely. the fact that you have had it, taken the opportunity to think through this outside of the situation makes it much easier to provide the impression that some things can be done beside this knee-jerk reaction. and finally, i think this is the most controversial point and the most counterintuitive given that we have heard that during the crisis, even though countries that did not have --

those that did have increased coverage, what i am going to argue is to phase out explicit deposits for the larger banks. why am i saying this? we know that explicit deposits are not there for systemic crises. the government step in whenever that happens. it is only there for bailing out individual financial institutions what do we have? we have these large financial institutions that we are trying to claw back. having an explicit subsidies for those do not make sense in my mind. the subsidies -- the coverage is for small financial institutions in order to make them competitive, to make them viable. to the extent we believe these institutions are important for mom and pop operations and communities, i am not saying i agree with that, if we agree with that, there is a reason for having an explicit for small

banks. on the large side, i see no reason to have it on top of the too big to fail subsidies we are trying to claw back. the whole idea for a depositor, when one tries to decide where to put this money, is going to be -- the choice is going to be between an insured a small bank versus a bank that does not have an explicit but only implicit. this would go a way to clawing back the subsidies paid at least i would like to put that on the table which nobody -- subsidies. at least i would like to put that on the table which nobody seems to be talking about. finally, incentives are important. i think we are falling short in discussing how to read-orient

the whole approach of rick -- hud to reorient the whole approach to one that focuses on incentives. the current approach emphasizes assessment of compliance with various regulations. different versions of a bottle -- of basel. i know being a part of the bank, huge resources are spent to emulate these principles in developing countries. we have these financial sector assessment programs which spent a huge amount of resources ensuring compliance with these regulations. i know the whole process. it is captured by the

negotiation -- the exercise of figuring out whether one regulation is adhered to and the other one is not. unfortunately, ironically, studies, and these studies i conducted myself, looking at the impact of compliance with a bank financial strengths find no correlation. there is nothing that seemed to suggest that all of the exercises are helping in making the financial systems around the world more robust. if anything, there is only some evidence that the principle that captured, the quality of information, which makes sense to us is the one that is more highly correlated to the outcome. what should be done? this is my last slide.

basically, again, i come up with a couple of michael of others, are trying to propose -- a couple of my co of others, i tried to propose incentives. incentives to become a part of -- a core part of the architecture. it is the knowledge by the international community. the approaches and the tools that are given to this macro- credential authority are credential at on. -- macro-prudential authority are prudential had on. it should be a means of identifying and correcting systemic risk. i think this whole program, which all of us are spending so much of our time on, should move away from compliance to an assessment of problems drug

individual countries. thank you guys. -- of problems throughout individual countries. thank you guys. [applause] >> our next commentator is luc laeven of the imf. >> thank you for the opportunity. i am afraid i did not go through all the individual papers. it is very important if you think about making policy in parts of the world. i will touch on some of what are the themes i think are important but were not present in some of the papers. i will ask more open ended questions for a subsequent meeting or something like that. i should stress that these are my own views and not those of

the imf. i will echo some of her views. we are getting better -- it brings me to think about how to reinforce the market to discipline banks. we would all like it to work better. what do i mean by market disciplines? the stock market and the bond market's ability to not only monitor, but controlled default risk of financial institutions at large. we have mixed evidence to show the effectiveness of this. in part it is because the government has these policies in place that make it difficult for the markets. above all, we have deposit insurance because shareholder

discipline is not something you would expect too much of because shareholders always want to take excessive risks, meaning more than what would be socially optimal. that is the role of the shareholder. they do not have to back that risk. that is not something to complain about. it is the way it functions. if you want to look at what it is doing, the small deposit, in the more developed financial systems their lives that product that could play an active role. you make this type of discipline. that is where there are a number of challenges. too big to fail is one of them. trying to get these debt holders to discipline banks. i think it is quite troubling that information of banks is so

a precise, especially -- is so in precise, especially in times of crisis. if you would look at the u.s., what happened to the accounting information going into the crisis, you saw the market started to note some trouble with the regulatory measures of capital. the market values of banks, there were large differences between market value and book delhi. regulatory capital did not move all that much if you look at the system as a whole. much of the view in the u.s. and also your. when you get the stress test the market come on the one hand, -- when you get the stress-tested market, on the one hand, it was a stress on the financial

system, it raises some questions there. knowing from the past, the crisis in the u.s. and the japanese experience, regulators often resort -- we have some serious questions about whether regulatory capital is overstated. that is depicted in this graph. the ratio that plummeted around 2008. this is for the meeting u.s. bank holding company. -- the median u.s. bank holding company. it is typically between one and two. it plummeted at medium banks below one. two or three were below. the regulatory capital, if anything, slightly increased. the picture is even starker for

the eurozone countries. how do you go about improving market discipline that is something i would like to call regulatory discipline. obviously, i am echoing that we would need to limit the expansion of government safety net. we need to backtrack. we need accurate financial information. we need to reduce a cut in discretion, which was intensified because -- we need to reduce accounting discretion, which was intensified. we have a particular, i think, a severe problem. we want to rely on the market. at the same time, banks have become so large and interconnected, you see these financial cycles. at the good times, banks are

building up risk. how do we deal with that? there is a need for this. i am not calling for more regulation, just better regulations. the key here is why are we coming up with this macro- prudential regulations? market cannot deal with certain types of risk. market discipline is no defense against macro-prudential risk. the market cannot deal with aggregate risk. it is aiming to protect, not individual banks, but the system as a whole. why it is known for quite some time, it justifies what you need to have it, is because you have it on the part of market. it cannot deal with aggregate risk. what we need to think about its financial stability.

what have regulators done? what have supervises focused on? the risk of individual banks. that is what they are asked to they go by that, that is the paradigm. they need to focus on systemic build up risk. that requires a whole different way of thinking about -- a new framework. the europeans are some steps ahead, maybe, because of a more urgent and obvious need to have macro regulation. they have a framework in place, but are nowhere near to having an affect system in place. the other element that came, it was in the u.s. presentation, also in the asia presentation, oftentimes, banking crises go

hand in hand with credit booms. in this case, very much so. i want to say a few things about that. it is a dangerous type of bubble, not just for the consumer, housing is oftentimes a big time of your portfolio. there is a correlation between of booms and financial crises. not all asset booms are those we should worry about they should not be the target of policy. real estate would be yes in the sense that, if we go back to the .com crash, it was not painful because it was equity finance. you have the financial intermediary is intermediate part to build onto more credit.

what kind of action should be taken? how to develop good jobs. it is quite tricky hug focus on belly's, priced to income ratios -- tricky how to focus on values, priced to income ratios. this is a picture coming out of of work -- of work by some of our colleagues. there is a strong relationship between those u.s. states that showed large wins -- expansion and mortgage credit and those that had a large mortgage delinquencies. the link between housing booms and busts in the u.s. it coincided with financial leverage.

also had theoom's highest leverage. the prudential institutions and the households in the state's have above average leverage ratios. how to think about preventing real estate boom. we are dealing with the mess we would like to prevent. the three policy areas to think about, monetary policy. that one was dealt with in the u.s. presentation. one of the underlying culprits, other government policies, fixing monetary policy to deal with an isolated boom may be too costly. if it is something where you had the entire economy, not just a sector, that is something you have to keep in mind before using it. fiscal policy is something that was emphasized, especially latin

america prices, the best part of it is in real estate, many countries it is a favorite of equity. there are policies in place. there are a number of countries that have policies in place. that is something to think about how to erode these measures. at the same time, i do not want to say that was some -- one of the drivers of the crisis. i do not think there was any link. it was just when the crisis hit, you had a larger sovereign debt to deal with. the macro-prudential tools, there are several schools that have been used around the world, starting with the last provision that made famous, used effectively. although, asian economies loan to value limits ahve been sued

to reduce the buildup of credit. by and large, these measures have mixed success. it is easy to circumvent, especially if it is having to do with capital inflow. there are questions about whether these policies over the long term are in and of themselves linked to booms they are trying to reduce. this is the experience in hong kong. the show to the development of house prices -- this showed that the development of house prices, they were continuing upwards although the government tries to limit house press development by imposing loan to value limits.

they have some temporary relief but it did not do much in terms of price development. what i think is an important open ended question, the first one is what i asked already. how to allocate capital to the most productive use? part of that has to come from improving debt holder discipline. we have put in place new government guarantees. we need to think about how to go back to the system we had before. we need to recognize that markets do fail. especially when you are talking systemic risk. we are living in a world where financial institutions are global. they are very interconnected and systemic risk is suspected to only increase in size.

trying to get the regulator to do its job is going to be very important matter. prudential to macro- prudential, whether you need more institutions, where this authority resides. it opens up a whole other set of questions. i think these are my to do lists on this topic. thank you. [applause] >> thank you very much. we have some time for q&a and with the audience. if i recognize you, please state your name and affiliation and who you are directing the question at. do we have a microphone? here it is.

>> retired from the international monetary fund. as george has taught us, capital is at the core and center of all of this. i have a capital-oriented question. the u.s. paper says the central lesson is the the year to recognize and allocate -- is the failure to recognize and allocate losses to europe and that does not make them go away. the asian paper referred to the suspension of market-to-market, quite contradictory, i assume this is a typically asian way of capital forbearance during a recession. my question is, this is a cyclical the issue of capital, isn't capital forbearance what

capital is for? have a't capital counter-cyclical quality that when we market-to-merket the value of debt and write down capital, shouldn't we permit a period of time for banks honestly disclosing they have used the capitol and the way it was meant to be used to gradually rebuild it over time in the future rather than socking credit markets by attempting to be kept like them instantly at the bottom of a recession? that is my question.

>> it is a quick question. there are so many things to say. what i would say is the key lesson, luc laeven pointed it out, there was a lot of time when the market was still open and capital was declining prior to 2008. in fact, global large banks raised four hundred $50 billion of capital. markets were very open from september 2007 to september 2008. they did not raise as much as they should have. they did not want to delhi. they knew they had the downside protection. what we need is to have some mechanism that identifies those losses and creeps incentive for banks to quote -- replace capital on a time -- and create incentives for banks to replace capital on a timely basis.

it is the result of the erosion of capital. accumulative lost capital that greets the could be crises through counterparty risk because nobody has a credible -- that creates counterparty risk through the fact that nobody has equitable capital. i have some reform proposals that focus on ways to create mechanisms and especially through contingent capital certificates that would try to push banks to have strong incentives to timely replace lost capital. to add to the wonderful comments, we need to have smart capital standards that function that way. when we see that kraft be do something rather than watch it go down until the -- that graph we do something about it rather than watch it go down.

>> contingent capital means this, a bank issues a debt instrument that automatically convert to equity upon some identifiable and. on the paper charlie is talking about, they are proposing that the drug ring and be some kind of 90 day moving average -- that the triggering event be some kind of 90 day moving average. if the price goes down, that would trigger the conversion of the debt automatically into be filled up the capital account. having that stuff in place would be a way of handling the problematic countercyclical fashion. >> back there. >> i am bob, i would like to ask charlie a follow up question.

when you are talking about augmenting capital, the assumption behind that is that the business model for the banking industry can use that capital affectively. if, on the other hand, the model has been so badly broken that any capital that is raised is going to be destroyed in the process, that is what banks do, that is not going to work. i am asking whether you thought about that and the benchmark might be -- when jean ludwig became comptroller of currency he said the banking industry has been in decline since world war ii.

he then said we cannot allow the natural erosion of this industry to proceed. that would set the stage for the interventions we have seen the last 30 years. >> a quick response. getting back to the comments, if you have a real consequence that the bank can anticipate what is that they are bowing to face a real recognition of laws, it affects -- they are going to face a real recognition of loss, it affects them. if the bank is not with recapitalizing, if you have a real disciplined financial system, banks will be managed better. i think we have to link the quality of the bank's strategy with the consequences of bad strategies.

>> his question was more far reaching. he was asking whether the banking model is viable at all. he is singapore and more capital into an unviable system is a waste of money. that was the import of your question. my gut reaction to that is there are plenty of banks at their that are making money. there is money to be made taking deposits and lending and doing a fee based business. it may not be at the level we have right now where the banks are gorged with money. that shrinkage will have to take place once confidence returns in the system. you ask a good question. some parts of the banking model may have to disappear.

>> take a look at what bank profits do now.

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it leaves the states in a tough position. we heard in this room from the governor from utah in february of this year when he talked about how he was building his own state exchange and then the affordable health care act came

along and he felt he did not know what to do. unfortunately the landscape has become less stable in the months that followed. perhaps today we can at least provide a little stability and give people an idea of some of the things they might expect regardless of what happens with the implementation of the affordable health care act. today we will talk about the cost. we're conversant with what the numbers have been. all sides of the election in 2008 talk about those numbers. the number of people have increased in the last 10 years going from 19% of the population up from 16% in 2007. most people understand they

need health insurance. it would be a benefit to them. they're concerned about the cost and find carriers they cannot access or know how to access it is not provided by an employer. research has found the main reason people are uninsured because of the cost rather than the lack of desire to have a coverage. individuals will be required to have health insurance with the exception if no premium is available. this will mean you'll still have an insured population in this country. they pay for about a third of their care out of pocket. about 30 billion in 2008. the rain -- remaining cost is about $57 billion. about three-quarters was paid

to take care of the uninsured. because of the high cost of medical needs, requiring hospitalization, despite the fact that clinics see more uninsured patients. in addition it leaves people at a risk of amassing an affordable medical bills. adults were three times as likely to have been unable to pay for the basic necessities such as food and housing. it is reasons such as these that we want to ensure the population to find affordable coverage. the good news is there and available. it is a question of accessing it and a question of knowing where to go. joining us are experts on this issue who have looked into ways to help the population find affordable coverage. first, a passionate

broker/advocate committed to reforming the issues. in 2004 he founded a foundation for health coverage education, a nonprofit with the mission to simplify public and private health insurance eligibility to help more people access coverage. his input on the health-care debate is featured regularly in numerous publications including the wall street journal, abc news, and cnn. peggy is a partner in a legislative matters that have expertise in working with physicians and hospitals on issues such as medicare payment systems. jostle works with members of congress. shares in nursing education, liability reform, safety and

genetic nondiscrimination. we are fortunate to have these people here today. i look forward to what they have to share. for those of you watching, if you know of someone who would have benefited from this exchange, it will be archived in perpetuity at health caucus.org. >> [inaudible] ok? i would like to do two things today. one is an overview of the uninsured and to tell you about an innovative program in nevada. but first, news flash. the uninsured cannot pay their hospital bills. is this news to anybody?

and those bills are passed on to all of us. news flash. not news. this is a couple of months ago. who are the uninsured? i will go through this quickly. the kaiser urban institute has told us there are 50 million uninsured as of 2009. just over half of those are under 138% of the poverty level. it is about half. the other half are between 139 and a four hundred percent of poverty level. where are the uninsured? they are in the southern part of our country. they are out -- are also scattered throughout. how much does it cost? if you are paying for your own health insurance, how much is it? according to our friends, just

over 10 years ago, it was about $2,000 per individual. now it has more than doubled to four singles and tripled for families. that means $5,000 for coverage. think about paying that bill a year. we know who is uninsured. why do we carry that people do not buy insurance? they are less likely to receive preventive care. they have much higher mortality. and, harkening back, are uninsured problem costs all of us more. health care professionals and consumers. i do not know if you can see this. it is the greatest note -- a giant billboard that a hospital paid for.

e.r. we signed you can trust. are you kidding? this is what hospitals are advertising. there is a note here at the bottom that you can see better and you see this thing, you can access to find out what the wait time is. i think that is sad. wait a minute. here comes health care reform. " this solve our problems? let's say we start with 50 million people. for argument's sake, let's say they are right when half of those people will be covered. of those 23 million, 40 percent of them are eligible for coverage. and not accessing coverage. i remember i went into a meeting with some officials and told them about what i will say in a

minute. they said to us, what if we put you have business? the answer from sherry rice and was that would be wonderful. health care reform is not capable of doing that. it took a few years for people to admit that. where are the solutions? we have been wrestling with this for decades. i posit that there are solutions. we should look to the states. the problems are complicated but the solutions don't need to me. the committee -- as pieces of a puzzle. let's talk a lot access. access is the only not-for- profit medical discount plan in the united states. it is not health insurance or an entitlement program. it is a public-private

partnership. in nevada, access has helped a 11,000 people. they got a comprehensive health care. 1800 providers signed up to do that. the model is self sustaining. it pays for itself in just three years. that is in reno where it began an their expanding it to las vegas. also, this is a big also, 1.5 source% of members go through the emergency room unnecessarily. 1.5%. the way they do this is what they call a shared responsibility model. as sherri likes to say, we asked

something of everybody and try not to overburden anyone. who makes it work? it is a public-private partnership. a lot of people. the members make it work. they pay a monthly membership fee. they take the responsibility. if there is a no show when you have an appointment, you are kicked out of the appointment. that is made a very clear when you meet with your case worker and come into access as a member. that is part of the deal. if you do not show up, you are out. providers offer enormous discounts. i will tell you what those are. the community has given a tremendous amount of money through a fund and a direct care dollars they contribute. with these discounts, if there

is a small amount, it takes less money to cover more people. your donation will go further. the government program also puts funding into access because there are some things the government cannot cover. access will cover the things they cannot cover. the banking and insurance industry are also heavily involved in access. it is everybody. in police can put their employers on access. the banking industry -- so people can save money for when they need health care. the insurers have a referral. they have a separate thing to give to people who say economic forge your insurance. in your packets is a depiction which is useful to take a look

at. who are the access members? he must be currently uninsured. you must be able to show proof of all income such as a pay stub, child support and other money. you have to live in nevada and show proof of a residency. it can come in the form of a utility bill. you most -- must show a photo id. also important is eligibility income guidelines. how does it work? members pay their membership fee and they show up. the members pay in cash at the time of service. they have also become what they're -- the one stop shop for referrals. they take all of these people together.

that is what they do. there referring everybody to where they need to go. this cartoon caught my eye. everyone agrees to cut health- care costs. i cannot afford the diagnosis. do you have a cheaper one? that is funny for us. in nevada, this is what is happening. they find a cheaper diagnosis. for example, for a hospital stay, and on access members would pay about $50,000. out of the pocket. $50,000 for a 10 day stay. access members pay $3,000. that is a huge discount. hysterectomies is $45,000.

on access, $3,500. a broken ankle, $3,000. a lot of money. access, $1,500. huge savings. you're probably asking, what doctor would offer these kinds of discounts? people show up. people come to their appointments. the doctors can give care and the hospitals would rather have somebody paying part of the bill then none of the bill. as a said, 1800 doctors have signed up just in reno, nevada. i think this is pretty cool. i represent the now where and their ceo and board of directors. if you do not believe what i am saying, take a look at their awards and distinctions and

their testimonials. i would like to read a couple of those. i have been most impressed with how they help people return to normal life. many of my patients are nonfunctional because of a problem they cannot afford to have fixed. they can get the problem solved true access and go on to live a full life. employers -- access provides us with a solution that is simple and easy to administer. with a diverse work force, that this thing a lot. the whole package has given my wife and me a new hope. the staff and providers, everyone treats us with respect and care. this has been a positive experience. to summarize, why does it work? everyone in the game has skin in

the game. they are of giving something and receiving something. hospitals and doctors took a leap of faith that has paid off in the end. members are held responsible to the rules and fees and they retain their dignity. the care coordinators have also learned how to specialize in certain diseases. so you get people with more knowledge about to the cancer doctors are. also with the enrollment, it has to be face-to-face. this is a community member who is meeting new, not just on the phone, who is meeting you face to face. they also got savvy and are doing skype enrollment. they also have an incredible staff and a leader. sherri likes to say, when we saw a need, we did one more thing.

then we saw another need ended another thing. that is how you solve the problems for the uninsured. thank you. >> we will go on with your presentation and then we will open it up for questions. >> i am here covering a program that is non-profit and was put together in silicon valley. howard based three board has leonard schaeffer who is the second-largest company. dave was the ceo of bantam and in this team professor of economics. there we go. i did not have the microphone on. i am starting over. i am here representing the

foundation for health coverage education. we have put together a high- tech, low-cost solution to the problems in the united states. our board of directors includes the ceo of hewlett-packard, leonard schaeffer, who is a part of the carter administration. they became the story second- largest company in the united states. and an esteemed health-care economist at stanford. he was also under the secretary of defense. the problem was that a lot of the uninsured are eligible for programs they are not aware of. we put the entire health care system on line. over 3 million americans have used it. it has been around for a long time. through the power of technology, people who need

health care are able to obtain it. 16 million americans are eligible and not signed up. they are using the emergency room as their primary care. they get taking care of and then they leave. the emergency room cannot collect because they do not have the money to pay anyway. with a mission to provide simplified health insurance eligibility information, it enables us as a nation to know and control our costs, prevent fraud and allocate the total cost accurately. we do this because we do eligibility at a point of care. when someone comes into the hospital, it takes two minutes. all 50 states and the district of columbia. the minister asks the questions. we can be confirmed online and

then the hospital or doctor gets reimbursed immediately. in california, we have 27,000 employees who sign people up for medicaid, welfare, and food stamps. the eligibility is pretty much the same. it is based how much money you make or do not make. those employees cost california about $110,000 per year. that is $3 billion being spent on administration. with reimbursement and point of care eligibility, we empower the eligibility. they no longer need to go to the emergency room for everything. they just need to show up at a doctor's office. it takes two minutes to figure out. then we know what is going on.

once we collect that data, we will be able to budget our health care costs. we will know we're spending money on. we will know a fall of the procedures are worth it. right now we have 50 states trying to create the exchange. the exchanges already done. it has been there for seven years. it works and people love it. hospitals, doctors, some of our partners are the most prestigious names in health care. we have the american cancer society. they take one to -- 1.2 million calls a year from people who have cancer. they asked if they have health insurance.

there was really no answer before. they would say it was too bad. now the american cancer society refers them to our health plan where we answer the phone for people and do it on the phone, so they refer anybody who has cancer who is uninsured to us. we have coverage right away. the american diabetes association, all of them are referred to us. then the hospital started using it. now when people -- they see for the very first time, not this person is uninsured but who should have been liable? who did not pay when they were supposed to pay? in california, there are four hospitals with for emergency

rooms. they asked 20,000 patients the eligibility quiz. 80% or eligible for public programs and not signed up. 80.2%. 99.7% were eligible for something. people do not know what they're eligible for. not everybody could afford it. we need a policy and we need to confront these issues. 80%. we called 50 times during working hours. we're spending $3 billion a year in california. we answered the phone 15 added 50 times. 35 times you could not leave a message. the 15 times, you had an average time of 22 minutes.

$3 billion a year, and 80% of the people who come into the room where costs five times are eligible for these programs. it is wrong. with our technology, we can do eligibility at point of care. and you carry that one step further -- further and all the 17 million people will have access. this is already set up. it is working. thank you. >> let me ask a question of both of you and then we will open up for the audience. both of these sound like a solid

ideas. i forgot my copy of the affordable care act i like to wave around a point like this but imagine i have a big book in my hand. why are these programs not included in that law? was there no room for ideals like this? were there better ideas that were incorporated? are there things that are yet to happen that would negate the purpose of having these programs included? what are your thoughts on that? >> there is a provision in health care reform for a tense state, a three-year demonstration. it never got funded. it is incomprehensible that is something -- >> i have to interrupt you. it did not get funded.

everything in the forego care act was pre-funded for five years. this one provision that might have helped someone did not get funded? >> that is right. despite bipartisan support. >> this is an important point. the affordable care act looks like we lavished money on all kinds of programs. some of some more, some of dubious worth. go on. >> leonard was part of the system during the carter administration. he was on my advisory board. when the health care reform passed, he referred me to the

person who communicated directly with the president in charge of health care reform. he referred me to a person in charge of technology for all of this. we showed them what we have online already. they could not believe it. they had no i did it existed. i have already communicated as much as i could. it is hard to break through for real reasons. this time we were there. they were surprised to see that the health care system was already on line and that millions of americans were using it. i offered to share my technology with them. they did not want to do that. they tried to come out with their own. it was not as good. what are you going to do? you do the best you can. we're not doing this for one side or the other but to help america. every day we have 125,000

americans using it. that is how it is. we feel we can save the united states may be $20 billion a year and administration. >> let me take questions from the audience. i do not want to monopolize the time. if you are going to ask a question, we need to use the microphone. let me follow up on my initial question. i guess i do not understand -- even without funding, what would be the barrier to setting up

something like this and other states? are there states that have expressed an interest? >> we're of been talking to several states. california included. here is a model, take it. run with it. how they got started is there was an initial grants to pull this together. in 10 states, about $2 million could be down. that is not a lot of money. at the end of the day, and that is the kind of investment i believe the government should be making in its priorities. i am fearful that this is not considered a priority. >> it comes up all the time for employers, questions to our office. to say you are a big retailer and you have the largest market out there and you have been

criticized for not providing your employees to insurance. so you do that. you provide insurance. it is a fairly low dollar policy and it has some limits. these limits are no longer allowed under the affordable care act. the limits and the out-of-pocket costs better going to be enforced will negate a lot of these policies. people have sought waivers in order to continuing to argue that some insurance is better than no insurance. so the center for consumer information has provided for the past year, they have provided 1700 individual waivers. would your access require a waiver in order to continue? >> it would not.

it is not insurance. it is a medical discount plan. those are part of our earlier conversations. will you put us out of business because we do not fit into your model? as the leaders said to us, what if we could to out of business? they would not. there is going to be this population that somebody needs to take care of. >> it is not affected by the lifetime limits. in theory, it could continue even after the implementation goes off without a hitch. the supreme court to says all clear. your access could continue to function? the argument is it would be unnecessary but some people might prefer that. >> exactly.

>> go-ahead. >> i will continue to badger the witnesses. let me ask you this. he made mention of some of the administrative costs. we are constantly told that the private insurance companies of this country take too much of the premium dollar for other things. presumably those are profits. so the administrative cost is inordinately high. there is going to be a limit on how much of the money can be spent on non clinical issues. rules that will be coming out of you -- health and human services.

you're talking about the public insurance realm where you maintain that administrative dollars -- i hate to use the term wasted but i will use it, how you keep those costs low in your world? >> one of the things they did when they tried to figure out the administrative costs of a group insurance was included the broker and marketing cost. in reality, the company never received that money. it went right out of the day they did it. they do not have that money. it is the group is that is paying the commission to the broker. he advocates for all of the people who are under that group.

it could be the spouse or the employer. there is a lot of laws and accounting and everything that brokers do. when they included that, it threw everything off. insurance companies work on a 3%. that is total profit. all lot of people think they must be making 25%. they are not. they could cut their profits in half and within a few months you would catch it. the whole concept should scare anybody in any industry in america. the health insurance industry has competition, it is tough. it is a complicated business. if they will see tell them how much money they can make, it will not be long before they

tell anybody else. >> one of your points on the hand out is that the foundation could save $25 billion a year. we are already told that medicare is only like a 3%. i would dispute that figure but let's stipulate that is the case. how was the foundation going to save money? >> let me use california as an example. if we did reimbursement, and the patient is out of the picture. if you think about it, one of the biggest problems with health care reforms is they have confused insurance with health care. all of the programs are really prepaid health care. it is not insurance. you're not evaluating risk.

europe trying to give access to health care for the safety net which we need. we all believe in that. they have created a barrier of entry for a single woman with two children at home to have to go down there and get sign up. they can never do it in one tried. it is a huge problem. why go through that? >> how does the foundation cut through that? >> we have a system on line. >> a whole united states health care system? >> yes. you take the eligibility quiz. it takes two minutes. you will see what you are eligible for. it will give you a copy of the application. it will give what you need to take to sign up for something like medicaid.

we're trying to do so they can get it all done at one time. it is difficult to get signed up. in california they are only allowed to sign up to people in vapor person. there is a limit. >> each person in the medicaid office? >> california is in financial trouble. it cannot just not sign them up. that just transfers the crop -- cost to be -- to the private sector. that is why the premiums go up. that creates a cycle that makes insurance companies -- they are only working on 3% profit margin. there is a lot of voice in the system. the whole concept of the exchanges, that is like a 1990's technology. that would be investing in xerox desktops with 8 inch floppy disk

drives. we have the whole country investing billions of dollars in these exchanges. you could set up exchange -- our system is available on your iphone. it is all done anonymously. all we want to do is make sure everybody understands what they're eligible for. or your ipad. that is all on there. you just have to do that. it takes two minutes. it is so simple and the scary. >> -- it is scary. >> he said that this program is not considered. it is not considered health insurance. does that mean that people who signed up for that pay a penalty for not having insurance?

>> the question was if it is not insurance, it is a medical discount plan. under the new regime of health care reform, if you do not have insurance, you have to pay a penalty. when we had the conversation about that, the answer we got was you would not be affected. you would not be deemed for that. how that will play out is anybody's guess. >> wait a minute. how can someone to use u.s. insurance? >> i am not making this up. i do not have any assurances to know that is how bad is going to work. i am hopeful. we hope that those people who are getting it done in a smart way that works for them will not be a financially penalized by how it will work. i do not have the answer.

it is not credible coverage. it is not insurance. i do not know of one of those waivers is coming our way. i hope that those assurances will not hurt us. >> i think they're out of the waiver business. that is myanmar standing. other questions? if not, i have to ask on. -- to ask. states are having trouble paying for their obligations. the medicaid population is going to increase by, pick a number. probably around 15 million is a safe guess with the coverage of a more and more adults, under what should have been a safety net which will now become primary insurance for anyone who earns laura -- below the

federal poverty level. the states are going to be concerned about it. the concern is finding more people that should be covered under medicaid. is this a problem for the future? i understand it will be a problem because we have so many newly eligible people. you said they are not taking care of what they should be taking care of. your point of service would drive people to the coverage that they actually should have. it looks like a tremendous burden for the state. >> that is one way of looking at a. if you think about it, it is a zero sum game. the 15 million people are already using the emergency room and they're not paying. we are paying anyway. it is not going to be more money.

it should be less money because the 15 million people who are eligible understand that there is a doctor without having to worry about paying for it, or least being covered through a government program. perhaps that person that is having symptoms of diabetes is going to go early and get it under control rather than show up in the emergency room with an infection or something like that meeting in amputation i do not see this as costing us more. we see it as understanding where we are. it is the very beginning of getting it under control. you cannot go somewhere unless you know where you are. if we get everybody signed up, we will collect the data. we will know what we are spending our money on. it will be the first time in history that we can actually budget the health care. >> if the states paid more, for all of the people who were

eligible, he radically the cost of insurance should go down. for us, that is not the issue. we want all americans to have access. if we have a program that is passed by law and that person is eligible, they should be able to use it. it should not be high again seek. we will put a bureaucracy in the middle in order to control what our budget is. we want to know exactly what it is. you want to make it accountable. then we can do waste, fraud, and of these control. and we will provide access. >> let me ask if there is -- let's go to the back first. >> hello?

i had a question about coverage. you mentioned is similar to what the health exchanges are going to do. i was wondering how they're going to affect your program in california. >> our program -- she was asking how the health exchanges are going to affect our program. i am kind of like the person who runs yours. if it made sense. what we do it is, our mission is to lower the ranks of the uninsured. that is why we put this thing together. by bringing it together for the first time, people did not have to know the program existed. that is the key. the five questions is an logarithm. it pulls up the program you are eligible for.

you do not have to look at 5000 programs. that is the beauty of it. then it pulls up the application. that is the simple thing. i think california -- and they already use it. we get referred by the department of insurance, anybody who calls them. the referred to us as well as ohio and other states. it is amazing. in our report we have a final. what happened, if you think about it, the people who need health care are sick or injured. the rest of the people do not need it. that is while lot of people do not sign up. what we have done is, with this final, through the american cancer society, the hospitals, the departments of insurance,

all of these people referred to us. all of the people who have conditions or are sick are finding out what they're eligible for a and they are able to go and use it right now. it is a beautiful thing. this happened on its own. we set it up. we had no idea it was going to have this demand. there was a big vacuum. it keeps driving us. they're a lot of things i would rather do. this is so long portage to the country. there's so much demand. we get so many letters and phone calls from people who say you saved my life. i had no idea. we see it as a gift, something we can do as a private sector, and anonymous program. it helps millions of americans. it is all they out on our website. all of our finances.

that is what drives us. we want to help. >> if we can do so under the limits of house ethics rules, if we can put a link to the access and the coverage on the web site. people might find it interesting. some wanted to know the five questions you asked when some becomes into an emergency room. it would find it on the web site. >> if you know somebody who does not have health insurance, send them there. they will find it. it has been up and running a long time. it is coverageforall.org. we have 32 operators who are all trained to answer the phone 24 hours a day. they speak 190 languages.

we can answer the phone in 190 languages. >> access is only for nevada. >> at this time. they would like to teach others how to do it. the beauty of the program is that there is a lot of ways to do this. there is not one answer. " we know there are models that work. we should look to those in use them. >> a very good. we had another question. >> have you considered a point of care? >> it is a point of care. the hospital -- all services are point of care. emergency rooms are expensive. it is online. when a hospital decides to use our system, we integrate it into the system. it becomes theirs.

we stay on top of all of the programs throughout the united states. we just change it and gets done. we centralize all that information so they do not have to. the hospital can use our system. it is an expensive. >> the beauty is we try to keep people out of the emergency room. it sounds like that is where they catch them and try to prevent them. a good ideas from a couple of places. >> i would say your idea is more on controlling costs which is what we want to do as a country. until we know who is in the program, we cannot control costs. they are not there. >> yes we can. we will only answer your medical questions. or we can transfer the cost somewhere else. we should know exactly where we

are as a country. let's be honest with ourselves and not fight. as we fight, people do not have access to care. we want everyone to have access. this is a great country. people need to know that. we can figure this out. we will. it is working. >> i am so impressed listening to you. i can think of times within my practice where i would have someone come in. even if i said you need this done, i will not charge you, then you are up against the hospital. you were up against the anesthesiologist. a way to access that with one phone call as opposed to mahatma -- i got punished twice.

i was not going to get paid for the procedure and a hat to orchestrate all of these other ancillary activities that would surround the hospitalization. i never once -- worked at a private hospital. they would never give anyone a break. this is an exciting transformation. certainly for the person who recognizes they have a problem. i want to take care of it in the right way. this is an opportunity for them to do that if they live in nevada. i hope it is replicated in your instance, i cannot tell you the number of times i did a delivery at 2:00 in the morning on a saturday. the patient would be long gone from the hospital by the time the social worker arrived on monday.

as far as a verifying any sort of medicaid that the patient might be eligible for, the person who could sign them up would be long gone by the person arrived at the hospital. the point of contact, your system works 24 hours a day. is that correct? that would be a game changer for a practice in texas. i was not close to the border but we had a number of people who every weekend would seek services who did not have a social security number but might be eligible under a federal program. then they were lost to the winds because the address they gave was incorrect. contact information was less than accurate. the way to verify when they came in to access coverage for the

hospital, for the position, and it is such a tremendous step forward. it is utilizing things that are already there. i was really struck by your comments on why, if we said we were going to restructure health care from top to bottom, why did we go back and recreate the 1950's programs. surely we can be smarter than that. that is what i like about what you've articulated. there was a way to be smarter. regardless of what happens with the affordable care act, regardless of its fate, and these type of concept are ones that are worthy of study and recognition and implementation at some place. thank you for being with us. as always, we will keep this web

cast up in perpetuity. so what you know someone who would have benefited from one of these programs, the contact information will be available on the web site. thank you for your attendance today. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011]

>> up next, tmz found harvey

levin. on washington journal, we will talk to adam smith about the deficit-reduction committee. and cliff stearns about the investigation into the solar company. washington journal is each morning at 7:00 eastern. earlier this month, president obama sent 100 u.s. military advisers to you got it to help the country fight to the militia group which operates in central africa. today the house foreign affairs committee will look at the decision to send military assistance. coverage is at tenney -- 10:00 eastern on c-span. later, pentagon officials will propose changes to the retirement system at a subcommittee hearing. coverage gets under way at 1:00

p.m. eastern. the creator of celebrity new site tmz.com believes television will be a different business and five years. he spoke and took questions. this is an hour. >> good afternoon and welcome. we are the leading professional organization for journalists committed to the future through programming events such as this while working to foster a free press around the world. for more information, we invite you to look at our website and

to donate to programs offered to the public through our library. you can look at the website there. on behalf of our members, i would like to welcome our speaker and all of those attending today. our head table includes deaths of our speaker including working journalists and if you hear applause, this is my reminder during the political season, and members of the general public are attending. it is not necessarily evidence of a lack of journalistic conductivity. i would also like to welcome our c-span audiences. it is available for free download on itunes. you can also follow the action on twittered. after our guest speech concludes, we will have a q&a.

now this time to introduce our head table. a journalist present does not imply an endorsement of any speaker. i would ask you to stand up as your name is announced. we will begin from your rights. he is a freelance photojournalist and coordinator of our volunteer photographers. thank you for all of that. matt is one of my colleagues on radio. it is good to have him here. myron is an adjunct professor at the school of media and public affairs. april ryan is the washington chief