the instruments. the archery stocks. they were in this piece of paper entitles you to a portion of this company. just like we had security issues for thi bitcoin, the stock certificates saw all sorts as one of the classic incidences. i watch a lot of turner classic movies and it seems like every other movie is about someone perpetuating some stock fraud. i worked in hong kong for a while and you would see the way that the modern chinese are dealing with the stocks that are coming out and it seems very familiar to those movies in the 1930s. the new financial instruments on its confusion about it. a lot of arthur train us david christie si -- arbitrary.

on bitcoin i think it might prevent bitcoin from being around in 2050. sorry. the issue of the crypto currency these are all completely solvable if there is a pointer to it. the amount of security that you have to put in to make sure that they can be secure or outside of what i would even be willing to deal with with a masters and computer security. you have to really protect your self and its best to have a laptop, separate computer that you keep off line that you are only using to keep your wallet. there are some other ways to do it, but as it shows there are a lot of issues in the exchanges. we are still new to this and trying to figure out how it is entirely solvable but it has to be usable for people. there has to be a demand that we are not getting through paypal

or credit cards or other things that is going to make it as an exchange for you and me. as far as the brought a change this might be familiar to some of you. this was written in 1996 the declaration of cyberspace. the governance of the industrial world, giants of flesh and steel i come from the new home and i ask you in the past to leave us alone you are not welcome among us and have no sovereignty where we gather. cyberspace does not live within your borders. you have not engaged in our conversations nor did you create the wealth of our marketplace. there are problems that we need to solve. many of these problems don't exist where there are conflicts we will identify them and address them by our means. the concepts of property, expression, movement in the

context do not apply to us. they are based on matter and there is no matter here. even as we continue to consent to the rules over our bodies. he was a later assist for the grateful dead and that was representing a trend from the writings of the third wave and others in the 70s and 80s coming out of the industrial age into the information age and the government are going to have less power. it's one of the trends that we talk about in to disrupt. the governments used to have a monopoly on a lot of areas and on the force and monopoly on other areas like currency.

this is particularly strong now in the post snowden era and we are pretty sure he is not behind bitcoin. where you start to see people come and especially geeks, silicon valley, the younger generation say the stuff the government is doing come enough already. we can have our own stuff that is separate. we have our own rules that apply. your bureaucracies, we have our own social contract with is sharing media were communicating or having a strong cryptography. if there are problems, we will solve them. cyberspace occurs across the borders. so, to me bitcoin in general is a part of this larger trend of

the geeks and i mean that as a term of endearment, the technical change this diffusion of power away from government to say there are problems we can solve on our own without the government being there to have to solve them themselves. this is a really strong trend. you are going to see it here in the currency and as people say can we invent a new internet that is not so subject to the master surveillance and attacks or are they going to continue to get involved or are other governments going to continue to get involved? i think the money is on the government. it has been in the past when they've had all of their disruptive innovations. sovereignty still matters a lot. so, if bitcoin and other currencies remain something that is kind of difficult to use and kind of arcane and seems

confusing for normal people to use then probably the government are going to stay on one side or stay mostly dominant and bitcoin like other things that start with crypto will remain for those people that are willing to try to figure out how to use it. if it does turn out to be stronger, if privacy turns out to be stronger and we want a more secure and private intranet, bitcoin and crypto currency could fit in with that and we could imagine off to 2050 the 2020 that these could be very much stronger. so i'm a big fan of bitcoin the system of the ledger that says here's a smart way this could get done. it could solve interesting problems whether the actual what

gets mine is going to be the solution i think it is too early to tell. >> let me follow up on one issue that you pointed towards and then we'll have a conversation among the panel and take questions from the audience. the last point you made is this business model what i called at the beginning the block chain basis is already being experimented for in the recent article of the social networks call twister, and encrypted e-mail, alternative messages, domain name systems, so they use seems to be proliferating the encrypted services. where do you see this going in the near-term? as people have heard of bitcoin but don't know much about it.

where is the next application of this type of process? can a guy he really think of what i has been needed us can handle clicks the mobile money has made a huge difference because people don't need a wallet. they can use their phone. you have a technology that has changed that society because it was aimed under society and now they can use their mobile phone not just to get information but to make payments. it's changed society and incredible ways. i'm not quite sure what the need is that we are going to be using bitcoin for. yes it can be anonymous. you don't necessarily know it's going to rob jackie and phil. it's going to need this addressing this address a but te cash already fills that need. it would allow you to do it more easily over the network but how many of us need to have a

pseudonym when we are working over the internet? you can't get credit in bitcoin. there aren't any good evidence. you can't say what's the 90 day bitcoin selling for that allows you to hedge. maybe we can get there in ten years but we still have to find -- it's hugely volatile right now. we will see. >> i don't want to keep chris waiting any longer. he knows the most about that combine appear so we would love to hear your view on the questions. >> thank you for allowing me to go on stage i know fro i'm overe business economics program that you are leadership and scope on this issue is a very important

one. i'm a georgetown law professor so i want to take a regulatory stab that i think it is important to think about in very basic terms what does bitcoin do, what is the advantage because it helps you put your mind about how difficult it is for the regulators to deal. in its essence when you have any kind of transaction between the party, the information relating to the transfer is not processed in a way that one would normally anticipate particularly when you deal with a transaction involving currency. that is quite simply in our modern financial markets, there is an infrastructure for certain kinds of transactions that innocentinessence we have systet

allow the parties based in parts of the world to transact with one another and that effectively validates and concerns that a party has what it says it has and that will deliver those committed currency to the counter party in a transaction. now, what we have in the bitcoin system is very different. instead of having a central clearing mechanism, we have a democratized process whereby all of the participants in particular the miner who receive incentives go out and fact check the transaction to make sure that on the one hand at the party who was given the bitcoin actually has what party a says

it has anything closely related, there is a recording process by which the transaction is recorded and is then transmitted to the world so it creates a kind of public good good once te block changes created. so it is a democratized system people can participate in the information gathering and the information sharing and to a degree is a market based information system. that is what is fascinating and different from the payment perspective. and then they obviously, the interesting part is that it's a string of numbers. it's not just a piece of paper that a string of data created with software that is given

value that is undergirded by space that a normal currency is backed by the space but it is generated by certain digital communities as opposed to national. thof the participants in that community ultimately give that data the value that the other participants in the system agree exist. that is a 21st century phenomenon because on the one hand you have these new platforms and data and young geniuses at penn state sitting around and it's something to create the computational models by which you can continually process the data candidates

responding to a world that has a growing skepticism about finance and money, about counterparties and finance. then you have the regulators. one of the main reasons one goes to all schools because they cannot do the computational models that allow them to the hedge fund. my students grow up to become fancy lawyers and regulators and it is useful to sort of think about what then is the place of the regulator in the world in which. what an algorithm is you have to say what is the infrastructure

behind the system and what are the relative weaknesses and how does it relate to your own specific mandate. the fact we have a 21st century currency in and of itself creates problems because no one really knows if it is currency or not. i just released a book myself this last week that is basically this idea that the multilateral system of the brendan woods era is under stress. the foundations of the international economic diplomacy are under religion. certain aspects or characteristics is that you don't try to aspire to the universalist that everybody is involved. sometimes we have certain communities. second, you don't necessarily

rely on the economic affairs with the formal legal obligations that the informal obligations perhaps and finally the last is the fact that we are losing this dollar that focuses on different kind of blocks but we are dealing with a different kind of block and increasingly the system. no regulators ask themselves what does all of this mean? but could bitcoin be considered to be? because you can't regulate anything if you don't know what it is so what are some of the contenders for what it is? so you could view it as a commodity currency however we have an entire list of what the

specific data costs for the commodity. but here you have a theme that has an exchange value but it doesn't necessarily have a value from the perspective of the consumption. you do not consume the same way that you eat. so this creates a kind of question is this a commodity? a currency was discussed. we use this term in a larger rhetorical sense. those economic and legal. the currency as an instrument of payment. on the other hand we have a payment that is not universally accepted and it isn't backed by any government it is considered a store of value for many of us in the room you know that bitcoin has fluctuated beyond

the means of the fluctuation one would associate with other kind of interest. it doesn't need to the traditional concession. the unit i don't go to the store in which my baseball bat is done nominated in tha bitcoin. if i go online it is rare that i see any object necessarily denominated. i use bitcoin to pay for it that the unit of count is some other currency. so it's hard to think of it as a typical currency. is it an investment? may be its security. i see in the background someone that has been in the security. the security lawyers have a definition of what constitutes the security. and there are certain key

elements of what the security is with no commonality. you don't have lots of folks participating in the same way which one participates in the bitcoin. maybe we will call it an asset and that is what they are going to say this is property that it is very weird because the property is not always given this anonymity much less pseudonym so then how do you address ss property rights that you have the fluctuations but you don't necessarily have identities created in a typical property-based system and then finally is it a then we will say it's not a currency that it is a payment system. we've already had the different participants in these burly and young miner that create a ledger that has been broadcast to the world and therefore it is a

settlement system. that's hard because it isn't centralized. and the different parts in that settlement system don't operate in anything that we have seen before for the reason that they have tried to call it a money service business. to make them more compliant with the customer money laundering systems. but even here there is a certain question as to what is the integrity of the payment system where you have not only the exchanges themselves, or you have these folks that can create ponzi schemes around the bitcoin system. what happens to when you keep the bitcoin what is the

integritbut is the integrityof e digital wallet. it doesn't look like and doesn't seem to pass the same kind of institutional muster that one associates with more established regulatory systems. so, as a result, each of those questions is a commodity. is it secure in the payment system? is it a currency? how you answer each of those questions leads you to a different answer of who is in charge. once you get to the question of who is in charge, sometimes various regulators can look at any particular aspect and say that's me. then you have possibilities of overlap, confusion and the like. but to top it all off, you have a very dynamic system that's always evil thing and it's deeply international. we run out of tokyo that creates

new kind of stresses and challenges for the international regulatory system. so from the regulator's perspective, things are just started in washington, folks are going to obviously b be employig the young geniuses to help them figure it out, but it's very hard to formulate a response if you don't know what it is or who is in charge. ..

>> that was the greatest set of late 20th century jargon from the government that i've heard, and it's not wrong within the confines of that system, but it is a nation state-based system and it is asking nationstate based rules. and i think all the bit of what jay is referencing and our friend here is referencing, is that there are people now who wish to work outside of that. and the question is in terms of international law, whether or not, in fact, we have those kinds of controls. again which he said is perfectly -- run down the list i can hear exactly what you're saying but those are nice dollar-based,

bretton woods system kind of rules. the thing i would say to you is do we need to think more carefully about how those rules are designed? i think you talked about that. perhaps approaching us a little differently. >> i was describing with the regular the response is currently, as is being developed -- regulatory. let me confirm it. so just how difficult it is to i was simply trying to explain to people what the process is unfolding. to your point, do you then look at a big coin -- a bitcoin as an asset, as a property? sounds interesting enough. well, then that means do you have to figure out a way to tax any appreciation of the bitcoin in any given point in time where there's a wide fluctuation? so when for example, the irs makes it release, tax bitcoin, everyone is saying in his system

and there's a large degree of of pseudonymity not mentio mentione are wide fluctuations on a daily basis, not to mention you'll be able to write it off or you can't write out the losses but that doesn't seem like a very viable approach to always be there looking at it like a commodity. >> precisely so there's this question as to how viable, or how exactly would the iris do this? when you talk the international aspects, germany will i believe, and i'm talking later today with the head of -- called this to a digital commodity, whatever that is. on the other hand, some countries have called it a currency which obviously gets your banking regulators involved. the fcc is worried about fraud. again to your point, tries to

come up with an approach that is where the market and technology has outpaced the regulatory infrastructure. you're not going to always end up with the optimal results. one of the challenges that argue in my book is the snake is sort of update how financial market participants and authority talk to one another even across national boundaries. i will say one last thing though. depending on the size of the bitcoin market, that's where you have certain kinds of issues but as i tell my students, always remember this, you choose, young man. i love the fact i can say young man. spent i'll write it down. [laughter] >> how do you spell that? >> young people twitter.

cheese attracts rats. the question is, once you start to create value, once you start you great value you will get lots of shenanigans. lots of jamaican immigrants, all the examples i don't has mentioned. silk road, ponzi scheme. that doesn't mean it is inherently good or bad but it does mean that where you have certain kind of opportunities, you know, folks -- maybe not always the best of all people with the best of all motives. sometimes hereditary mechanisms are not nearly enough so the question is how do you leverage the power of the crowd actually dealing with crowdsourced information, and how do you model the market and get the market involved in a way, you know, i work into something's with the self-regulatory agency. how to get market participants

involved in a way to speak to 21st century problems where the problem outpaces the human capacity, intellectual capacity and regulatory capacity of these. and that is precisely why we are all gathered here today. >> and to bring it even a more practical perhaps, will governments allow a system that allows money to be moved around, that there's no, know your customer requirements, you've got an address, a mobile phone and you can essentially signed up. governments, especially since 9/11 have been particularly strong in saying you've got to know who's working with you. you've got to know signing up for a bank account. that allows the money to move across borders without salute no visibility by the government. one of the reasons i suspect why russia and china are particularly not like it is, not

just because it can be used for illicit purposes, because it completely evades capital control. if i were russia or china would be paranoid about this because of capital. people want to get the monies out of both countries and to get into safer currencies. and those governments have controls on what monies can be allowed to leave the borders. there are no such controls on the. so to imagine the are a lot of government interest involved in trying to stop something like bitcoin right now. now, can bitcoin really be able, if it roasters becoming important, stand up not just against the u.s. government and the irs try to figure this out, but very dedicated bureaucrats to what extent that any such as the that they can't control speech and what they want to control the transmission of monetary policy. as you say. >> there's a lot backed up against it. >> not all necessarily, not all

of that control businesses to the good and in a way i would put it reflective of the values that the atlantic council stands to promote. [laughter] >> i'm giving kevin and little protection here in defense, but he can do it himself. kevin. >> a couple points i want to give my point -- as was mentioned, it's a lot better than bitcoin view that barry -- bitcoin does have an identity crisis. nobody knows if it occurred to come is it a stock? i don't know a lot of terms who's talking about. [laughter] i haven't taken economics get a, but nobody knows what to classify. the easiest thing to do is to say, to fight tooth and nail come is a currency? is a stock? in reality it's kind of both. as we were talking about

earlier, some people just want to treat it like a currency and some people view it as a stock. so it is the best of both worlds where if somebody wants to have a look at the bitcoin and make transactions they shouldn't be penalized as if they were bartering stocks your and another name that was thrown that there is not docks, the online exchange for bitcoin. they were the people to go to if you want to exchange bitcoins 2-dollar yen the pesos. whatever. and the funny thing is that not many people know where encouraging. it stands for magic the gathering online exchange. it was basically a platform for trading card game. when it first came out and 2011, it sent your password plaintext overcome you could see a password on the url. any script kiddie and his mother could find your password. >> not my mom.

[laughter] >> and to basically this was built on a platform that was expecting -- bitcoin was you work and you couldn't avoid bitcoin if you want to but it was worth less than a penny a going. so the build on the platform that was doomed to fail. as bitcoin start again more and more popular be they just kind of added more servers, packed up, date code. so reached the point where there were so many holes and gaps but they were just too big to stop everything and rework the entire system. of course, eventually they were hacked into and the bitcoins were transferred out, or so they say. a lot of people are like, they just hightailed and ran. so that was something that was favoring early investors. in the day that mt. gox went down i got so many texts saying so, ahead of bitcoin failed. no, it's just an exchange.

bitcoin is fine. and so the system really does favor early investors, like if you're to invest in apple or microsoft early on, you'd get rewarded for that. and another thing i wanted to talk about was, it would be nice if the irs were to talk to a bitcoin expert on where, what points they should keep in the regulatory matter. by now that they have something on paper, something sort of grasping it. i really do believe the bitcoin committee will be able to work with them in educating them on what they should do, what works. it's something that bitcoin people believe is stupid or just outlandish, they are not going to follow it. they just won't pay taxes on it, which is lose-lose because one thing is illegal and one is not getting taxes. they need to work together to come up with a policy that works for everybody.

it would be, worst case scenario, the wonderful thing about bitcoin is that governments don't need to approve it. bitcoin can function completely normally without government intervention. so government can ban -- china has been in the news lately because they banned a going from -- their currency to bitcoin and bitcoin to their currency. at the transacting on in the bitcoin, that's completely fine. and even if the work is said don't even touc touch a bitcoin adopted would still be able to do it. so think it's just a moot point for government to ban anything with bitcoin. because that's up with attraction is moving to direction is moving back towards the power to the people, and the government are having a hard time with it. but it's going to happen anyways so you might as well just not fight it. [laughter] >> tell that to the irs. so now we will open it up for

questions. we have a number -- the gentleman here in the middle with his hand up. we will grab everyone over here. >> my name is martin apple and i'm sorry i can't be puffy but i will do it again. i want to look at this as a different phenomenon. to me, this is an experiment and the alternatives to currency as we have known them. and whether it fails or not is irrelevant. it is going to be probably succeeded by yet another experiment and until people get to the notion that everything that we have always embodied as something physical in the digital world doesn't have to be. secondly, everything that is in the digital world is so universally distributable, that it's out of federal controls of any particular country, and there will always be some kind of a threat. so the question is how do we want to learn to live with this

new evolution? because i think trying to stamp it out will not be the successful story. i think it will continue to evolve and create until a successor does occur. >> so, you made an excellent point i wanted to bring up. when the internet was first coming about and servicing, congress had no idea what to do with it. there was a lot of discussion on just completed stamping it out, making sure it didn't, you, cause any harm or do drug-related activity. than today, you can do anything on the internet. you can do anything, you can get drugs, hitmen, whatever. spent what have you been doing on the internet? [laughter] >> sorry i disagree with you earlier. anything you said is great. [laughter] >> don't mess with me. but basically when it first came out, it was textbased because completely unappealing to the

average person who just wanted it for e-mail or just a look at funny pictures of cats but you couldn't do it without knowing whatever coded language it used at the time. and then innovators like google came up, apple, just basically was able to have it, if people want to get really technical they could, and if people wanted it for e-mail, that's fine, too. i think bitcoin is somewhere in away that right now it is a good point that it's not natural for people to have something need to be so secure because if you have $100,000 in bitcoin and then one day you leave your computer on or you go to the wrong website and to download the wrong things, it's gone. so that's something that in the next khmers i'm sure that developers will be able to help people make it easier for them to make this a viable method of exchange. exchange. >> i think one of the real problems here is that this is a

20th century down with 20th century ideas and 20th century institution. i keep saying that, that's what we grew up in. this is the 21st century. this is about the cutting edge of technology, but it's also about jumping generations here, too. i'm less concerned about -- not less concerned, but it interest me that many world -- third world countries or underdeveloped countries, -- i could see an unstable countries -- unstable countries in africa. are you kidding me? this is great. so while it's interesting that we are of course the status quo, and we're status quo power and we're protecting ourselves here, that in pakistan is going to go on. i quite agree with you. i think this will go on quite well in terms of the 21st century. the challenge of course would be for these guys down here which is how deregulate this in a nationstate? i don't know how you do that,

frankly. >> one of the first things to do is to write up something that you don't understand, or at least be very careful at least when you regulate something in fact you don't understand because you do want to make sure that you the opportunity for that, for technological innovation to develop. i did want to make a couple of basic points are it's not just the chinese just wanted -- they are really basic power politics, interested about controlling the national mantra supply and the like but there were questions about showed a bank be able to lend -- should a bank able to lend money to a broker giving and bitcoin? in the 2008 posted enterprises will that becomes not a 20% your bubble but because the problem of the last couple of years. what should be the relationship of this new payment system -- was should be the relationship

between 21st century payment system with a 20th century payment system? like that is something that you cannot just overlook. and so, and then how does a 21st century -- how does a 21st century exchange deal with a 20th century exchange. we are using words like a ponzi scheme very, very -- you know, loosely but how that is an old school problem that works itself out in very interesting ways when you have a potential bitcoin exchange. the only reason why i'm saying this is because, bitcoin offers some amazingly interesting opportunities. on the one hand, one of the drivers behind bitcoin was in an age of what appeared to be western prophecy. you had the opportunity for individuals to create value among themselves where you're not entirely dependent on

ostensibly purely politically driven government decisions, right? so you give this opportunity for people to great their own hedge to protect themselves. it creates essentially or in some ways when done right, you know, by cutting out certain kinds of middlemen and by employing minors it at least offers the potential prospect of being able to make payment transactions in a way that is more efficient and less costly to people in the marketplace. so it's not like it's all coming out of nowhere. at the same time wherever you have the internet and have the opportunity for human trafficking or hitmen -- please don't hurt me -- obviously coming, both of those problems are age-old problems that you a new life when you have the 21st century technology. answered even at the nationstate level there are questions, and

to the when the nationstate looks at it, ma they will ask themselves how can we regulate the a lot of times the question is they will never be able to be entirely successful but we just want to make sure. regulators and market participants are as good as possible and to keep a certain dollar open because they will not be able to cure all the downside with just one for sure. >> let me collect a couple questions. >> please identify yourself. >> charles. i'm from new york. [laughter] >> microphone. >> isn't that right? >> can you speak into the mic? >> yes. i'm a recent graduate from fordham law at am writing an article right now on bitcoin,

and i would like to create either a market and law and this is typically. i share your skepticism regarding the regulation. in regulation you're always wondering about the policy behind it. i'm directing my question though to doctor brummer. you expressed the problem of basically regulated trying to basically fit a square peg in a round hole. that's not a unique issues surrounding bitcoin. is generally anytime something is new you are dealing with the traditional system. i'm wondering whether perhaps the best way for regulators who are facing serious issues, real issues and were unique regulation and good regulation is whether they should look at bitcoin and define it by its function isn't trying to look at is this a commodity? it doesn't fit into the traditional norms of what a commodity is, and what looks like a currency, regulate as a currency. obviously, not just to regulate

regulations sake but for serious real issues. >> i think what, i think it's a great point. and the 21st century of have a much more objective base process we want to ask yourself, what am i trying to do before i get involved. but understand what you want to do again yet to answer basic questions of what it is, what is the nature of the problem i'm trying to deal with. and in a new technology, this is not, bitcoin is a great interesting question but there are other important ways in which technology is impacting finance. you can look at everything from high-frequency trading to crowdfunding to all kinds of related issue areas where you get crowdsourced information and new technology and new platforms

that impacting the way people do business. you have to take a step back. in bitcoin i think is particularly difficult because of the math, because of the fact that to do with pure data and it stretches the human capacity intellectual capacity of lots of folks over at agencies, including myself. what i try to figure out, what would i do? people will call me as well and see what would you do, what we do? i can't tell you exactly how it would come out, i can only give you some basic idea of the process that i would undertake to begin to figure out what i would do. and i think that's the best and the wisest course for most of our regulatory agencies because everyone is try to figure it out the particularly when the market participants themselves, granted

the rest of the world is a little dumber but nonetheless actively for the market participants themselves that there is a challenge for them to fully articulate what it is that they are doing. and in that kind of world you have to move to create a smarter dialogue and a smarter process. and i have ideas of how you would get that up and running but i can't tell you precisely right now. >> take quicker questions because her time is running out. if you can keep your questions short. >> thank you. i'm the treasury of the bank in washington and my very much involved in transactions on a daily basis. go back to the questions about rules and saw. would it be in the bitcoin communities own interest if you mainstream bitcoin? wouldn't you becomes dead of winter, to try to get what it is an regulate, would it be better if you said please, help us move bitcoin into the mention because then you will become a dominant exchange of value?

thank you. >> national intelligence university. my question along your lines is it inherently beneficial for the government to get tax revenue and not make its citizens a criminal win-win situation. how does a government help provide better security and have access to the big paper trail, that ledger you call, that way the irs contract and made when you fire taxes yet to give your public account domain, username so that way they can help track for tax purposes? for you, doctor, can you explain money service manager versus exchange and how that will affect tax filing purposes and how you maintain being a user and not become a money exchange manager? >> let's take those two questions for kevin and chris, and then we will take a couple more. >> you a question is basically how would a government be able

to track your funds and, therefore, tax them? summit. >> for social security. [inaudible] >> i think it's somewhat to the first question which is, is it a useful approach for the bitcoin community to help figure out the regulatory approach that works for all parties. >> i do completely agree that there is a need for coming in a, bridging of the two worlds. as for how they would do this, they could theoretically give the government, your public address and if because bitcoin is based on a public letter they could see exactly who you're paying a two -- not like you but they can see the addresses it's going to come and then where

you're getting the money from. so it could adapt maybe to like it or using it as a currency, maybe because i know tiger direct and overstock.com, accepting bitcoin as payment. so maybe if you're doing transaction like that maybe the tax purposes will be a little different than if you're using an address for something a little bit more substantial, more like a car or a boat or something that would need a little different tax implicati implication. >> hold on a second. spent just to say, the money service is just to do with whether that you look as a payment system and irs is asking module basic questions, is it a property or asset that needs to be tax? want to jump off on one thing. the irs has said that even using the public key, that they can in certain instances backtrack and look at the patterns of certain

kinds of payments, even using the pseudonym to be able to identify the real person. the wizard behind the curtain. for each transaction. but the power and the time required for each of this stuff is so extensive that it would be very hard under, in today's world and to be able to regulate every bitcoin transaction but instead, like the irs and the idea of looking at the money services industry, the idea is how can we better make sure that bitcoins aren't being used for illicit purposes, in particular, money laundering, terrorism, narco trafficking spent which put you in a position which part of the government has that capability. and i'll give you three letters that do. [laughter] after all said and done there's only one that has that kind of computer capability and do you want to do? >> i think it's in a very difficult place to get the bitcoin committed to stand up to

the. you can get there a couple of ways but either they're threatened by extinction by regulation, government crackdown so hard that it's an item of last resort. so many folks in that community see anonymity as one of the reasons for this system i if you have anonymity and assistant, what's the point? why don't you just use dollars? i think they would have to be some value but if you come forward. if it's kyc, an it's easy for an exchange to exchange will be recognized i the authority to kids easier. more safety and security. if you come out publicly to be associated with your private key and associate with an exchange. there are benefits that come from the. you can imagine other ways we have done this that you come out, but it's not like bankers. it's not like you can go to ubs and tell us everyone who ever is because there's no real they are there. as you do in going after other corporate. i mean other sovereign, sal

burns that have corporate banking secrecy laws spent unfortunately were out of time for questions or any last comments from any of our panelists before we formally and they see the? >> i must tell you as a member of the intelligence community, i think i would have a numbers problem dealing with his. i think for both a counterterrorism standpoint but also from the standpoint of what this does to nation's currencies, especially beginning in countries where you get unstable perches. are going to get a class of people that are using this in the elites for instance, and has that going to affect their behavior for the government. >> so two things. one after this if you want to see my mining rig, i worked so hard on it, i'm happy to show you. and the second is, you know, we're talking about bitcoin here but like i said before, the greatest get bitcoin is given us

is a blockchain.info the way they can do something like this without needing a central authority. so in the next five years is it going to be bitcoin? maybe. who knows? but i do know that there's more and more people getting interested, more and more ingenious developers, even smarter than me, who will create something that would just be able to make crypto currencies something that everybody would want and everybody could use. spent i been skeptical in the brodom -- broader term. look at what we've been going through this last week on ssl. it's open source, people and look at this standard for years and years and years to the internet is fundamentally insecure. at almost every level, even those places that have had a lot of scrutiny. so if crypto currencies are going across, they've got a lot stacked against them. dollars at the end of the day,

you can have counterfeiting, that happens. you can have inflation to it tends being an issue we can get past backed by the full faith a united states government. or whatever whatever government. when you have easy to problems in wednesday's crypto currencies, it's more difficult to get past. it's 51% of miners agree on something, you can make changes to the standards in ways that allows power and energy you just don't have been fiat currencies, or only left to the sovereign. i think that a lot of things were going to have to get through. there's a lot things that sound like a good idea on internet but then to work out. we don't order our groceries that much. is because something make sense, just because it's technically possible dozen it's going to happen or else we would've all gotten you you on jet packs. >> i guess i will actually -- speaking of jet packs. i think that the core question

of what happens when you digitalize information and what are the new kind of opportunities it allows market participants of all shapes and sizes to connect with one another and to transact with one another across borders, it's not in the bitcoin iteration. one of the challenges will be exactly how do you engage this phenomenon, that is fundamentally reshaping our society? >> i could go on another two hours. i've really been educated and also entertained, but please join in thanking our fantastic panelists. [applause] >> thank you. >> [inaudible conversations]

>> 10 congress's -- one of congress's longest-running member says he has plan to not rerun for election. you could read more details on the c-span networks. in an hour, secretary jack lew will hold a news conference. the imf, the world summit are in washington, d.c. will be discussing the state of the economy and the situation in ukraine. the house budget committee chair paul ryan will be speaking in cedar rapids at 8:00 eastern.

he will also have remarks later tonight. you could post your comments on facebook and twitter. tomorrow morning on "washington arinal" we will hear from hegewisch and peter morici. and your phone calls, facebook comments, and tweets all on "washington journal." finance ministers meet in washington. christine lagarde discuss the imf's plan to loan up to $18 billion to ukraine. she hopes the a authorities will deliver on their commitment, china's global markets, greece, and deflation in the eurozone.

>> ok. thank you for the photographs. good morning, everyone. welcome to this press conference. thank you for coming. very nice to see you. we are on record this morning. we will get your question shortly and we ask you to keep them short. stake to one question please. it is my pleasure to introduce to you the managing director of the imf, madame christine lagarde and the first deputy managing director, david lipton. with that, let me turn to madame lagardere for opening regards and we will get to your questions. >> thank you.

good morning to all of you. welcome to the 2014 spring meeting. in will have seen numbers the wheel that was presented a .ouple of years ago respect global growth at 3.6% this year and 3.9% in 2015. the merging markets and the developing economies into new to be the main source of growth even if a bit slower than in the in 2015.5.4% they danced are finding new strengthening with growth projected as 2.3%. this year and next year as well. our overall message to the global economy is turning the corner. the recovery is still too weak

and too slow. the bottom line is fairly good, but not quite good enough. we can do better. for some, despite the fact that growth growth is strengthening, they are not feeling it. we still have 200 million people unemployed. i know you have received our paper overnight, and i hope it made good reading for you last night. we are sharing it with you for the first time in advance. whatrobably wonder policymakers are going to discuss during these meetings. that the overriding

topic for discussion will be the topic of growth. higher growth, better quality growth, more inclusive growth, and sustainable growth. what does that mean in practice? view,ns, in our overriding a trio of hurdles. first, an extended. period of low inflation in advanced economies. the topic has been discussed. we are concerned about this potential risk in advanced economies in the euro area in particular, where we know that long, low inflation would hurt both growth and jobs. in that context, it is encouraging that the ecb as -- has reiterated its commitment to use unconventional measures as needed.

second, we need to act on growth , because it is too low. that includes policy actions across the board. in advanced economies, they need to get the pace of fiscal adjustment right, and monetary policy right in due course as well. it will be about timing, about execution, and about education. in the emerging market economies, they need to strengthen credential policies to safeguard against market volatility. where growth continues to be strong, they need to guard against the rapid debt buildup. that needs to be watched. -- we need towth

guard against the risk of low growth in the future. to deal with that, we need ambitious and coherent policies and to secure global financial stability. countries,all advanced, emerging, and low income, need to step up structural reforms. that is certainly the case in service markets, but also the case in labor markets. well targetedthat investment, whether private or publicly funded, are needed in quite a few countries, not all. it also means renewing the momentum on global financial reform, and containing financial vulnerabilities emerging in hotspots. non-bank sector in the

united states and china and high corporate debt in emerging economies. that is taking place against the rising risk of geopolitical nature. how can we get to that destination and waste those three hurdles? what is also needed is cooperation. that the recent g 20 meeting that took waste in sydney, it the rightthat with policies undertaken by the , growth couldies be higher by two percentage points over the next two years. that trajectory could improve the situation of those economies.

what is the imf doing about it? the fact that we are all here, 188 members of the institution are represented here , means simply that the imf is the ideal forum for cooperation, for communication. a lot takes place officially in big public meetings, but also bilaterally in private meetings advancee twice and resolving issues. our global membership has asked for support. we are actively helping the australian presidency in regard to the 2% objective and how we can measure it, taylor it. mustis also why the imf the reformed. and that reform, as you know, is the reform of governance, one i

had hoped we could celebrate on the occasion of this spring meeting. and we are still longing for. the entire membership and certainly the institution as well. commitment,ortant commitments that were made by the entire membership back in 2010, to be delivered in 2012. we are in 2014 14. it has not happened yet. are we giving up? no. it will happen. how quickly? through which path? with who support? i hope the entire membership, and i hope that happens soon. it is important because it matters for the credibility of the institution. it matters for the size of the institution. and we certainly look forward to a good dialogue during the imf on those issues, so we can

rally support across the board. thank you. me turn to your questions, again asking you to keep them brief and to the point. we will try to make -- take as many as possible. i will begin on the left, with the lady right here. thank you. >> thank you. "china business news." wena's economic growth -- have just seen the very portrayed data in march. they've china's authorities were to continue to use the depreciation of the rmbs a tool tosupport economic growth, reach its goal, forecast 7.5%, which is also the imf forecast for chinese growth this year -- what would be your comment on that? thank you. i think you are jumping to

conclusions. took the recent increase of the band of variation of the renminbi as a move in the direction of the internationalization of the currency. i would not characterize it as an intended depreciation of the currency. welcome thee internationalization of the renminbi, going forward. we believe there will be steps in that direction, going forward. china's contribution to international growth -- clearly, china is laying a key role, with 7.5% growth target for 2014. it is clearly contributing significantly. from the various discussions i've had two weeks ago when i was in china, i took great comfort from the fact that the rebalancing we have advocated beingime not only is

visible in numbers, but is also the intended policy of the authorities. right,g over to the gentleman in the second role. -- second row. >> how concerned are you that the new imf program could go off track? it put imf credibility at risk? thank you. when we do negotiate on the ground, when we do work with the authorities, with support from the entire membership of the imf, we do not forecast failure. our plan, and the conditions under which we enter into a program, is for that country to deliver on its commitment and

restore its financial situations, so that it can finance itself, refinance itself, and operate without support from the imf. conditionsctly the under which we enter into that project. which, by the way, is not yet completed. in the agreement in ukraine, 10 days ago, the board has said several times in an informal standing -- we hope, provided the authorities deliver on that commitment, which we have every reason to believe they will -- we hope to review that program and submit it to the board at the end of april, or in the very early days of may. >> gentleman in the middle -- you with the glasses.

>> chris giles, from "the inancial times." the imf regularly gives other countries and organizations , most recently asking the ecb to launch a policy. given that there does not seem to be any sign the u.s. congress will change its mind about funding, is it time for a plan b for the imf, where you circumvent the u.s.? know, i hope that we can exhaust all the opportunities under plan a. i do not think our institution should move to plan b until we and massivertainty disappointment that plan a is definitely dead. i am not prepared to declare that at this point, and i very

strongly hope that the resolve of the institution, the pressure brought to bear by the members of this institution on all those who have not yet ratified, will deliver fruit in the not-too-distant future. >> going to stay in the middle. the lady in the white jacket. lady in the white jacket. thank you. about japan.n is your projection was 0.3. do you still believe in economics? if so, -- still believe in abenomics? if so, why? do you have any concerns? when you meet the minister this afternoon, what do you expect from him and what do you recommend to him? >> i listen very carefully to abe's minister ave's --

description of the three arrows, and those described by finance minister azo in various meetings. what was delivered has begun to work. we are seeing inflation rising, not yet to target, but significantly in japan. we were very pleased to see that the commitment to increase the consumption tax from five percent to eight percent as of april one, was delivered. believe that a medium-term fiscal plan needs to be articulated and needs to be consistent. we hope to see that. arrow, there are many reforms, many changes of a structural nature, that have been touched on. not yet completely articulated by the japanese authorities. when i have a bilateral meeting azo, iinister also --

will discuss what the timetable is and what the extent of the reform is. i will particularly focus on the inorm of the labor market order to consider access for japanese women. is a very it important component of the structural reforms. it is not the only one, but clearly the japanese authorities have signaled interest, have responded to recommendations, which i was very pleased about. and i will not give up on that. >> thank you. i am going to come down to the front row. front row. thank you. >> thank you. i was impressed with the demand .or a five-year issue however, the imf program is

ongoing. counting onis still fiscal sector report to make its debts sustainable. do you still believe the debt restructuring is necessary? and when do you expect it to be concluded? >> it is the case that greece is still on the program. and we have recently improved -- approved a review. shows that after significant discussions and work being done by the greek authorities and the great people, progress is underway. i see the issuance that took indication as an that greece is heading in the right direction. the water testing the authorities wanted to do is really successful. there is still a lot to be done.

the program is not over. this is on the horizon. >> i am with the russian news agency star toss -- tass. obviously, are you now closer to understanding the range of the contribution of the imf to ukrainian program? supporting the ukraine for a number of years. is this for ukraine to be

consistent with its debts to russia, paying their our rears and being current on current ?ayments thank you. >> the ukrainian program -- project of a program. it will be a program once the board has approved it. it has been negotiated on the ground. has been discussed informally with the board. and there has been running courage and, very broad-based support from all corners of the board of the imf. financing is going what thedicated on international support will be to that country, whether on a or from others institutions, such as the world bank and other regional

institutions. for the moment, what we are forecasting is the financing envelope ranging from $14 billion to $18 billion. that includes room for of anythingpayment that is a legitimate area to any creditor. i think that answers your question. >> thank you very much. swinging back around -- right here. >> about a year ago, when we had -- the driving force is declining. what is your opinion on the ship? policy wise, what do you think emerging markets can do in order to regain their momentum and the resilience of their financial markets in a post-qe europe --

post-qe era? >> i would not call it a shift. it is still the case that the bulk of growth is generated by the emerging market. about the emerging markets lagging behind and having lost their momentum is a little bit overdone. they are still providing the bulk of growth. what is new is advanced economies have picked up. there is rebalancing happening at the moment. i would not call that a shift. i would call that rebalancing. clearly, sincet, the tapering talk in may, the emerging markets have been under some pressure. and we have observed volatility, which has had a significant effect on some of them, which has since been essentially various policy

measures that have taken place in those countries. otherange from one to the , depending on the fundamentals of those economies. if you look at what india has done in a monetary point of view , what indonesia has done in the whole scope available to policy authorities, clearly there has been good work done. this continues to need constant to avoid the consequences of volatility. but volatility is something we are going to have to live with. we have been massively protected over the last few years from volatility because of quantitative easing taking place in many corners, and launched by various central banks. normalizednd to be as the economy bounces back. >> thank you very much. yes, sir?

with the glasses, yes sir. who has got glasses? >> everyone. >> i am with african youth analysis. we recently have witnessed a , beingtion by nigeria africa's biggest economy. the indicators -- before that, everybody is the witness to what happened between different governments and the central bank. well, nigeria might not have energy to do with the fund right now. -- may not have anything to do with the fund right now.

the nigerian situation is only an isolated case in africa. we have whistleblowers coming .ut, you know >> do you have a question? >> exactly. the government tends to victimize whistleblowers. same government comes to the funds to put in proposals for grants. case, has the fund any play thed to superpower, with some conditionality's? >> it is a very important question that you raise. i can assure you that there are -- i wouldcountries not single out african countries, any country. but countries come for

negotiations for programs, for a monitoring program, with or without funding. we have that dialogue with the authorities about the evidenceity, the relating to contracts, two licenses, the ways in which business has been conducted. there have been instances under my watch where we have said, sorry, but unless and until we have documented information about the circumstances under which such contracts, such mining rights, were granted, unfortunately, we cannot work to gather. that it isssure you efficient. and i applaud any instances when authorities in africa or elsewhere actually have the courage to step up and to identify when they are shaky, if not shady circumstances, under

which those rights are granted. >> yes, sir. with the glasses. thank you. >> i am from italy. there seems to be a different the risks of contracted low inflation or ,eflation in the euro zone especially on the timing of the response. you just said there was unconventional measures about several exponents of the ecb. you also said these would not be imminent. whereas the other day, it was said, the sooner, the better. what is the message you are going to deliver to them later today when you meet them? obviously on the same page as my chief economist, right? the sooner, the better is good.

we have an ongoing dialogue with the european authorities. judgment respect the of the central bank. they have fingers on the pulse of the european economies. and we were very encouraged to boardt the latest meeting, and subsequent press conference, that they are visiting any tools to respond to the situation. to be aink it is going question of timing now. but we are encouraged. >> thank you. >> good morning, mrs. lagardere. -- lagarde. the question is about the imf.

happen after the increase of the quota to the imf? which would be scheduled for the restructuring of the governance issue? and the quota issue? this is about the restructuring of sovereign debt. it is said here, but it is a rumor, that the imf is supporting the possibility of leaving out the collective included the that sovereign debt contracts after the crisis of 2003. the probability of supporting some kind of default before helping the countries to stand up. could you please tell us about it? >> we do not comment on rumors. but i am not going to leave you with that. it is a bit short.

i think it is clear to everybody that the collective action clauses, as they are applied, proved to have deficiencies. we certainly realized that when we dealt with the greek sovereign debt restructuring. so what do we do? do we just sit and wait? or do we try to work in good cooperation with other members, and in consultation with others, to see how they can be improved? i think our duty is to do some consultation,ough enough iteration of how they can be improved, and then submit them to board review and see how we move forward. tasked to the board to actually explore that. i want to dismiss the idea that we will be heading in the direction of what some of you who have been around for a long

, theknow as the ndrm extremely structured and organized ways of dealing with restructuring. we are not heading in that direction. let us be clear about it. if you hear rumors, you can tell them that i told you very specifically that we were not heading in that direction at all. but are we working on the issue of the efficiency of how we can quickly deal with those matters? we have to. we have to. >> i think we are almost out of time. last question. think documents have already touched on that issue. i think i have outlined what my plan is. >> yes, sir? >> please allow me to ask my question in french. [speaking french]

>> i am from tunisia. how was yournow, meeting with the head of government, the prime minister, and where is it heading, based on the figures? is going to be doing a consensus. since iten a long time was going to be doing this. imf do you think of the trying to impose reforms in the country? >> i will respond in french and then i will summarize in english. [speaking french] first of all, the prime minister 's visit was a success, as i see it. as a new prime minister, he was able to explain to us his plans,

the reforms he intends to put in place by his government on behalf of the country. it is the reforms the prime minister intends to implement in tunisia. i was quite struck by his determination to implement reform, to move the country , to trapto modernize foreign investors, including in .ew areas i hope we will continue to work together. program, then imf we also completed the third review recently, and substantial progress has been made. able tohat will be continue to see progress, and this will continue to be a success story. figures, i think the opportunity to see the imf uses a lot of multimedia for

communication. it does not mean that we review our figures from day to day. there is a slight gap between the latest development in a given country, but this does not call into question the underlying worth of what we do. visit wasng the successful, and allowed him to describe exactly his program of for the country, for the population of tunisia. i was particularly struck i the focus on development, on attracting foreign direct investment in very strong growth

sectors, and in moving toward investment for growth in tunisia. hope that as the reviews of the program progress and as tunisia matures, it will be a success story. he called this country a [indiscernible] widget think is a great name. >> thanks again for coming today. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2014] >> at 6:00 eastern, we will bring you a live news conference with treasury secretary jack lew. the spring meetings of the imf, the g 20, the world bank under way in washington. he is expected to speak on the state of the global economy and the situation in ukraine. from then, reports world bank president on climate change and why he feels the world is not taking it seriously enough.

he is also in washington, d.c. this week for spring meetings of the financial leaders. >> my name is john donnelly. communications director to world bank president jim yong kim. this will be in on the record briefing. we will start with dr. kim's statement, and then we will take questions from you. thank you. >> good morning, everybody. can you hear? toould like to welcome you the 2014 spring meetings of the world bank group and the international monetary fund. we are very happy to have all of you here. we live in a time of great contrasts, when fewer than 100 people control as much of the world's wealth as the poorest 3.5 billion combined. a time when many developing countries have the strongest growth rates in the world, which each year helps millions of people lift themselves out of extreme poverty.

our economists estimate that roughly one billion people around the world live in extreme poverty in 2014. this is down from an estimated 1.2 billion people in 2010. this difficult to graft number surely,ng steadily and but reaching our goals of ending extreme poverty by 2030 and boosting shared prosperity will not be easy. developing countries will have to grow at a pace stronger than any time in the last 20 years. the vast roles of the poorest will have to decrease by 50 million people each year. think about that number. to reach our goal, a one million people each week will have to lift themselves out of poverty. that is each week for the next 16 years. we strongly believe this can happen. has been vital for reducing extreme poverty and

improving the lives of many poor people. but if this mass migration from poverty to prosperity is to gather strength, we need growth that is inclusive, creates jobs, and assists the poor directly. growth remains critically important, responsible for 3/4 of the reduction in poverty numbers today. when we look at the global economy today, growth in high income countries is accelerating, and in low income cultures as well, although less briskly than before. short-term risks have receded. increasingly, we focus on the medium term. the pace of reform could be slowing in this post crisis period. return to the structural reform agenda. even a small setback could leave millions of families in destitution rather than escaping poverty. today, we are releasing a report called prosperity for all, each makes the point that tackling poverty understands where the

greatest number of poor lip. we also must concentrate where hardship is most pervasive. any smaller countries have far higher shares of their people living below the extreme poverty line. than halftries, more the population is living in extreme poverty. reducing poverty in those places is as important as making progress in countries where the absolute number of poor people is much bigger. we also must ensure that economic growth in the years ahead is sustainable and takes us off the destructive path of climate change. climate change could reverse hard-won development gains and stop our in-poverty objectives completely. we will not and poverty unless we protect our planet. we intend to become a solutions bank. in this room, we announced our goal to end poverty by 2030 and boost shared prosperity.

we announced our world bank strategy for our twin goals. to implement this strategy, we needed to become fit for purpose and secure additional financing will stop starting in july, we will be working differently. we will have global communities of experts in all areas of development, whose work will put us on the path to become a true solutions bank. keeping awill be on strong presence in country offices. there is good news on finance as well. our annual capacity is expected to grow from 45 billion to 50 billion now to more than 70 billion a year, possible thanks to cost savings, financial strengths, and clients willing to pay more for our knowledge and services. we are now more and more fit for purpose.

we could end poverty in a generation. i am confident we will seize this opportunity and erase the stain of extreme property from our collective moral conscience once and for all. thank you very much. i would be happy to take your questions. >> please identify yourself and your outlet. >> i am from china business news. i have a question on china's urbanization studies. the most recent report, the joint report to the world bank and china -- what are some of the key findings we have since last year's annual meeting? i second question is, when we talk about urbanization, a lot of chinese people think there more urbanization. how can china do that without ?verheating a healthy market

>> this was requested by the premier before he can -- became premier. it follows on the study we did several years ago, china 2030. what we learn from this report is that when the chinese government takes seriously the process of writing a report, the outcome is usually one in which the findings in the report are taken very seriously. 2030, that at china was the first time a paper written jointly by the world bank and chinese development and research council assessed things like -- china will have to move its growth strategy away from exports and toward consumption and services. and competition will be important. what we see now is that the reform agenda continues.

-- we see tremendous resolve. we know that what everyone wrote, and whatever was in that document -- we knew the government would take it seriously. importantly, they have already begun to move. there are fundamental issues. the system where you can only receive services where you were born -- when people moved to the cities, they cannot receive services. but what the report shows is that if you reform that system and provide services in the cities, you can increase economic growth. in other words, a reform of something that people had been calling for for a while will actually improve growth. other things in the reports are things like land rights. and reforms clearly will help not only the process of german the station, but farmers. maythings in the report

have been thought of as revolutionary even four or five years ago. but what we know is that once the government takes these kinds of reports seriously and works with us that these are reforms that are very likely to happen. report --gs in the there are already tremendous innovations in china in the building of cleaner, more livable cities. i think that is the goal. one of the reasons premier li asked me directly to do the study is that there is a deep concern about pollution in the cities, for example. there are a lot of strategies in that paper that suggest how to build cities that will be much cleaner over time. on the one hand, i think we have, in that report, tackled many of the most important issues that china is facing. i think there is a clear path to reform. i think it is going to work. i think the chinese government will take it seriously.

helpink it will actually other countries with how to build cleaner cities in their particular context. >> ian kelly, "wall street journal." oronder if you can elaborate tell us how concerned are you about the potential for escalation of sanctions in the ukraine over russia? >> as you know, we are not a political organization, and we are forbidden to be directly involved in political matters. we have been working very closely with the ukraine. as talksd carefully are continuing. to role right now is maintain a strong relationship with both the ukraine and russia. in ukraine, we have put together

a $3.5 billion package, about 1.5 billion of which will be provided in direct budget support. we are working closely with the imf and are extremely encouraged by the negotiations and work the imf is doing on the ground. the $1.5spect that billion we will put directly in the budget as an important part of that will be linked to the imf financial stabilization package. a very early infusion of cash to stabilize the economy. afterwards, the rest of the $2 billion will be focused on infrastructure projects, will be focused on direct support, especially for the poorest -- health and social welfare type programs. we are right there, working with the ukraine, and hoping to help it down its path, and get past this crisis.

we are concerned about the impact of ukrainian crisis on gross. we have adjusted our growth for the year,2% about half of our previous estimation. we feel the russian economy could contract as much as 1.8% this year. his is a very serious issue for russia, a very serious issue for its growth prospects. all of therge parties to continue with negotiations and find peaceful means of moving forward. >> right here.

>> what should emerging markets like donna be doing, -- like ghana be doing? currency is down 18%. roth is likely to suffer as well. what should we be doing so that whatever happens in the u.s., the shock is minimized in countries like donna -- ghana? >> there is no single piece of advice i could give. if we step back and look at country's overall -- the announcement of a taper could happen in may. what percentage have currencies depreciated, and what percentage went up? of developing market currencies actually appreciated in that time. the impact was not the same across all the developing world. what we see is that countries

greater imbalances, greater weaknesses, for example countries with high current account balances, countries with high debt ratios that are not well managed, countries that had high levels of debt in external currencies -- these countries had the biggest problem with depreciation in currency. as to mostto ghana, of the world, is to get the fundamentals right. really think about debt management, current account balances, fiscal buffers. and next the's policies that are prudent and appropriate. policies that are prudent and appropriate, so that public spending is more effective. those are solid stories throughout the developing world. it seems that the market is picking on markets with these weaknesses in a very focused way.

the more countries focus on their weaknesses, the better off they will be. our hope is that the paper will be gradual. be thaton seems to to make this as gradual as possible. right now, inflow of capital makes up 4.6% of developing country budgets. 4.6% of gdp of developing countries. if there is a gradual taper, that could go to four percent of gdp by 2016. if that happens in a gradual fashion, which we hope it does, the growth in first world economies, the u.s. especially, but europe and japan as well, should offset the decrease in capital flow. overall, the story of developing growth is a positive story.

over the last six years, since the beginning of the crisis, still the growth numbers are better than anyone expected. developing country growth was what kept level growth up, especially in the most difficult years. optimism,rt of the cautious optimism, is the fact that now that the u.s. is growing, europe is growing, and japan is growing, the emerging market economies have gone through some turbulence, but they seem to be also on a very good path. for example, at the end of january, there was a little flip and a relative outflow of capital from the emerging markets. but that actually reversed and recovered by march. even though there are these little blips, we think the outlook for emerging market economies is still very good. the message is really, get back to fundamentals. tackle the basics. fundamentalsot the

-- if the fundamentals are in good shape -- the market will recognize that and punish ghana less. >> "london daily mail." there has been quite a debate of gdp which% should be devoted to foreign aid. at a time of great austerity and some of the advanced countries. is timeder whether it to abolish what was an artificial number, fixed upon the 1950's, and instead of focusing on the quantity of aid, to focus much more on the quality of aid, and whether we ought to remove that 0.7% target. >> thanks, alex. readers,y, for your that i think prime minister cameron and finance minister osborne's decision to continue

with the 0.7% commitment was extremely courageous and extremely welcome. we work very closely with dfid. dfid has continued to grow in both stature and reach. their support has been critical, both to us and to the countries that they impact directly. right now, all of foreign assistance, the entire package of official development assistance, is about $125 billion. needs are so much greater than that. africa alone has $100 billion a year in into structure needs. countries are talking about a $4.5 trillion infrastructure deficit over the next five years. just in the area of infrastructure, there is no way official development assistance can ever meet those needs. means every dollar of

development assistance is needed. and every dollar has to be used in a way that will bring in other players into the game. i think the big story for economic development in the years ahead is that we will never be able to accomplish goals like ending extreme poverty unless the public and private sector work must more -- much more closely together. if you look at those infrastructure needs, for countries, the briic we are working to make sure that every dollar of our lending is focused in some way of making are we are building foundation for private sector companies to get involved. i think we have a very interesting situation right now. there is a lot of money sitting on the sidelines, trillions of dollars yielding low returns. at the same time, there are multiple, we feel, very bankable projects in the developing world , that could yield much better

returns for this capital. the task is for us, as a public multilateral organization, to structure those deals so that not only does the infrastructure get built, but investors receive a return. that is really going to be the story of the future. the 0.7% is critical. if we can keep that up, that is really where we are going to have to really use that money, and build a foundation, so that the development of the future, which will be much more public-private, can really take off. please quote me on this. great register my own thanks not only to prime minister cameron and his government, but to the people of the united kingdom. i know there is a hot debate, but i want them to know that their generosity is having a huge, huge impact out in the d is very much fi

focused on this idea that the development of the future is going to have to be multifaceted. it is going to have to really think about how these dollars really get us too big, transformative outcomes we know are possible. >> in the far back, a woman. tv.overing for ap, kuwait with respect to the middle east, helps to the staggering economies there have been discussed? >> as we look across the middle east, we have to be mindful of noting and applauding the successes where they happen. of the national dialogue in yemen, i think we were very encouraged to see that happening in a country that is facing so many difficulties. i recently met with the prime minister of tunisia.

the passage of the constitution in tunisia, i think, is a source of great hope. as a result of the really impressive work that government has been doing, we have increased our lending to $1.2 billion a year. that is compared to a rate of about $300 million a year before the tunisian spring, and $600 million a year afterward. we are doubling our lending to tunisia. we continue to marvel at the generosity of the governments and the people of lebanon and jordan, continuing to accept refugees from syria despite enormous hardship. our strategy is focused on helping those governments especially. working in many, many of the countries in the middle east, but are especially focused on helping those governments that have shown a very strong commitment to reform stop when we are also -- to reform.

also focused on helping as much as possible the countries that have done so much to bear the burden of the crisis in syria. we continue to be very active. we are looking for solutions wherever we can. the development of the private sector and the creation of jobs is critical. a problem of faces having a very high percentage, over 50% of college graduates being unemployed. we need to figure out how to spur growth in the private sector so that jobs can be created. back, the person who has had his hand up the whole time. >> i am from egypt. my question is about the country. on the can you comment world bank programs in egypt now, in the transition and upcoming residential election? >> we have had a very extensive

project in egypt, focused on helping to provide basic services. there was a time when we had stopped our disbursements. what we have continued them. concern asth great the political situation unfolds. of our work isty focused on helping the poorest, on helping to provide basic services. we want to continue to do that. but we are following the political situation carefully. we hope it goes to a good resolution. perhaps even something closer to what tunisia has been able to do. since we are focused on basic services, we will continue as much as possible.

>> good morning. may i speak in spanish? in paraguay, the statistics from the government have reduce the pointsf poverty four over the last few years, and 10% in terms of extreme poverty. what would you recommend to the government, and what should the people do who have emerged from extreme poverty? bank continueorld to support paraguay specifically? >> it is a great question, and it is one that many countries in latin america face. for example, in larger countries like brazil and mexico, there has been great success through so-called conditional cash transfer programs. both in brazil and mexico.

iny have been very effective lifting, especially families, children, out of poverty. the next great question is how can those programs lead to these women and these families entering into the formal labor market? the big issue is job creation. is the same, i think, throughout latin america. we work very closely with paraguay. from making sure the quality of public spending is as high as it can be, and doing what needs to be done to create a business environment, where the private sector can grow and those jobs can be created. we got a world development report that pointed out that, in developing countries, over 90% of all jobs are created in the or. we have been especially focused -- private sector.

we have been especially focused andelping small medium-sized local enterprises grow and create jobs. that is an urgent issue all over the world, job creation. have success in reducing inequality and lifting people out of poverty, you have to really focus on making sure that they can have the good jobs everyone desires. four more just minutes to take one, possibly two more quick questions. in the far back? >> from "the guardian" in london. why is the bank increasing fees for its expert advice to countries, when those countries i assume can ill afford to pay? can you answer the criticism from the bretton woods project at the bank has >> so, we -- we have increased

fees for very specific group of countries. one of the things that has been part of our change process has been very important. without a capital increase, we have been able to increase our capacity to lend more than anytime in history. this past change in the financial -- and the financial it is the largest increase in history. we have done it without a capital increase. the way it was done is because of demand. china, indonesia, mexico have all asked for increase of the limit. we have a limit as to what one single country could ask for. we would increase the limit for the five countries. the increase in fees --ot