interesting to me. because they really are at a point of acceptance and they're trying to figure out how to bring their congregation along and most of the most successful people or faith leaders have done about a year or two journey with their congregation, having these conversations about who are we and what do we stand for and how do we be inclusive and diverse as a community. so, i found that really fascinating. the other thing i found in as fascinating a lot of the activists or people on the frontline who are living their every day lives aren't organized. so i think a lot of organizing happened in those smaller towns across the south which i think already could you see the light bulb go off for a lot of these community activists where they realized they weren't talking to each other and more power in

numbers. it was a fascinating trip. >> we talked about ireland earlier. let's go to the other side of the globe. do you have any statistics on the lbgt community and how they're treated or the views of the lbgt community in asia? >> well, i think one of the challenges that we have globally and i touched on this a little earlier was that our opponents in the state have taken their message, their anti-lbgt message and exsupportingport exporting it. not only that in a little less than ten countries you could be punished by death for being lbgt so there is a crisis abroad. i don't have the specifics but i could get those for you.

but i think overall what we want to be really mindful of is that we have a challenge that's global now. we started recognizing it at glad and we've been working on the global oh for years and we started to get really involved last year's round the olympics and making sure that the stories of russian lbgt people were being told while all the cameras were on sochi. and we have quite a few other projects on the horizon. but we can't keep up with all the advocates on the ground who are asking for your assistance to help them understand how to work with the media and build a relationship with the media and so it's a very active space right now with a lot of need. >> are you doing anything

specifically related to the olympics in brazil next year? >> we're always looking. i think that we're always analyzing where -- who needs our help and how we can help and when the national spotlight is on a country we'll always be there and active and talking about the issues that we're having globally for sure. >> do you believe transitioning should be included in a basic healthcare package? >> well, i think it's been proven it is should go that should be medically covered and i think there's documentation -- there is documentation on that. and it's -- when somebody is not matching up or aligning and it's causing stress, it's not good

for anybody. and i think that having that kind of coverage is critical. >> do you have any specific partnerships with companies here in the united states? are you doing a blanket presentation regarding the lbgt community? >> can you just clarify that? >> are you saying -- i'm not going to mention any names -- with a specific company here in the united states, are you working with them to try to -- in trying to get them to generate more acceptance with the lgbt employees that they have within the company or are you doing -- is your presentation a general one that will effect or touch most of the

companies here in the united states? >> you know, one thing that we found out when we did our accelerating acceptance harris poll is what we definitely need to pay attention to in the future more so than we have in the past are our allies and a lot of corporate america can be our allies. within their companies have a number of allies. so it's about engaging allies and bringing them along to support us and to help us along. i think that our -- glad as a whole is been accelerating acceptance for the lbgt community. whether it's in private framework or corporate we're always trying to do that. corporations understand. it's good for bottom line and talent and gaining new talent

and so it's in their best interests and they understand that now. so i think i find that they're very clued in to the lbgt community and how powerful acceptance can be. >> are there any specific policies that you would like to see corporate america adopt regarding the lbgt community. somebody mentioned healthcare. pensions, wages, i mean, there are a whole range of issues where corporate america could benefit their lbgt community. are there any policies you'd like to sea corporate america put in place to help the lgbt community here in the united states? >> yeah, i mean i think it's really important especially when

it comes to the transgender community to think about how healthcare and also important to think about what transitioning is and any services that they can help provide to make that easier to help them do it while they're still at work. andone thing we didn't touch on is policy beyond marriage equality. you can still get fired in 21 states for being lgbt. you could be evicted from your homes, and you can be denied services. we have a lot of work on the policy front. you cannot legislate acceptance. that is why we are so focused on accelerating acceptance. those policies alone, whether

they are at the federal or state level, the best policy and protection is acceptance, because that is when you have a consensus that you have a safer environment. whether it be a work environment or your housing environment or your community. >> is there anything you think congress should do to benefit the lgbt community, or would you rather focus on individual programs to help the lgbt community. you mentioned not having a vote on the issue, so do you think there is anything legislative that can be done on the federal level?

>> i was mentioning there are about 80 lgbt bills that are pending. there are another that are anti-trans. those are called bathroom bills. it is legislating what bathroom a person can or cannot go into. we have to progress as a community to allow our transgender brothers and sisters feel safe and accepted and not be put in situations where they are scared and unsafe. those bathroom bills are creating those environments. those are a big one we are having conversations about and trying to build awareness throughout. >> focusing on the legislative branch of government, let's say

the supreme court decides same-sex marriage has to be recognized. suppose the congress comes back and says we are going to possible to try to negate the decision. what happens now? >> if that happens we are going to help them. we have been fighting for this. a lot of people say this happened overnight. it didn't happen overnight. people have been fighting for decades. we will continue pushing forward. when you have a community that supports families, you have a better community. even if congress goes up against it, we will make sure we organize around that and make sure we stop it.

>> have you been talking to any of the presidential candidates regarding the lgbt community? >> i am glad we are apolitical so we are nonpartisan. no. the shortest answer yet. >> seeing there are no more questions, i would like to thank her for her excellent presentation. i would also like to thank crystal white for the assistance. i would like to thank the audience. with that the proceeding is closed. >> on the next "washington

journal," a debate of the gun laws after the recent church shooting and south carolina. colin goddard is a survivor of the virginia tech shooting an advocate for the organization every town for gun safety. also syndicated columnist ann coulter talks about her new book on immigration. we'll also take your calls and look for your comments on facebook and twitter beginning a live 7:00 a.m. eastern on c-span. like many of us, first families take vacation time. and, like presidents and first ladies, a good read can be the perfect companion. what better book than one that hears inside the personal life of every first lady. "first ladies: presidential historians on the lives of 45

iconic american women." a great summertime read, available from public affairs is a hardcover or an e-book, through your favorite bookstore or online bookseller. we covered a day long event last week, all of which you can see at c-span.org. we are going to show you sean donovan director of the office of management in's financial goals. -- on th country's financial goals. >> several fun facts about sean donovan. you are known or on the white house as sean don? his younger son is a bass player in a boy band around d.c. that has other prominent parents.

he has designed part of his house as a trained architect. his father, michael, just recently became a u.s. citizen after living here since the early 1960's. mr. donovan: 53 years and the u.s. >> amazing. i want to bring up a word you do not like all that much which is the word shutdown. mr. donovan: a nice way to start. >> harry reid talked within the last week about warning of the possibility of a shutdown. brewing behind all the other things is an impasse about spending for the next budget. i can summarize where it stands but i would be interested -- is this really heading in a direction where we could in the fall see a shutdown? mr. donovan: i'm not going to roll it out and here is why. we have this word in washington -- sequestration. it is a word that no other human being outside of washington has

heard of. to translated, it was basically the cuts to the budget that were supposed to be so terrible that they were going to bring everybody to the table to make a deal. and pain was going to be equally shared. defense, nondefense. it went into effect. it was terrible for our economy. lost 7650,000 jobs. and republicans and democrats fixed it through a murray rhine deal. what is happening this year is, and less congress acts, sequestration comes back on october 1. and that's really what the fight is about. >> the ticking time bomb out there. mr. donovan: exactly right. the president has been clear. one of the things we tried to do is be very clear about what our bright lines are so we create space for where there may be a deal. so the president said right when we put out our budget in early february he is not going to

accept it budget that locks in sequestration. everybody except if we do not get a deal in the midst of a heated presidential campaign, we are not going to get one next year. so he is not going to accept a budget. the translation of that is he would veto bills that were written at this sequestration level. and, at the same time, there are some who are saying, let's fix the defense budget and not what we call the nondefense budget. the nondefense budget as everything from the state department of homeland security and the veterans administration, but also, the feed corn of our economy -- education, infrastructure, basic research, all of those things would be hurt if we'd just fix the defense part of the budget. >> so the president is ok raising defense spending that wants to raise other kinds of spending. mr. donovan: he believes that

sequestration is bad for the defense of the home appeared he agrees with republicans that we ought to do something there. but he also agrees with increasing number of republicans that we ought to be doing something on the nondefense side. the last thing i would say that gets lost in these debates is we want to fully pay for what ever we do in discretionary spending with smarter long-term cuts to spending on what we call entitlements, mandatory spending, and on the tech side. -- the tax side. that is where fiscal problem is long-term. right now discretionary spending is at the lowest level it has been in decades as a share of our economy. that is not wear a fiscal challenges. the fiscal challenges on the longer-term entitlement programs, mandatory and on the tax side. what we want to do is what congress did a couple years ago. with the marine ryan deal -- the murray ryan deal. >> you say it is possible this

could lead to a government shutdown in the fall. do you see signs of -- murry and ryan are not in those positions. what the odds that that happens or we see something resembling a shutdown. mr. donovan: i think the odds are better than 50-50 we get a deal because we are hearing more and more democrats and republicans come out and say it is the right thing to do. john boehner said a few weeks ago he was open to a deal. hal rogers said the same thing. i think the problem is that we do not want is this governing by crisis we have seen to offer it from washington. we would like to get started right now. and we are working with democrats to stop the progress in the defense appropriations bill literally this week because we think that the key signal, we have to stop this charade we are proceeding on right now and get

to a real negotiating table. when i hope we do not do is leave it to the fall, to a crisis, whether it is a shutdown. it is not good for anyone. >> i want to get to the corporate tax reform and talk about the highway bill. maybe we can bring up the first question if you have your ipads handy. which ranks as your biggest concern when it comes to the federal budget? i don't know if we have the -- it'll pop up in a second. people are fast answerers. the complexity of the tax code. so, coming in. federal -- growth of federal debt. wow, people are only going for three. so, we had complexity of the tax code seems to be the winner. i don't know if you have some view on that yourself. mr. donovan: well, a couple

things that are interesting about this. it does show the substantial progress we have made on the federal debt. we have still got a ways to go but we are now our deficits are below 3% of gdp which is kind of the standard measure that most economists use. we are below the 40 year average on where we were after having tremendous challenges just a few years ago. the deficit has come down by 2/3. it is in choosing to see how few of you are focused on that piece. on the tax side the president agrees, and really both of those things, the corporate tax rate and the complexity of the system, i think there is broad bipartisan agreement. in fact, the president has been clear and we are working very well on the bipartisan basis to try this calendar year to see if we can get tax reform done. >> of what kind? mr. donovan: so, i think there is a chance for broad business tax reform that would include both domestic and international.

>> within the orbit of trying to get some highway -- mr. donovan: if you do this right, it is deficit neutral over the long run, but it would produce real savings in the first decade. we ought to use that savings toward something that i think all businesspeople would agree is a critical need in this country. we would increase infrastructure spending by 40% and get a six year we authorization of the highway trust fund. we have done a dozen different short-term extensions. look anybody who tries to plan you all try to plan in your business lives think about a governor trying to plan infrastructure investment with months at a time extensions of the highway trust fund. it is not a way to manage. >> how active are these discussions now? mr. donovan: i think the thing to watch for -- i think there

are good discussions happening particularly as the trade debate has been front and center, i think as we move to the next big issue, it is going to be around corporate tax reform where we can have bipartisan cooperation. if you look at what is going to happen with a highway trust fund, there is an extension until the end of july. the hope is that there can be negotiations of a person framework -- basic framework. then an extension of the highway trust fund through the end of the calendar year to give time to put together a comprehensive package on business tax reform. >> there are so many plots playing out at the same time. we have the trade fight, the fight over spending, sequestration, the highway funding bill will come up. then there'll be at the end of the fiscal year, a possible shutdown. even in that setting, you can contingent -- you can continue

to move forward on corporate tax overhaul? mr. donovan: sometimes bigger is easier not harder and washington. if you pull together the tax extenders that need to be extended, if there is a budget deal with business tax reform, sometimes it is easier to get all of that done together in one big deal. the hard thing, and this goes to the answers we saw, everybody agrees that we can bring the corporate rate down. that is part of the president's proposal. and that we can make the tax code simpler. the problem is that, you know, one of your making the tax code simpler is taking away somebody else's benefit in the tax code. and so, it is really when the rubber hits the road on what are the provisions that you are going to be eliminating to get too simple a vacation, that -- to simple vacation, that politics gets hard. i would say to all of you here

if you believe that this is something we ought to do as a country, we all have to stand up and willing -- and be willing to give up tax breaks that may benefit us in terms of the particular industry, a product for the the larger good, which is to get a similar tax code and the lower rate. that really is the goal. not easy. that is where the rubber is going to hit the road when we start talking about what specific loopholes we are going to close or what provisions we are going to get rid of that will pay for lowering the rate. >> you talk today and in the past about how the real concern is the longer-term deficit picture. our debt to gdp now is 74%. i think the norm before the recession was under 40%. the hope is to get it down to 70%. cbo came out with a report that said by 2040, it would be 100%. mr. donovan: that is if we do

nothing. and the president's budget would actually take steps that within the 10 year window would put us non a declining path. and bring it down further in the subsequent decades. a couple things we have to recognize. one is, even cbo's numbers are better than they were a few years ago. because health care costs are growing more slowly. if there is a single driver on the cost side that is more important than anything else in the deficit picture, it is health care costs. that is why all of the progress we made with the affordable care act, with health care costs that are growing at the slowest rate they have in 50 years have made its huge difference. one factoid on that. in the year 2020 we expect to spend $200 billion less on federal health care expenditures than we expected just a few years ago. and that's how dramatic a small

change can be in terms of those costs. then there is a lot we are experimenting with that could bring down the debt dramatically and thate outer years. and we have to recognize the population is aging. we have too few workers with the baby boom happening. that is why immigration reform is one of the most powerful things we can do. >> i was hoping that we might talk about the nation's cfo. in the meantime, i would like to bring up we had one other audience response question. if that could come up. it will overlap a tiny bit thematically. if you could change one thing and washington's fiscal management it would be -- and we will have to see what it

would be. let's see if we have the time ticking down here. divise bipartisan budget process. cut the federal deficit. reduce overall tax rate. guess that -- yeah. strong desire for that. mr. donovan: looks like tax reform is important to the audience. good. let's get a deal done this year. that would be great. >> again, the federal deficit came in a distant fourth on that one. that is interesting. so, i don't know whether you were draw a direct correlation between the way that you have to try to deal with feuding interest within the rather large federal government -- mr. donovan: i thought you were talking about my children at home. >> we can get to that, too. to craft a budget.

i do not think many of the people in the room are dealing with the equivalent of a debt ceiling or the end of the fiscal year and sequestration, but i'm interested in what advice you might be able to impart from your own experience on working with these kinds of conflicting interests to try to make it all from together. mr. donovan: so, i think one of the most challenging things i see as, not only my experience in the public sector but i worked in the private sector before. i worked for mike bloomberg in new york city as a house commissioner there as well, which is an interesting and joint public-private experience. in private sector spirits before that. i think what is often a challenge i see -- and it is true here but it is true in the private sector as well is that it is easier -- it is not easy

in budget math, but it is easier to show what the financial bottom line is. what are we spending? it is often much harder to have a clear picture of what we are buying. if my job is to try to get more bang for the buck, we are pretty good at measuring the buck. we are bad in government, but in lots of places -- of measuring the bang. what value are you getting for the money you are spending. one of the things i tried to do throughout my career in the public sector -- i am a numbers guy -- is to figure out how we measure performance in a way to can link to the financial picture. that was a challenge in the private sector to look at productivity, to think about your workers. what is a quality product? if that is hard in the private sector, it is challenging in the public sector, because i often do not think we know what

success looks likes in the public sector. being very clear, creating measures around that and linking the defendant -- linking them to financial performance is not alone going to solve the political challenges we have but let's face it, we have a fiscal deficit. but we also have a trust deficit. if we can show better what it is that we are actually producing the value we are producing whether we are accomplishing the mission of what government is out to do, i think we could win over a lot of people in the country then get past some of the partisanship. >> if you could highlight one area with a metric, what would that be? mr. donovan: look, i will take an example that i would i worked very closely on at hud when the president came into office veterans were 50% more likely to live on our streets, to be homeless than the average american. there is broad political consensus that we should not

have folks with served our nation in the military sleeping on our streets, right? broad agreement. the problem was we did not have a clear set of solutions about that. and so i worked with a range of folks across the federal government, we put something together, it was like a hud stat process where every month i would meet with the most senior management and we would look place by place at where we were driving down the numbers of veterans that are on the streets, getting them housed. in four years we have reduced veteran homelessness by 1/3. and street homeless is by 43%. in four years. that is real progress. and what is happening is actually congress is on a bipartisan basis putting more money into veteran homelessness. i think there are other examples like that where if you can be

very clear over what is successful -- measure it relentlessly -- and show progress, you can build some sense of bipartisanship. >> did you want to jump in? if there are folks -- i have more questions. i do not know if there are -- >> let me ask you in line with what neaal was pursuing. it is interesting to hear you talk about creating the metrics by which you can measure success, the bangs. how do you rally a very dispersed, large organization like omb which is a representative which is trying to consolidate the thinking of the budgets of a nation, of a national government or hud? how do you rally all of the diverse thoughts about how the money should be sent around a

budget in one direction? understandably, congress is making a lot of the decisions and you have to go back and say there is not money for that. they refine their ideas. but still, you are in the business of doing something along the lines of what cfo's are doing, which is trying to create consensus within an organization that has compelling, legitimate claims, diverse claim on the money. how do you do it? mr. donovan: look, first, i think there is no substitute for actually creating a process where people have their say. but i also think, and this goes back to the point i was making earlier my general experience has been that if somebody understands the reason why you're making decisions if you're actually saying to them we are not going to put more money into that program, and here's the reason why.

it is not producing results in the same way that this is. hear them out. let them be part of that process in deciding, but what i found is if you do have a clear way of saying, here is why i am making this decision and here is the evidence, that it is going to be a lot easier to create consensus. and for people, even if they're not happy about it, to walk away from the table understanding why the decision is made it feeling like they can do something about it. i can take my program and try to make it better or try to improve it in ways that maybe next year i will have a better shot. and, you know, the problem in washington is often that has got to fight against the retail nature of politics, focusing just on their district rather than the larger picture often. but i think the president has really try to bring that sense of we are going to focus on

what works. we are going to drive money towards what works. and be able to show clearly that that is how we are making decisions. and whtat i have found is it is not going to create perfect consensus, but it will make it a lot easier to get buy in from a diverse set of folks. you have got to say no a lot in the omb job. i am sure you all do as well. having that an ability to point to something and say, here is what i am basing my decision-making on that is objective makes a big difference. >> so a lot of this was result in the pastore has been resolved politically. does this suggest that omb is adding to the machinery of analysis that you can get a range of programs presented to you and detail, work groups on each of those, the way that some

of the cfo's might. >> that is exactly our role. we are the analytic and a structure within the federal government. we have the b for budget and we have the m for management. we created a performance stat infrastructure for all the agencies and government. we have priority goals that each agency is required to set that we are tracking, and we are linking that to budget information to be able to get, as i said before, both of bang and the buck. >> as government programs expand, does the omb have the capacity to deal with the ev er-growing demands for that kind of analysis that might have otherwise in the past been handled through a political -- ? >> it is fair to say we can only focus on a share of those decisions.

so part of what we are trying to do is create a similar culture within agencies, right to have, to build the analytic capacity within agencies, to have performance management be an important part of what agencies themselves are doing. so that it is both doing it ourselves, but not just, you know -- this is purely adversarial where we are seen as, you know the judge and jury. we're going to be less successful. if we can build a culture or performance management inside agencies, and i think we have a better chance of actually building, you know, not trying to do it just ourselves by building it across the federal government. >> questions in the audience? plesase. >> so, one of our critical responsibilities is to make sure that you know, our resources are spent appropriately, that there is no fraud, that we have good controls.

not to put you on the spot. i know you are new, but who should we look to in the government to do that for us for the taxpayers? when you look at medicare -- billions of dollars of fraud. they have posted this stuff publicly. people are saying we are going after some of the most egregious fraud. why wasn't that cleaned up before? i saw something recently that half of all disability claims for government employees are overpaid. you look at the irs courtesy hangups when there is half a million hours allocated year for union lobbying activity. i think a lot of us are saying who represents us, the taxpayer? who is making sure there is not fraud, making sure there is good value as we are negotiating with the people who work there? i know it is a tough question, but -- >> then i would say, to some extent, everyone needs to be responsible for that, and there needs to be accountability for it.

and we do have a system of inspectors general and other agencies like the general accounting office which try to create accountability around the. and they are constantly auditing, going in and looking at where are their problems within government, both on it agency basis and across?? and we do a lot of work with those organizations to make sure that finding the individual problems around those things are connected to a broader picture of is there a systematic or a structural problem here we need to take on? and i do think part of the problem, to be frank, is that, you know you are not going to hear stories about where we are making progress, that we tend to have a culture in the media that focuses on where there are egregious problems. very rarely what you'll see is well, is this more than an

anecdote? what is happening? are those examples increasing, decreasing? i think one of the things -- i have been at omb a year, but it is something at hud we worked on extensively -- our improper payments rate has gone down substantially across the six years of this administration. so we do measure, we look at what of the program's most vulnerable to fraud. we measure very consistently what are the improper payments that go out and one of the things that we are doing to try to stop that. and we have seen significant progress in many of those areas. one of the problems is, and this is the frustration often of the way the budget process can work in d.c., you mentioned the irs. 40% of taxpayers are having their questions answered timely when they call in because

budgets have been cut so dramatically for the irs. and the, the irs commissioner has been very clear that he's been doing what he can to improve that service, but there is only so much he can do without the resources. and it is getting to the point where we have had to cut back auditing in the irs and we can show that there is tens of billions of dollars that we are unable to collect. so we are shooting ourselves in the foot on the fiscal basis if we are not investing in the things that allow us to measure fraud, to go after folks that are cheating, and ultimately, if we do not have a tax system we can rely on in terms of enforcement, that is a serious problem for the country going forward. one of the biggest things we are concerned about in the budget fight is the resources that allow us to go after fruaud. >> other questions? i can ask a quick one.

we have not really brought up the debt ceiling, debt limit issue. i think you would know better that it has pushed out into november territory. >> because the deficit has continued to come down we expected to go a little bit longer. a hard thing to predict exactly. mr. donovan: we will hit it at some point. might even be early next year. do you foresee that as being a real impediment, to fight yet again, to get congress to approve a raising of that feeling? >> look, if there is a most basic task that congress has it is to protect the full faith and credit of the u.s. government. and i do not have to tell all of you that a default on our debt would be catastrophic for the country. and so, the president has been very clear.

this is not something to be negotiated with, taken as a hostage. i think we have heard encouraging words from the leadership on both sides of the aisle, republican and democrat that we should not play politics with the debt limit. so, all i would say, it would be deeply irresponsible for this to be the very first congress in our history to let us go over the cliff, to push us over that cliff, and we are certainly not going to be negotiating over the debt limit. this is something congress needs to do without any conditions. >> wow. sean donovan, neal king, thank you very much. >> on the security breach at the office of personnel management, affecting the records of millions of federal employees

and others who work for companies with government contracts, the opm director will testify about spending for information technology that could prevent reaches from happening again. that is live this morning at 10:30 a.m. eastern on c-span 3. in the afternoon at 2:00, a senate subcommittee hearing on proposed epa regulations for carbon emissions. that is also on c-span 3. like many of us, first families take vacation time. and like presidents and first ladies, a good read can be the perfect companion for your summer journey. what better book thanone -- one that p eers inside the personal life of every first lady. " first ladies: presidential historians on the lives of 45 women."

inspiring stories on fascinating women who survived the white house. a great summertime read. available from public affairs as a hardcover or e-books are your favorite bookstore or online bookseller. >> the head of the financial security of us a group, greg medcraft, spoke at the national press club about efforts to prevent another financial crisis. the international organization of securities commissions is made up crime merrily those who regulate the securities industry. >> let's make sure your cell phones are turned off and any other vibrating or noisemaking devices. good morning and welcome to the national press club. i'm hosting this morning's newsmakers news conference

featuring greg medcraft. he has been at the forefront of global initiatives to head off another financial crisis like the one that devastated markets and economies not so long ago. millions of people were thrust into unemployment. the economic recovery, such as it is, has been a long time coming. since the meltdown, national and international regulators have focused a great deal of attention and effort to change the way financial institutions are regulated in an effort to guarantee to the greatest extent possible global financial security and stability. thus was born the notion of the systemically important financial institutions. they face greater regulatory oversight but their failures will not take other institutions

down with them. the chairman has been going public with his view that regulators may have gone too far and underestimated the effectiveness of regulatory tools that already exist particularly in the capital markets. he also believes that regulation should not stifle risk taking because it supports job creation. today he will describe what they do and the role in building capital markets that are underpinned by investors. capital markets that support capital growth. he will comment on where the rate has been since the crisis and he will comment on where the debate might head and what iosco will do. a few procedural notes, once the chairman has completed his

remarks, we will open the floor to questions. priority will be given to credentialed media and national press club members. when you're called on to pose a question, please identify yourself by name and by organization. the floor is yours. greg medcraft: thank you very much, david, and good morning, everyone. i'd like to thank the national press club for the opportunity to actually talk about some very important issues that are currently on the international regulatory agenda. as david said today, i'm here in my capacity as the chairman of the board of the international organization of securities commissions, or iosco. today i would like to touch on three key topics. one, is to briefly describe what iosco does and our role in what

i believe is so important for the future, which is how we build globally integrated capital markets. having a vision in 40 or 50 years, having a vision for free flow of capital around the world, equity capital markets and health management, and having those markets at the end of the day, to achieve that means having trust among regulators and investors in markets. most importantly, i think we've got to remember that it is the role that capital markets do and will continue to play more importantly in the future in underpinning funding economic growth and therefore jobs. i think it is a very important theme of my speech today financing growth and jobs around

the world. secondly, i'm just going to comment from a markets and financial services regulator perspective on where the international regulatory debate has been since the crisis, and third, i'm going to comment on where the debate might head, and what iosco thinks is required in particular in the asset management sector. i should say at the outset that i will limit my comments to the international regulatory agenda and experience. it's obviously not appropriate for me to talk about issues at a national level here in the united states. these are matters for your own regulators and policymakers. so let me turn to iosco and who we are and what we do. iosco brings together financial

services and market regulators from over 120 jurisdictions around the world. we actually account together for over 90% of the value of global capital markets. equity capital markets, funds management, and derivative markets. a very significant part of financing the world economy. our members include regulators from the largest and developed jurisdictions to front your -- frontier jurisdictions with tiny capital markets. our fundamental objective, if you think about what we do as financial service and market regulators, our fundamental objective is to allow the markets to do their job. in the way we do that, their job is to actually find the real economy and therefore economic

growth, and therefore creating jobs. that is what we are about. and we do it by making sure that investors basically have trust and confidence in the markets and that the markets are seen to be fair and efficient and transparent, and that any systemic risk that may be posed are mitigated, not eliminated, but mitigated. so basically, as i said, if markets cannot grow effectively, it may provide a key to underpinning economic growth wealth, and jobs. and basically we work together globally in a number of ways all of which have cooperation and collaboration at their core. that is what we do. i actually want to focus on seven key activities of how we work around the world together

to give you a much better feel for what we do. firstly, and most importantly, we develop guidelines for our members to use in deciding how they regulate. if you think about the ultimate mission of having global integrated markets, and having common global approach to how your approach regulation is really important. we look at whether it's in the area of human guidance in terms -- in terms of repertory supervision or enforcement, our two most critical tools as what we do is market regulators. to give you an example, since the crisis, we've developed guidance among other things on regulating credit rating agencies. the iosco code of conduct is embedded in many legislatures around the world. on hedge funds, securitization

asset management, in particular, in his country, on the money market fund guidance. most importantly, recently in financial benchmarks. last week what we get along his lines is we actually published guidance on what credible deterrence framework looks like. basically guiding countries who are looking at how they can gain confidence that we all can rely on in terms of the whole enforcement solution. that's what we do. the second thing is not just giving guidance on conduct supervision and on enforcement to help countries around the world have taken this to approach. we cooperate on enforcement and how in fact market regulators ensure that we can actually -- are able to enforce across borders around the world. so our multilateral memorandum

of understanding between our members on enforcement investigation forms the absolute core of how market regulators enforce across borders around the world. through their cooperation, we are able to go through jurisdictions and get information we need. you may be aware that most of the changes -- exchanges around the world will not allow foreign jurisdiction located companies to list unless they are a member. there is that ability to cross borders. we have 105 members who are signed up and they use it to prosecute cross-border market abuse, which in turn provides confidence to investors investing across borders. the third thing we do is supervising the conduct of those we regulate. we actually use principles of

civilized record operation which we developed in 2010. if you think about regulation and how we can build confidence, these three elements are important. one is giving guidance in terms of regulatory standards. the second one is actually how you can incorporate supervision, and the third is enforcement. it's pretty simple, those are the three key things that build trust and confidence between regulators. the fourth key thing that we do is actually what we do for tomorrow's engines of growth. which is the 80 countries in the emerging markets group. we look to help them build regulatory capacity. and we do that across a number of different initiatives, so we have education and training programs. we are in the process of launching an online training program for regulators around the world and emerging-market. were also conducting in-house courses for regulators.

importantly, we actually have an online knowledge database. we are regulators in -- where regulators in emerging markets can ask regulators in other parts of world on basic issues and developing policies in the country. it's all about providing resources to actually give them the information to fill the gap, to help them develop their markets. we also undertake assessment program. we have just done one in the case of pakistan where we assessed them against international standards and identify the gaps. so that investors coming into the country can have an idea of actually how their country fits with international standards. again, that is building regulatory capacity. also it's actually building trust and confidence in that country as an investment jurisdiction area most importantly, another initiative we decided last week's developing regional hubs on a pilot basis around the world in different regions of the world.

that will define us as a global standard setter. and we will be based all over the world. some very excited about our regulatory capacity. the fifth area where we provide support, and basically when you think about it, is people. nothing is far more compelling than the opportunity for building trust and confidence around the world and in having the ability to encourage and support common activity among them. to that end, we have actually launched an international comment register which allows regulators from all over the world to identify opportunities. the reason this initiative -- many countries have bilateral initiatives which others were not aware of. so frankly, it's about

connecting the dots. that is how you actually build global cooperation, global integrated markets. the sixth area we focus on is getting our members -- helping our members understand emerging markets. if you want to be a good regulator, you need to be watching what is coming ahead of you in the future. that has been a major thrust of mine over the last few years where we have been focusing on digital disruption, cyber resilience, what is happening with corporate governance. it's actually informing our members so they can be better at what they're doing and not actually resisting development but helping business harvest the opportunities that come from innovation, while mitigating the risks.

the seventh area we focus on is collaborating with industry. the markets regulator, you have to be collaborating closely with industry. also with other international forums like the financial stability board where we represent the interest of our where i and others represent the interest of the members. those are the key aspects of what we do. you think about all seven of those contribute to building that global mission towards integrated capital markets. i will say that i believe that these activities are what help us emerge as a key global reference point for financial services and markets regulation. that is the way we want to be seen. it is the way we are seeing and we strengthen that perception in the future. today the opportunity to highlight to you what we do in that mission. as i said, here we are. we have grown with the

importance in the market we regulate, and these markets, i believe, capital markets will continue to play an increasing role in financing the world economy. i see that for three reasons. first of all it is a significant increase in the global retirement savings pool as a result of both democratic change -- demographic change structural changes that are occurring in developing countries as they develop time at systems. that means movement of savings to the fund management system. the second key aspects of wide markets will continue to grow stronger as the impact of post crisis regulation in the banking sector. high levels of liquidity. what is happening? you end up with more and more being funded.

the third key aspect to i have believe market based financing will continue to grow his digital disruption. peer-to-peer lending crowdfunding, the challenge is how you find is market-based financing. i believe in the longer-term activities will help build global capital markets, most importantly, i have fought passionately about, build a free flow of capital around the world . markets at have the trust and confidence of those who participate in them. market regulators have that mutual trust and can rely on one another. markets were investors come issuers can access those markets

freely wherever they are whether they be investors or issuers. will there may be new or in london or jakarta. and most importantly, markets that fund the real economy and economic growth and jobs. let's talk about my second topic come of the post process form agenda. i'd like to make two comments which i believe are important in terms of the context of where i think we should be heading. the first is about the type of issues we have had to address since the crisis. and the second is about how we have gone about addressing those issues. many of the issues we had to address since the crisis were

cross sectoral in nature, our work at iosco is securitization is a good example of that. securitization is seen in many countries around the world as an them important technology to facilitating the real economy. the other issue that we have focused on his money market funds. in addition, many of the issues have been new. the regulation of otc derivatives has been greenfields territory. at the national level, financial services and markets regulators have to work with central bankers and banking supervisors more intensely than ever before.

and i would hope is equal parts in -- partners. i think also the power of this those process we talked about before, is the increasing importance of markets a regulators is strongly coming into focus. it has been a challenging time for all of us. and i think a very fruitful one. we have come a long way. as i said, my second comment is about how we have addressed those issues. let me focus on the reform agenda for what has been called shadow banking. the key aspect of the reform agenda. what i or we would now prefer to call sustainable market based

financing. i have an issue with the bedeviling of the name shadow banking, frankly, i'm not sure it was the right name. i think now that fsb has taken on the name of sustainable market financing. the first is the fact that the agenda has for some time been driven necessarily by financial stability and the systemic risk considerations. as david said earlier, there were dark times back then. there hasn't been a focus on the role market-based financing can play in funding a real economy. i think that is where we are today. we need to focus on -- not on what happened then, but how we can take that market based financing technology and use it to help now, moving more into growth agenda.

and again, i think what is important, we need to think about how we would -- the international regulatory come community i believe, may have been too willing to draw conclusions about the nature and risk posed by market-based financing to financial stability. again, giving a traumatic experience in 2007 and 2008, that is not surprising. but there is a concern that the international regulatory community may have gone too far in seeing problems and as underestimated the effectiveness of existing tools to regulate market-based financing. it's a very important message that i want to deliver today. the third is about thinking that

has gone into policy prescriptions and tools since the crisis to address those risks. these tools have tended to be based on those used by prudential supervisors, not market regulators. while they work for the banking sector, they weren't necessarily work for market-based financing. at osco we have grown concerned about these other developments. they don't fit with the way we look at the world and our responsibilities as markets at financial services regulators. the markets that we regulate our builds on the idea of risk taking, risk taking. people gain money, they lose money. that's markets. that risk-taking is the essence

of the capitalist system. it is the essence of wealth creation and jobs. we say regulation in markets about ensuring that they accurately and fairly priced those risks and market participants act with integrity. if you think about it, at the end of the day, we all should be lined with participants because if you don't have the trust and confidence of investors and issuers, you don't have markets. very simple. trust and confidence in markets of investors and issuers is essential. so, that's what we are about. making sure that trust and confidence is there. regulation should be careful not to stifle risk-taking. that is what markets are about.

and making a prohibitively expensive. and the tools that we develop and use should be tailored to the risks we thank warrant regulation and supervision. in the market space them again in the market space it is not about regulation, it is about conduct supervision and enforcement. that's how you regulate markets. it's not about how you regulate banks. i would like to outline how i think these concerns should be taken into account in charting a path forward in international work. particularly in relation to asset markets. you will be aware there has been underway for some three years work on the designation of

non-bank non-insurer systemically important financially institutions. this work has extended to the asset management space. the fsb is now embarking on further work to understand the risk posed by the sector. i want to touch on two issues, which iso is flagging and will continue to flag through discussions with the fsb. these two issues are one judgments about the asset management sector and the need to act or not, and secondly, actionable solutions that we need or may not need in this sector.

let me touch the first item. judgments, the first issue is about being careful of jumping to conclusions about the nature and the extent of risks in this space and the need to act. if you think about is regulators to focus on enforcement. before we take something to court we have to make sure we have enough evidence to make a case. here we need to make sure that we have faith -- evidence-based decision-making. we should only progress thinking about solutions once we are satisfied there is strong evidence of a problem. pretty logical. i want to make three points on this. the first also is about the quality of evidence. this should not be theoretical

and drawn from academic papers based on what might have happened in the distant past. it should be based on what we are currently seeing and what we might think happens in the real markets which we regulate. that is our real experience, because that is what we do. that is what we do every day of the week as regulators. the second is making sure that the evidence is collected jointly and collaboratively across all sectors, but most importantly and i know from my days of 30 years in investment banking, it is an industry. having critical data access. it is important to work in partnership with industry he for you draw conclusions that has a proper evidence-based.

the evidence is not just simply data. it is about how fund managers big fund managers are but about industry practice that they take in addressing risks, about the effectiveness of conduct supervision and enforcement in that's why you cannot in what we do do things without industry. because at the end of the day they don't want to blow themselves up either. they want to run their businesses for the long-term. really important, that collaboration. and the third is about how we go about deciding when a problem or risk is so important that it needs to be acted upon. this has been very clear about the objectives and the balance that we want between -- and i think this is important -- the balance we want between financial stability and security and economic growth and job outcomes.

again, i am not convinced that there is evidence that asset managers put financial stability at risk simply because they are large. as yet, we do not have concrete evidence that this has been or might be the case. in this respect, i find the industries recent commentary compelling. if you think about it, during the depths of the financial crisis net outflows from funds were small and certainly not on a scale to impacted broader market. another aspect of this current study is the fund management. the focus is restricted to mutual fund. excludes sovereign wealth fund excludes pension funds. look at the echo system. that is important.

getting back to mutual funds basically, the reason what the crisis it reflects the nature of mutual funds and their definition, they are investors who are generally in it for the long-haul. they generally take short-term fluctuations in their stride. they don't necessarily rush to --. in rare instances where they might, the industry have tools in place to manage the flow. there is scope i believe to explore the extent to which some activities of asset managers might pose broader market risks. i am encouraged by the fact that the financial stability board has now embarked on work to better understand these risks.

i see this is a very good outcome of their work. my second issue i mentioned before was about actionable solutions once we decide whether this work to do. i am firmly of the view that we should not look to find new and possibly inappropriate solutions before we understand we are already using. what refine it -- refinements we may need to the existing tools we have. let's not re-create the wheel. in the asset management space market regulators and asset managers themselves already have toolkits at their disposal. toolkits on conduct supervision and enforcement, which i believe have been effective in managing disruptions over decades in markets. in jurisdictions around the world. these include rules on eligible

assets, on liquidity threshold on restrictions on leverage, on stress testing. on knowing your investor requirements and most importantly, redemption restriction tools fees, side pockets and suspensions. i have seen them working in my market and on -- and in other markets. as the regulator including funds management around the world, we describe these tools into previous reviews and have provided guidance on when and how they might be used. we have presented these tools, i did this a few months ago to a financial stability board to ask plane to them, that's all we do. here is how we work.

this is about education. we are very happy to educate. in 2012, we published the principles on suspension of redemptions in collection investment schemes, providing guidance on when and how the managers of schemes should suspend redemptions. a report there, set out to market regulators around the world, the alternative measures which could be used to deal with illiquidity based on real experience around the world. not just theoretical possibilities in member jurisdictions. real-world regulation for real world possibilities. in 2013, we also publish the principles of look witty risk management. a grass -- addressing that issue, managing liquidity on the day to day basis. based on real experience. we published the recommendations

listed earlier on the use of these tools for money market funds in 2012. if we decide there is an issue then surely the work we have already done in terms of suspension or liquidity management should be the starting point for any future work. we should not use tools developed for banking and insurance as our starting point. this is markets. we understand markets. this is what we are looking at. these tools were developed for terms who have different risk -- risk profiles. it is like creating a square peg for a round hole. it has to be appropriate for use. we are dealing with something that is so dynamic and important

as the funds management. as i said before, in terms of facilitating the funding of the real economy. let's be careful how we tamper with this. at our meeting in london, last week the board also discussed how we should be progressing our work in this asset management space. let me outline to you our decisions last week. we decided three things. the first is that a full review of asset management activities and products should be the immediate focus of the work. in identifying potential systemic risk and vulnerability is in the asset management space. the second is that this review should take presidents -- precedents on methodologies for the designation of systemically important management priorities

are let's sort out if this is a problem. third was once this review is completed, the work on designation should be reassessed. our thinking was this review should focus on four areas. the first is about ensuring we have the data to monitor and understand the risks in what is clearly a dynamic space. that is about collecting more and better data than we currently have. that then, will inform a better decision making about risk management. to that end, the sec has recently published a proposal -- a rulemaking proposal on looking at better data from the asset management sector. europe has done similar things. if you think about it, what we really need is to have ultimately some sort of standard template where regulators around

the world can share data about this sector. it is logical in a modern world. in particularly in a word if we want to have globally integrated capital markets is having basically an ability to share information on a consistent fashion. we know that tool is there, it is a matter of harnessing them. so the second is about liquidity management the mismatches. and those that are currently being dealt with at the moment. liquidity management is at the heart of asset management. talk to any asset manager, as set looking -- are essential. we need to become the ball with liquidity risk and how they are being managed. that is something we will be focusing on. thinking about tailored to particular types of funds

stress tests that might be appropriate. appropriate to the fund. not to a bank. the other thing we are looking at the moment, because this is what we do come is state capital markets. we look at bond markets. we have a study looking at the risk and the structural issues in bond markets around the world. that is what we do. and the third area we want to look at is leverage which we will do come and the fourth is about developing a better understanding of the risks posed by the investment mandates in times of stress. it is a logical thing for a regulator of funds management to think about. wherever we land after this work and whatever guidance we develop, will need to be sure we don't unduly stifle risk-taking. it has to be measured.

the -- it is a core of markets that we regular, it is a characteristic of markets that they take risks, which ultimately deliver wealth, economic growth and jobs. in conclusion, i want to flag the importance of being careful and of being cautious in driving the regulatory work on market-based financing and in particular in the asset management space. what we need to do is ensure that our work is not just about ensuring the stability of the financial system but recognizing the role markets have to play in funding economic growth and creating jobs and facilitating that role. this same time ensuring that recognizing that markets are all about taking risk and they have

to be regulated in a very different way to banks. we need to make sure before we act in these areas. we need to ensure that we take -- we recognize that the tools we currently have as market regulators, conduct supervision and enforcement are a great starting point and should be the basis of any further regulation in this area. at the end of the day, if you think about starting -- we recognize fundamentally, the markets to do their job, to fund the economy you have to have investor trust and confidence. everything we do and conduct supervision and enforcement is directed at that. that is -- why markets exist and why we want to make sure they can do their job. try to make sure that trust exists around the world so

markets can do it in a single country it can do it integrated throughout the world. thank you, everybody and thank you again for the opportunity to do addresses group. >> thank you. a very interesting discussion. it looks like we will get a lot of questions out here. this is the q&a part of the program. please identify yourself and the organization you represent. if we could wait for the wireless microphone. >> i'm with reuters. there's a team that supposed to go up with rules for asset managers in november, i believe. what do they think about what you are saying now. and have you coordinated your

message with them? >> iasco is an independent body on behalf of the world's regulators and we are -- we participate in the financial stability board. we coordinate with them. and i spoke to mark following morning when we made our decision. i believe he is supportive and understand the reasons for why we have taken our decision. that is where we stand. >> you think that package is the going to come out in november? >> i think what is important is we have a meeting in new york tomorrow on the standing committee of the risk fsb. we will discuss our position. let's face it, and the end of

the day, we are the regulator standard for the funds management around the world. it is not the financial stability board. i think that is clear. >> this gentleman in the center. >> i'm with politico. a thing like just a few months ago fsb and iasco were doubling down on asset managers. can you walk us through how you got from that to basically reversing course on the whole plan? >> from my view on these things, and i've been involved with this for a while and my background was in asset management, is that i think it has been a journey. this is what i was saying before, that the journey should be to establish the problem, establish the facts, and then decide a solution. we seem to be developing a solution before we developed the problem.

i think that is why we have ended up where we have. i think the fsb, it is a second consultation where we have is selected the instance. him assertive iasco from now on. we believe what we regulate, which is the market, will simply play a more important role in the world economy. >> you said governor carney was supportive. >> he understood where we were coming from, what we were saying.

we have a voice. we would like to have a stronger voice. we represent a small voice on the board. we still represent a vocal voice . >> two questions. you said identifying monitoring emerging risks has been a priority. what do you see? >> clearly we think about the risk probably four megatrends. the first is structural change

around the world and moving into the markets. that is going to keep going. it is going to keep going. the second megatrend is digital. particularly digital disruption in markets. we see that across the chain. what we need to do is -- the reason digital disruptions happen is because generally there seems to be value between the consumer and the originator. i always say, let's look to see what we can do in harvesting the opportunity and mitigating risk and what i also say is, look

at the end the day, the outcome we want is the same. we want to make sure that investors have confidence and the process to get that confidence in the algorithms or whatever it is. it is just into thinking and you have to think about how you enable those startups to actually talk to you. the issue is the financial system is not yet that adaptive to the digital world and one of the things we have done, for example, in my country is set up an innovation hub with advisory committee and thinking helps and staff. facilitating that innovation is important. another aspect is cyber resilience. that goes hand-in-hand with what is happening with digital.

and there i have been concerned about making sure -- and i think you call it cyber resilience because you cannot be completely protected. the u.s. national security standard and its framework, i believe, is a fabulous methodology. we are looking at what we can do across the various primary market, secondary markets, funds management, derivatives, what we can do in terms of guiding and setting various parts of the system for risk management approaches. that's important, how we can share information. i think it's not surprising that probably the cyber attack is probably the next black swan. i think that is the second thing. the third area for us is always

innovation driven complexity whether it be in markets or technology itself. we are doing a lot of work on that at the moment. innovative bankers and product manufacturers are looking at that. the other one in markets is the high-frequency trading dark pools. the fundamental thing of markets is to fund the real economy. it is actually not to facilitate gambling or trading that can actually affect confidence in the market. there we just got to be careful with balance to say dark liquidity is outside the main markets, for example. i guess the fourth key for us is getting that balance between allowing the free market to do

its job and balancing that with investor trust and confidence. but if you think about it, the two should be in line. if you don't have trust in markets, you don't have free trade facilitated across the system. the other one that is a big issue that is emerging in terms of trust and confidence is confidence in culture. i think we will hear more about this. what frightens me is when we peel the onion and what we see underneath in banks is quite frightening. i think it is quite frightening for banks and i do believe they have taken on the issue of the need to change the culture. i'm very passionate about it, because i don't think that we were headed post crisis which is creating armies of people and red tape is the solution.

frankly, it is doing right by your customer and getting that culture back of banking 40 years ago, getting back to just doing the right thing is probably what we have to think more about. unfortunately though, i think it is a carrot and stick approach. the carrot is where we see issues of culture in our company with surveillance, being proactive with the top management and the boards and saying "we've got a problem," i think that is important. but equally, i think, is the stick. it is important, unfortunately because we know human nature is often driven by three things. people who have just -- what happens if you get caught?

the second is culture. we need to make sure that management is responsible for individual accountability, probably more important than for fines, because at the end of the day, corporations are simply people and if we're going to get culture right into the future and have trust and confidence in the financial system and in banking, the way to win that back is to make sure the right checks and balances are there. this is the area where i think we will hear more about. it is what we are seeing around the world in foreign exchange and benchmarks. >> we have hit the fifth anniversary of dodd frank. how well have the global

regulators -- you remember how difficult it was to have the different regulators on board. how good a job has it been with the global conversion? >> i think it is incredible. look at the otc derivatives. suddenly, you have countries working together. i had breakfast this morning with tim masard. it is incredible how regulators around the world cooperating. we might argue about which team view is prevailing, but look at the financial stability board. we want to be more inclusive at fsb so we don't get the wrong

outcome. globalization is a fact of life. that is the other trend i did not mention before. the markets are globalized. frankly, we are globalized. we are in markets. therefore it is essential we work more and more globally, and a do believe it is working well. some things work well another things are still in training. i believe the issue of derivatives -- and if you look at the history of crises throughout history, one thing we know is that normally it is fine to recognize that markets have changed and become more global. quite often, you end up with a

crisis. history doesn't repeat itself, but it rhymes very well. we are just going through another lesson of history. and we will learn again. we are shaped by change. >> dan easy with thompson information services. --dan macy with thompson information services. given the global nature of what you're doing, does that apply to the asset history? >> i think it is a great initiative of the financial stability board. that ability to track through is very important. i cannot comment on asset management at the stage, but i

do believe it's a great initiative and i welcome it. dave: dave michaels with bloomberg news. you mentioned during the crisis that output with me to a funds were not significant, but you also talked about liquidity risks moving forward. could you elaborate a little more on what specific kinds of funds you see as posing a liquidity risk? and you mentioned bond markets in that part of your talk. could you elaborate a little bit more on what your concern is about bond market? greg: a lot of this work we are doing is reassure the financial stability board and markets and -- that the tools we have our

are appropriate. and if there is a need to change, to identify it. as i said, we will be looking at the activities and funds and how they do with liquidity mismatches and adjust. i cannot predict the outcome but what is appropriate is dependent upon the structure of the fund and the redemption capabilities, for example, stressing it to see how it acts in a liquidity stress. and then just making sure that people are confident the system works, or would work in a stress scenario. and then communicating that stress scenario to everybody here it is under a stress scenario, this is how it would work. equally in the secondary bond market, we've all heard about structural issues in the bond market. we are doing a survey across the world of bond markets. my background is in fixed income

markets. i must say in this area, it's quite interesting. generally, we know there is a lot of talk about market-making . generally the issue of market-making is that when you need liquidity, it's not there. what i was in markets, i never necessarily relied on market makers to be there when i needed it. you have to think about other options. on the one hand, you've got people saying, yes, the world has changed. if you think about it, you have a mass of liquidity on the books. what we want is sustainable markets. sustainable bond markets whatever markets we have, we want them to be sustainable.

and i never thought that what we had pre-crisis was particularly sustainable because it was liquidity driven out of the bank. you have people saying, we've got to do something and i don't think that is the solution. we've got others saying, if something really goes wrong, then the central bank can provide liquidity. i think fundamentally, what you've got to do is about, you know, i think the industry needs to think about what real investors really need to build real liquidity into on markets. and what they often need is, you know, they want to buy bonds in the index in which they are managed. issuing bonds that are actually in the index. it's a bit like equity markets. we all know that when you get into the index mother liquidity goes up because you are buying in the volume. that is 101. the regular issue is, they actually thrive on building

liquidity with their investor base. they issue the change. they make sure the documentation is simple. another issue is making sure you got it good derivative market. you may want to keep the liquidity position, but tell off -- sell off the risk. making sure you've got a good derivatives market is an example. a recent situation with pimco, they wound back their positions in a matter of days. it was a pretty good test of liquidity in the market. before we start rushing off drawing conclusions, let's understand the problem. let's talk to the experts, talk to the industry, and make sure we understand how it works. that is the we do.

>> that wraps up this session today. chairman metcalf will be available for questions afterwards for a few minutes? but we have come up on the end of our hour. i appreciate everyone showing up today. i hope you gained a lot of insight from the chairman's comments. greg: thank you very much and i very much appreciate you all coming. [applause] [captions copyright national cable satellite corp. 2015] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org] >> a look at the debate over gun laws after the recent church shootings at a church in south carolina. joining us is colin goddard. also and coulter talks about her new book on immigration. we will take your calls and

look for your comments on facebook and twitter. >> c-span gives you the best access to congress, live coverage to the u.s. house bringing you events that shape public policy. every morning, "washington journal is live. -- "washington journal" is live. it is brought to you as a public service by your local cable or satellite provider. >> senator chris murphy delivered remarks at the woodrow wilson center and washed the city -- in washington, d.c. he says he would like to refocus his debate on a comprehensive foreign-policy strategy instead of the traditional dichotomy of i slowly say shows him --

instead of isolationism. >> good afternoon everyone. we are bringing your greetings on behalf of jane harman. the wilson center, as you know is both a trusted platform and space for non-partisan dialogue on global issues and deals with regional issues, issues of technology and environment and women's leadership and other areas. we are very excited to have

senator murphy with us today. in the past couple of weeks alone we have had the pleasure of hosting some of his colleagues from hill. this is a rather unusual number of senators from both parties, including john cornyn and senator bob corker, chairman ed royce, and congressman henry cuellar. let me introduce the two speakers. i will introduce the senator second. aaron david miller is our moderator today. he will ask a few questions as well. he is the vice president of initiatives here at the wilson enter and a distinguished scholar. he served previously in the state department as an advisor to republican and democratic officers of state. he has received the departments meritorious honor awards and is the author of many books. i forgot to bring my copy of this, but i like to show it, it's a fabulous book and i recommend you go out and get it, "the end of greatness, why america can't have and doesn't want another great president," a

book that he published just this fall, actually a few months ago. senator chris murphy, our main speaker today, is a junior united states senator elected in 2012. murphy serves on several committees, including appropriations, health education, labor pensions and the committee on foreign relations. prior to his election to the u.s. senate, murphy served connecticut's fifth congressional district for three terms in the u.s. house of representatives and also served in local politics in connecticut as well. it gives me great honor to welcome to the podium senator murphy. thank you. [applause] senator murphy: well, thank you very much, andrew, for that kind introduction. thank you to the wilson center for hosting me here today. i'm really looking forward to a conversation with aaron david miller in absentia. let me thank my great friend jane harmon for all the fantastic work she's doing here. in connecticut, we are very

proud about our largely unpublicized connection to the history and legacy of president wilson. very few people know this, but he actually started his academic career teaching at wesleyan university and many credit his positive experience with his teaching job there as an inspiration to keep him in the profession. he spent, as did his first wife many of their summers in old lime, connection. -- connecticut. she was part of the old artists colony and he made most of his decisions sitting at florence griswold's kitchen table in old lime. so we love the connections that we have to the wilson legacy and to this center and it's really wonderful for me to be with you here today.

i remember this particular day that i'm going to talk about like it was yesterday. it was the spring of 2011. i was in a small, small village called parmacon in harat province, afghanistan. it was my third and really my most memorable trip to afghanistan. president obama's afghanistan surge was under way. and icef command had sent us to this tiny little village to see general petraeus' counterinsurgency strategy in action. we went out to parmacan where we met with 100 army commandos which was led by a young man from a town of goshen, connecticut. they were wildly impressive. there was no doubt that they had brought a modicum of piece and stability to a parcel of harat province that had been under the

thumb of the taliban just months ago. after a briefing in their ramshackle headquarters, they led us on a heavily guarded walk through the town, along with a collection of village elders. it was a stunningly beautiful walk. rocky, dirt roads surrounded by acres and acres of the most beautiful flowers that i had ever seen. irrigation canals maintained with u.s. dollars protected by our newly arriving soldiers. a half dozen workers were busy harvesting whatever crop these flowers provided a canopy for. i finally asked one of our hosts, one of our elders what that crop was. poppy, of course, he said plainly. what do you do with it once you harvest it? he said we sell it. we sell it to the taliban, who comes and buys it for a pretty good price. that's what he said within ear shot of u.s. soldiers who no doubt knew all about this arrangement. an arrangement for which they were sent to provide cover and

protection. now, i can't say that i was stunned because by this time i had heard it all during my trips to afghanistan and iraq, but this was as clear cut an indictment of our presence in those theaters as you could imagine. 100 troops in far western afghanistan. they were buying us temporary space, and we could credibly claim that we had purged the taliban from control of that town. but the taliban were lying in wait. they still surrounded the village. worse, they were marching into town to collect the revenue that would fuel their return once we left. we were achieving our military objective, no doubt. but we had done nothing meaningful to change the underlying long-term susceptibility of parmacan to extremist influence and control. they still had no way to feed their families other than producing poppy, which was being sold to the very guys that we were sent there to eliminate. local governance was either irrelevant, corrupt or nonexistent. all signs pointed to the

disturbing but to me increasingly unsurprising reality that our military success was practically meaningless there if we didn't have a viable strategy to change the economic and political reality on the ground for these people. now, in iraq, this contradiction played out with even more devastating results in the aftermath of the late bush administration surge. waves of u.s. troops and even bigger waves of u.s. cash provided a security blanket over parts of iraq, while political and economic progress went in the opposite direction. the u.s. handed out bags of cash to sunni tribal leaders, a short-sighted, impractical strategy for the long term while prime minister al maliki waged a war against the sunnis, to the point that when our troops left, they were happy to align themselves with anyone who was willing to fight the central government in baghdad. now, today i'm confident that

the vast majority of our high level military planners and diplomats fully understand this failing of our u.s. military intervention over the past decade. plus just last week army chief of staff, a battle hardened veteran of iraq said this when he was asked about calls to deploy troops back to the middle east to fight isis. he said, quote, my worry is could i put 150,000 soldiers on the ground and defeat isis? yes. but then what? it would go right back to where we are. a year later it would be right back to where we are today. before we even consider anything like that, we need to solve the political problem. and of course secretary bob gates remarked upon leaving the defense department that any future president that contemplated sending combat troops back to the middle east should have their head examined. and yet there are these creeping signs that we're on the verge in many ways of repeating the very mistakes that we should have learned. the architects of the iraq war are back, unapologetic and in

charge of republican candidates' foreign policy. the intraparty fight between john mccain and the interventionalists and rand paul and the isolationists is over with a convincing neoconservative victory. republican senators right now are calling for thousands of american troops to march back into iraq and maybe into syria too. and recently, these senators are making an interesting claim, one that we wouldn't have thought possible a year or so ago. they're saying that the american public is on their side. interestingly, they have a few polls to back them up. there is numbers on both sides but a few recent surveys suggest that americans are scared to death by isis and they want washington to do something about it, something dramatic something that answers the ferocity of isis with the kind of powerful shock and awe response that only america can muster. so mccain and graham are right that some polls are showing that americans support putting combat troops into the fight against isis. these polls also have something else in common.

they ask respondents a battery of questions about how concerned they are about isis and how they feel about how president obama is handling the problem. but then when it comes to possible responses, they ask only one question. do you support combat troops or not? there is no other option, there is no other alternative. send troops or effectively do nothing. given how scared people are of the real perceived threat that isis poses, they choose to do the only something that they're presented with. but polling and simple organic voter touch and feel tells us that america is still very weary about war. witness the unexpectedly ferocious backlash against the president's plan to bomb syria in 2013. and no matter what the neoconservatives and republican presidential candidates say, the lessons of places like parmacan and mosul haven't gone away. that's why i believe now more than ever that americans want an

alternative vision for how america can protect itself from threats like al qaeda and isis and the taliban that are something more than simple military intervention. americans will responsible to a new forward-looking, progressive strategy that meets these new threats with new tools, rather than simply relying on interventions that were designed for a time when armies marched against each other and grand peace treaties ended conflicts. and to be political for just a moment in a place that i know is not supposed to be political this is a moment for progressive democrats to seize the opportunity to lead. i'd argue the congressional democrats, especially over the last few years, have been absent from a serious interesting debate over the future course of american foreign policy. yet we weigh in on the weighty issues that demand our temporal attention, but it's only president obama and the republicans that are attempting to offer a broad vision for the rules of how we engage in a world full of very new, very scary threats. now maybe our vision silence has been understandable since we've frankly been able to lean on a president who we broadly agree with.