banks. it is a very big market presence even as measured by those even let alone but i think it really is. so it is a clear issue for the industry and i think it is also a major one for the regulators and 40 occ. for the regulatory perspective, i think that we need to think about our current approach which is bible college regulation by a charter. if you are a bank that cam talked about it gets thrown at you and the systemic at the bank holding companies with $150 billion in assets even though i think that it's silly. they are close to cam's model and the globally systemic banks. conversely, if you are in non- banked even if you are directly engaging and financial services that are regulated capitalize on the subject to liquidity and resolution requirements at a bank, you have none of those requirements. that has been true for a long time in bits and pieces of finance but the banking industry got something in return for all of its rules. it got monopoly charters because of the rapid increase

certainly can to do a bank or a community bank. so the competition is nice and the like there's been a problem with credit availability. i like the fact they're getting more credit out there at lower cost but how much of that is because they felt -- just break your arbitrage. they don't have the same rate as ththe restrictions but as much s i'm happy for borrowers who have a good expense with those platforms, we know they will disappear and the downturn. once investors are seeing losses they're not going to put money to make loans in the. hopeful you'll have a robust banking sector, particularly the community banking sector which does more in the small business space. will still be there. so i do think not just systemic stability but also regulatory arbitrage has to very much be in the focus of regulators when they see these new types of mechanisms outside the traditional banking sector develop. this is one area where the consumer bureau i think, ability better disclosures could be helpful. we want to make sure that the shadow sect

in the bank. to repay the loan is chosen by the board or she could be paid back in one month you can pay back in six months whatever she decides or two years is flexible but the can not conventionally we didn't most of the borrowers like the end will cycle within a one year in a week to the stallman you pay back your loan and then you borrow another one and continue to do that. but what happens at least no question of getting into debt burden but what happens if you cannot pay the housing there's no question of it's up to her if she said i cannot pay back we didn't fifty two weeks of the one year and i need a few weeks more rescheduling as long as she wants to pay we have no problem we are not here to punish or for the time period we are here to help her so that she can use the money and earn enough money because these are all income generating loan in other words you invest in something which will generate income and you play back the bank in the still you have some money left for you out of your

banks. they have made the system safer. we can take pride i think as a nation for having confronted the new financial realities and learn from the past and made changes. make changes. a wonderful thing about america you can -- there are these wonderful regulatory institutions we can front our problems and we deal with them and make changes and move on. but as we implement the new rules we are in danger of letting it's going in the terms of losing balance to the detriment of the financial system and the broad economy. in some ways this is the hardest period so we have made the changes into the implementation is already less newsworthy but for those of us that have toyota in this sort of intricacy that seems to me that's the most important part or very important part. now a great part of the risk lies in the shadow banking system it seems to me. $9.2 trillion sector that grows every day. the shadow big in the system doesn't seem like a big thing if you read about the bang in the front page of

he left the bank, as president of the bank, in 1920.he did a lot of traveling and speaking, but he really never spoke much again about the federal reserve. he went to europe right after world war ii when they were still having the paris peace conference. he was extremely affected. as benjamin strong said, he got very enthusiastic about the terrible destruction in europe and how he would see farm areas where products were going, produce was being grown. but he would see other areas where there was nothing left, no buildings. he said they would be driving along and see streams of refugees going in the other direction, and he knew they were going back to their homes and there was nothing there. there were no railroads. there was no infrastructure to get food from where was grown to people starving. he felt the banking system needed to help. he felt there needed to be some central help, so he became much more involved in what we could do in this country to help finance what was needed over there. he did not seem to pay much more attention t

certainly compared to a bank or a community bank. so the competition is nice and i like to know there's been a public credit availability and i like the fact they're getting more credit out there at lower cost but how much of that is because they've developed just regular arbitrage. they don't have restrictions as much as i'm happy for borrowers that had good experience with those platforms, we know in the downturn they will disappear. once investors start seeing them, they're not going to go to the platform. and hopefully you will have a robust banking sector, particularly community banking sector, which does more in the small business space, will still be there. so i do think not just systemic stability but also regulatory arbitrage has to pretty much be in the focus of regulators when they see these new types of mechanisms outside of the banking sector develop, and i think this is one area with the consumer of your i think, ability to repay stands and others, better disclosures could be helpful. but we want to make sure that the s

to the bank. that's 100% risk retention. >> that's, i think, a different issue. mr. carr, do you have a different -- >> risk retention is a different thing. that's how it got worked on appropriately. >> i think you were out of the room when i -- >> and i didn't hear you. >> that's why i will use my last half minute to ask you a question, and that is since the republican report says we have a huge problem, the too big to fail institutions might be bailed out. since your report indicates there are only two legislative proposals to deal with that problem, mr. kapawano's bill and mine, is there a chance instead of just talking about how bad some prior bill is that we would actually consider the only two legislative proposals identified in your report and mark them up? >> perhaps the gentleman missed the chair's opening comments when he said he would mark up too big to fail before this congress is over. the time of the gentleman has expired. the chair now recognizes the gentleman from oklahoma, mr. luc

the bank's ms.eeds contributed to shattered lives around the country and around the world. >> reporter: it comes from tense negotiations between the government and the bank an and it's investigation of toxic mortgage securities. >> they sold defective loans including federally insured financial institutions. made false statements to investors, marketing materials and even in documents filed with the securities and exchange commission. the investigators and the public were led to believe that these financial products were in compliance with the law, which is often not the case. >> reporter: $4 billion in fines goes to the justice department. $2.5billion will fund consumer aid programs including principle reductions and other relief options for homeowners and communities, and $500,000 goes to five states and the federal don't corporatio insurance corporation. but it does not protect the bank or employees from further criminal charges. in a statement: >> back in november there was a settlement with jp

banks? >> i think that the bank has a lot of stakeholders, and it seems clear that governance may not be working at the corporations. governance is a problem. it's a particularly severe problem in the biggest of banks, who get to play with a lot of people's money, who have no voice in governance, and, in the end, consumers and everyone is involved in this in one way or another. so i think there is something broken in this system in the fact we see wrong doings, this coming from the financial industry, and not just in the form. financial crisis, but going on, probably all the time. >> we heard that talk about governance, what does that mean. >> it raises a point, we have seen the repeated behaviour. it's easy to paint a broadbrush, but the reality is how many times do be bail out citibank. every decade or so we bail out them. most do well. ones don't. you aren't seeing the changes. with b&p, the request was that 30-some executives would leave the bank. it was agreed to. we are not seeing any

>> the new development bank, as they call it, it's pretty much a parallel to the world bank. but we also have four regional development banks and the china development bank far has given. in this area there are lots of banks, and it's nice to have one more. it's not dramatic. while there arrangement is not really a competitor. it's supposed to be $1 billion. you don't know how they can be available. you don't know how it can be activated. and the u.s. on its own put up hundred billion dollars in credit swaps to western countries, not for the bricks countries. you can't say that this is comparatively small by that comparison, it's nothing what the imf does in its programs. >> let's bring you in on the conversation, what do you see as the major motivation for these countries striking out on their own and forming a world bank, a lending agency, and also an imf, sort of a protective rainy day fund? >> i think there are at least two first run related to the fact that they're ending now the first cycle of brick summit that was started in 2009. and it was a pressure to deliver somet

major banks are no longer banking banks like mr. wilson's bank and he then doesn't have access to upstream services to provide to its customers. a simple example electronic benefit cards for welfare payments are very effective and safe and secure in providing benefits get under the know your customer rule as it's being interpreted banks are responsible to do all of the due diligence on the holders of their card which is obviously a possibility and banks are exiting that business. we have retailers exiting the courtesy check cashing business because of fears about anti-money laundering. check cashing in a grocery store or pharmacy. these are some consequences, not necessarily that they have been regulated or illegal that they are falling into a gray area because of some of just the vocabulary in the rules that continues to be written. >> thank you. other outcomes you mentioned were deposits were being discouraged because of higher fees and lower interest and there was a restriction of credit all but the most well-documented borrowers

bank such as the world bank or the enter american development a bank is a developmental bank what would it be like it would be essentially be their alternative where it's like the europeans when they talked about the european monetary fund we control the levers of power we control we the brics we control all of the political operational machinery of this particular organization and as a result of that you know we get to decide how things get implemented so when bad things happen then put it to you that gets provided is politically in our heads rather than in the hands of the united states and its allies now many of the brics nations have been in the news lately russia and the west have experienced a lot of tension over ukraine china has been flexing its muscle muscle in asia but each country has very different political traditions and economy so really quickly how do you think these countries differences affect their ability to find common ground they very much do and so i think that will fall in this particular summit that we're not going to necessarily get to any concrete conclusions

process to be required to split up large banks rather than to sell them to another large bank in a bank resolution and that is how we got the too big to fail banks and dodd-frank didn't do that. so they would have to modify the fdic act so that do not have to do that so the whole notion handles this well under the existing rule and that's how we got the big banks. but if you fix that, many of the regional banks, they don't really pose a risk. but if they fail and they go through this, they're just going to sell them to another bank and pretty soon you have a 100 billion-dollar bank. and so the resolution process built up a too big to fail industria and that's what they should have asked. they should've addressed that flaw. it's all about bankruptcy proceeding and everything else they never recognize a resolution process that was in place in the regular practice is broken when it comes to this and it doesn't have to be. >> there is this 50 billion-dollar arbitrary number. it doesn't come from anywhere and there's no science that came up with this. but the problem with having this and tur

bank funding model. banks are supposed to be liquid. they're liquid by design and borrow short and lend and trade long but if you look at a lot of the regulatory proposals, liquidity coverage ratio which racer more liquid, shorter duration assets, net funding stable ratio whose status is unclear but governor tarullo makes noises of getting u.s. banks to issue longer-term debt. seems like are regulators suggesting that the borrow short, helped long model is no longer tenable or banks can't really do that anymore or in the same way? >> well i think -- >> that's what they're doing, they're in for a surprise. >> yeah. i think the issue is, non-deposit funding and your debt financing and whether that is short or long term. yeah, there was way too much reliance on repo and commercial paper market. that was increasing portion of the liability structures in these larger institutions which is quite unstable. so i think in terms of the non-deposit component of the funding base, forcing them to issue more long-term debt is good. that will, that wi

citizen, bank on s.f. makes it easy for you to have an account. >> many people do not have a bank account because they might be in the check system, which means they had an account in the past but had problems managing it and it was closed. that gives them no option but to go to a cash -- check catcher for up to seven years. you want to give these people second chance. >> to find account best for you, follow these three easy steps. first, find a participating bank or credit union. call 211 or call one of our partner banks or credit unions and ask about the bank on s.f. account. both -- most bridges will have a sign in their window. second, ask about opening an account through bank on s.f.. a financial partner will guide you through this process and connect you with the account that is best for you. third, bring some form of identification. the california id, for an id, or your passport is fine. >> now you have open your account. simple? that is exactly why it was designed. you can access your account onlin

are no longer banking banks like mr. wilson's bank and he, then, doesn't have access to upstream services to provide to his customers. banks, a simple electronic benefit card for welfare payments, are very efficient and effective and safe and secure way of providing benefits. yet, under the know your customer rule as it's being interpreted, banks are responsible to do all of the due diligence on the molders of their card which is obviously an impossibility and banks are exiting that business. we have retailers exiting the courtesy check cash business because of big fears about anti-money laundering. check cashing in a grocery store or pharmacy. these are some consequences, not necessarily that they've been regulated and are illegal, but they are falling into a grey area because of some of the -- just the vocabulary in the rules that continue to be written. >> thank you. other outcomes that you've mentioned were that the deposits were being discouraged because of higher fees and lower interest and this was a restriction o

government bank's rule of the term and we said this is a bank owned by poor women we have our own rules our old law allows that so this distinction about the age limit doesn't apply to getting bank board is very clear but in any case. i was asked to resign so i resigned and came out of it but that doesn't mean the whole grameen bank subtly became a foreigner to me this is part of my life it's part of me he's part of my family so i feel i belong to the greenbank family were there and i'm in a position of decision making or executive position or i'm not but this is my baby and i work together of people who work there is a part of my team but we always work together since is the very day it was born when he was a little infant we not cheerlead in helping to grow any grown nationwide than our grammy no idea has a spread all over the world still grew around do that in that position has not changed that relationship or structure so you're somewhat of a senior consultant to the bank now without really having real power in meddling in its affairs right. well i will not sit this word sounds very

a tax imposed on bank notes issued outside of national banks drove the state banks to use checking accounts. by 1890 checking accounts became so popular that the comptroller of the currency estimated that only 10% of the nation's money supply was in currency. major problems with the system persisted. the currency, the new system did not allow for a necessary flux to meet demand. the national banks could only issue bank notes based on the market value of treasuries securities they had on deposit with the comptroller of the currency. this meant that if the securities' value went down they would have to recall currency. and how did they recall currency? they either stopped issuing new loans or recalled loans. this would of course then make depositors nervous and depositters would start pulling out their money again and as doubts grew withdrawals grew which would inevitably continue the tide of bank failure. silver was seen as a solution to the problem by the silver rights or free silver democrat as they were called. bank notes are cashed as we call it these days could not be trusted as it was

banks, the european banks as a whole. ubs should be a symbol of light.f the areas of barclays should be focusing on. move away from areas that are high risk and require lots of capital on an ongoing basis. that is what mr. jenkins should be focusing on. >> thanks for chatting with us. 7:21 in london. still to come, the bluebird sores. twitter's share price rises by more than one third in after-hours trading. we are going to look at why after the break. >> welcome back. i am mark barton. sales of twitter more than doubling last quarter. growth at the microblogging site a better than expected in the three months through june. rose nearly 25%. investors loving the news. this is the stats i love. because of world cup, specific products twitter created, there views on andion off twitter during the world cup match between brazil and germany . thrashed.en they were the result in germany game when germany thrashed result. the world came alight during that game. >> is almost as many people as there are in the world. >> did you tweet during the game? >> i didn't.

just like gold and then you have the bank barclays used to be the banking side the institutional banking side was run by at the new tank as he was brought over to head up both sides after this crisis but so again you mentioned that you know they would end one fraud once we were looking at one fraud that was started another this dark pool is four years old well it's four years old so now that this is come to the people's attention tony's gang of larcenous to bombs are going to come out and there's some new scam. but here's another key point stacey is that we have this global ponzi scheme that requires more cash flow to keep the ponzi going that's why the banks are almost encouraged they're being pushed into fraud i mean i mean you can say all you want tony jenkins but to keep berkeley's from declaring insolvency because barclays is an insolvent institution they have the there's no equity there it's kept a lot of float as a zombie bank you have to go back to mark carney and the zero percent interest rates that's why jenkins is forced to commit these acts because his bank is insolvent just

matter to the bank? >> of course. it will take them off one percentage point. holding back on the dividend, of course. what does it do to the reputation? you do not want that kind of thing when you are trading on your reputation. >> talk to us about the to or de fraud.- tour how hard is it to win new business? does it impact the bottom line? are we being myopic? >> it is the same situation we saw with credit suisse. they had so long to deal with it. we have been talking to all of our major clients and explaining the situation. they would have been doing the exact same thing. people will be sagging, -- people will be saying, is there an issue of us dealing with these guys at the moment? >> i am looking at some of the responses from the finance minister saying the manner in which the u.s. has treated should serve that should set a much broader tone. a strangeite statement. when a bank has been levied with breaching sanctions. --they have been convinced they were doing the trade out of geneva in most cases.

bank assets up 25%. the banks are getting bigger. eliminate bank bailouts. taxpayer bailouts is one of the objectives. i point to the balance sheet of the federal reserve bank which has grown from $1 trillion to $4.3 trillion since the enactment of dodd/frank. this is a huge concentration of risk which, by the way, is invested in longer term assets, unlike what led the rest of the advice of the bill includes. and is funded by overnight bank reserves. what we have here is the next taxpayer bailout in the making. finally, dodd/frank wants to eliminate a piece of practices. we're eliminating a lot of practices. in terms of mortgages. inconsistencies are causing banks to close accounts of diplomats because of anti-money laundering concerns. they are no longer dealing -- big banks are no longer dealing with community banks because of know your customer concerns. we would recommend to remedy this situation, a, we eliminate fsoc, a regulator composed of regulators. it's a huge redundancy and double jeopardy in the system. eliminate ambiguities in the terminology an

i got t ought to sell my bank at out of banking. and there was a mentality that the banks that survived this crisis are tough and resilient and nimble. they are forward edge and those that are questioning i think most of the banks in the community banking space today will hang and. of course hof course both of cos where does make sense but the greatest impediment are the regulation that those regulations when he took them to scale the regulations to size the risk and complexity of the institution. that's what we need in the country for the community banks to fluoridatio flourish and then have a vibrant forward thinking system. but i would've told him to hang in there because five years from now the landscape is going to be very conducive to the community banks at any given local area. >> i think the challenge is to be able to examine the different levels. that is a challenge for a lot of people in this room that i know it can be done and we have seen it done before. throughout your career as an analyst you have given lots of advice.

of the of the banking revolution somebody. in a barclays branch and i think we should have won the cars are important interview this man because he is a patriot well the billionaire class the top point zero one percent are very worried about the pitchforks nick hanauer who is an early investor in amazon and a billionaire he says the pitchforks are coming for us plutocrats and he starts off i see pitchforks which i reckon is that i see dead people of our day. well this guy nick hanauer he's trying to. stop themselves trying to save us up another words he knows he deserved to be pitchforked he knows he's he deserves to get seen but he's trying to you know somehow make peace with those that will catch up with him and do what they did during the reign of terror remember the reign of terror they there was thirty five hundred banks to. were decapitated in paris up to forty thousand banks tours in france were were decapitated or got rid of during the post revolutionary cleansing of the banks tears of that era and this is where we're

ally currently being slapped with fines by banking regulators as well german commerce bank the german bank has been accused of conducting business with an iranian state sponsored shipping firm and could be forced to cough up between six and eight hundred million dollars in order to resolve investigations into its compliance with u.s. sanctions now over the past five years over half a dozen foreign banks have settled with u.s. authorities over sanctions violations to the tune of more than twelve billion dollars again these are not u.s. banks they're foreign banks back in two thousand and twelve british lender standard chartered was accused of hiding two hundred fifty billion dollars worth of iranian transactions from regulators and ultimately forked over six hundred million to u.s. authorities now here's the question what effect will all of these sanctions ultimately that's the million dollar question or the trillion dollar question potentially monday reuters published the following on this subject which i think sums it up pretty nicely financier's may grumble that the united states is

they came to washington to discuss their work with the bank and how the bank helped their companies compete in the global marketplace. every one of those panel members were extraordinarily decent people. hardworking business owners who create jobs and pay taxes and have families and a civic sense of duty. this is why i'm so offended by this label of crony capitalists that critics like to attach to uses of the bank. those of white house know what it's like to live behind a label understand how they work. once you're able to put a label on something or to someone and it sticks, then you can be done with them. and if enough people can be convinced that customers of the ex-im bank are crony capitalist, well, there's nothing left to do but get rid of them. it's so important to note that while a good amount of the bank support goes to large company the vast majority of ex-im transactions, nearly 90%, help small piss. in fact, if the ex-im bank were abolished today it would affect small and medium-sized businesses just as much or more s large exporters. perhaps more given the distinct challenges a

saluting some everywhere isn't it as been a week of banking fines foes felt his largest bank. agreed to pay a record nine point five billion dollars to u.s. prosecutors the settlement is over allegations that france's largest bank violated trade sanctions that were imposed against trade with iran. and it was goldman sachs the u.s. bank was fined eight hundred thousand dollars by a u.s. regulator for failing to ensure the trades in its don't took place at the best price all dog pools are trading areas that keep prices private but they're still expected to offer the best prices available in the u.k. as barclays could be next the british bank is accused of falsifying documents missed representing benefits to clients including pension funds in response to the finding of the case shares of the bank dropped five percent. funds in russia then banking data will soon no longer be private the tax man will now have the right to demand access to anyone's. now details at any time where somebody who also have to inform the taxi service about the opening and closing of savings accounts withi

those four big banks they were both that was not written off. that debt was a was kept alive examined the money printing and so now you've got the zombie banks and they are gobbling up essentially any any possibility of economic growth there or impediment to growth so you are you what you guys would recommend would be to get rid of these predatory banks i would think right now there if there are a de facto tax on the economy they're not providing any service so you know they're like the old prussian. manner of lords that used to preside over the entire region extracting rents from the economy without giving anything back or let me just remind folks the book is the contradictions of austerity it's a fairly academic tome but short of that it's dense but short so it is readable very well it's not too long. the baltic region is currently in the grip of an epic housing bubble now similar to london canada australia us trying to honk on paris how is the baltic bubble in relation to these other bubbles it shares some. features with what we see in the un

the second-biggest is another austrian bank. every bank has a slightly different loan book.t everybody will have the same charges. but the pressure from bad debt and fund in hungry will hit every bank. >> thank you for joining us. joining us on the phone from vienna. these are the top headlines this hour. jpmorgan may have helped bnp hide transitions -- . transactions bnp hid billions of dollars in transactions involving sudan. the money was transferred to jpmorgan without any mention of the country. jpmorgan has not been accused of wrongdoing. fell more than economists expected in may. recent surveys suggest tensions between russia and ukraine have increased uncertainty. theme, on the russian the country is being warned. barack obama and angela merkel have agreed to coordinate more costs against the nation if it is not the escalate in ukraine. it did not list the potential costs. mycex has regained losses from the start, dealmaking has dropped to 2010 lows in russia. as russia struggles to boost its $2 trillion economy. so matt, thank you for joining us. is this to do with

commercial banks. so, again, this notion somehow this bank is competing with the private sector when, in fact, it's basically prohibited in their charter and 98% of the deals are actually done with an individual bank shows that this is really a tool for our commercial banking. so these are banks everywhere from alaska commercial fishing, agriculture bank in anchorage to wallace state bank in texas and national banks like wells fargo and others. so they find it a very, very viable tool and something that is important to do. according to a recent statement by the bank earns for finance and trade and financial services roundtable, the export-import bank of the united states plays a critical role -- quote -- "in international trade by providing financing products that fill the gap in trade financing that otherwise would not be provided by the private sector" -- end quote. so we're hearing from these individual banks who are saying this and basically articulating that this is a tool. in fact, one c.e.o., jo

now, the french banks and the german banks, that would be another issue. but it seems as if from our perspective that the european policymakers are very aware of the issues that clearly the european banks need to prop up more capital. but all things being equal, the european banks are not that bad in shape. and, you know, there are all these systemic issues, but i think this will month over. >> from an investment perspective, do you think there's juice in some of these european markets, particularly in the periphery? >> well, it's always -- you know, the analogy that i've seen in terms of investing in the peripheral countries is like driving your car with a hand brake on. so it's difficult, at best, always. so, you know, the confidence has returned to the peripheries. remember, just two years ago, i think it was, the yield on the portugal bonds and the greece bonds, you know, were well north of double digits and they've come down significantly. so investor confidence has been restored if you look at it from that point of view. and this is perhaps just a bi

the federal reserve bank of new york has accused deutsche bank, the u.s. operations, of inaccurate and unreliable reporting. that's according to the "wall street journal." they reportedly said the bank, quote, requires wide ranging remedial action and has made no progress fixing previously identified problems, including shoddy reporting and weak technology. shares this morning under pressure as you can see -- actually, that's gsk we're showing you, deutsche bank earlier in the session down about 3%, but gaining back some of the losses this morning, too. david enrich will be joining us later in the showed and we'll discuss that. >>> lots of earnings news out from europe today. disappointing figures out from abb. the firm missed expectations with net profit falling by 17% in the period. the engineering giant blamed a continued weak performance in its loss making power unit which it says would weigh on earnings in the current quarter. dutch painter axa mobile was boosted by decorative paints business in europe and in asia. resolute cost cutting helped boost t

banks. helpused arab banks to disguise the dollar transactions. banks wouldtellite pass this payment onto jpmorgan without any revelation that it is related to sudan. suddenly jpmorgan had this payment that it passed on without knowledge that it was related to sudan. thisaribas thought that was the way that it could avoid any sort of legal repercussions. >> so that was the whole tactic, to deliberately get around, or they were just trying to skirt the sanctions? >> this is all according to legal documents. initially they got advice from lawyers. they got a memo from the lawyers saying, if you use a u.s. bank you could protect your self from sanctions. later, the lawyers said, this is a legal. bnp paribas was warned that this would be illegal, if they were trying to hide these payments by routing them through jpmorgan. you cannot avoid punishment by going through a u.s. bank. just because you are not going directly, doesn't mean that you are not getting sanctions. jpmorgan, and also the legal

banks. the implicit deal was, you will do this and you implement our housing program. if you go bust, we will bail you out. forget everything you read that comes out of washington in terms of accounting. this was the bailout costs that you put on the budget had nothing to do with the cost. it is the implicit cost. member, if you can keep a zombie alive and give it no tax liabilities and very cheap debt, it is the franchise value that bails out, not those costs that they report on the budget very those are a joke. so, the biggest bailout myth that was exposed was that somehow government securities are backed by fixed-rate orbiters are liquid. there's no such thing. prices are going to be very volatile. we give a lot of short-term financing of illiquid instruments. that has been a root cause of many financial crisis in the past. the response of bearing out wall street was, oh, we have to bail out main street, two. there are lots of ad hoc mechanisms that tried to do that. the bottom line was t

why is central banking so crucial? obviously, because the monetary stability is a key component of he common good, the global commons, as they say in new york. yes, and by stability we mean ow and stable inflation, and we know from bitter experiences in the archives of the imf about the damage that high and volatile inflation can do. we no much better now also the effect of deflation. we also understand clearly now that in order to achieve price stability, we need some policy framework directed towards the financial sector, something which was not that all that familiar when i joined the imf. the financial sector was an area where we were were not allowed to go. i remember a tremendous conversation about that when we started discussing about suggestions i wanted to make to the banking community, and then she told me, never lecture the bankers. never! f course, we continued lecturing a little bit, but nevertheless, we were wearing difficult counts -- gowns. something which is very unique, their ability to respond quickl