mr. volcker, i see madam labelle nodding a lot. what is going through your mind as mr. volcker is speaking? >> well, i need to go back to jim. we have been mining those ever since and keep using them. many were with us at our 20th anniversary of transparency international in berlin, and this is part of what we talked about, and president kim, we are also mining your words, especially your speech at the cfif, a very important speech in terms of demonstrating the current leadership of the bank for this issue. you know, listening to paul and president kim talking about the effect on people, this is what is going through my mind. i was looking at data recently. if you have a country where more than 60% of the people have to pay a bribe, and you look at the number of indices -- let's take maternal mortality -- in those cases, over 480 women die each year out of 100,000. when you look at countries where less than 30% of the people say they had to pay a bribe in the last year, 57 women died. if you take it down further, then it is about 10 out of 100 women. you could do the sam

mr. volcker, i see her nodding. what is going through your mind? >> we have been mining those ever since. we keep using them. this was part of what we talked about. president kim, now we are mining your words. your speech at the csis which was an important speech. listening to both paul and president kim, talking about the effect on people -- this is what came to my mind. i was looking at data recently. if you have a country where more than 60% of the people have to pay a bribe. in those cases, over 480 women die each year out of a hundred thousand. in countries where less than 30% of people said they had to pay a bribe, less than 57 women died. there is the same thing with water and all these indices. the point that i would like to go back to in terms of paul is the one about how people -- it is not just that it kills people, it prevents them from having a life or quality of life, it concentrates the money into the hands of 10% of the population. it is also what happens with the trust of the people in their government. this, when we do surveys and

mr. volcker knows i am paying attention, vision without execution? is it possible to work as a world together? >> the world bank is in a unique position. its membership is the community of nations. you can be the one who will espouse the vision and help with execution. simple ideas will make it more difficult -- it will make the movement to the money market difficult. let's think -- strengthened further for having a passport for funds. >> i find this very interesting. that is a new one. if we look at the next 10-15 years, given from where you are, our population will go up to 8.5 billion by 2025. movement to cities, urbanization is key. if you look at the emerging countries and their demand and needs for greater resources, both looking at urbanization as well as population increase, extreme weather -- when you begin -- and the depletion of some of the resources -- looking at the infrastructure demand, ernst & young estimates 57 trillion until 2030. the amount of money that could be lost and resources or that could be saved could make a huge differenc

mr. volcker, i see madam labelle nodding a lot. what is going through your mind as mr. er is speaking? >> welcome i need to go back to ji -- well, i need to go back to jim. those evern mining since and keep using them. anywhere the -- many were with anniversary of transparency international in berlin, and this is part of what we talked about, and president kim, we are all some minding your -- also minding your words, especially your speech at the cfif, a very important speech in terms of demonstrating the current leadership of the bank for this issue. paul and listening to president kim talking about the effect on people, this is what is going through my mind. i was looking at data recently. if you have a country where more than 60% of the people have to pay a bribe, and you look at the number of indices -- let's take maternal mortality -- in those cases, over 480 women die each year out of 100,000. when you look at countries where less than 30% of the people say they had to pay a bribe in the last year, 57 women died. if you take it down further than -- further, then it

mr. vogler -- volcker knows i am paying attention, vision without execution? >> the world bank is in a unique position. its membership is the community of nations. you can be the one who will espouse the vision and help with execution. simple ideas will make it more difficult -- it will make the move in a money market difficult. let's think -- strengthened further for having a passport for funds. >> i find this very interesting. that is a new one. if we look at the next 10-15 years, given from where you are, our population will go up to 8.5 billion by 2025. movement to cities, urbanization is key. if you look at the emerging countries and their demand and needs for greater resources, both looking at urbanization as well as population increase, extreme whether. -- weather -- [indiscernible] when you begin -- and the depletion of some of the resources -- looking at the infrastructure demand, ernst & young estimates 57 trillion until 2030. the amount of money that could be lost and resources or that could be saved could make a huge deference -- difference in term

mr. volcker. weigh in on this, who would you give the nod to? >> first of all i can't get over the idea that i was in teddy roosevelt's spot. i'm really charged by that. i think, you know, weight wise we almost have the right position right there. >> that's too funny. >> there i am in the teddy spot. i can't stop thinking. i don't think the histories has been written yet. if you think about the arc of public opinion on quantitative easing, there were vociferous opposition to qe1. that now is now broadly seen as having been essential and saving the u.s. economy. we'll see what happens with two and three over time. but the history of what bernanke has done is not written because they're not out of it yet. it may be we fondly remember bernanke and forget the two-by-fours and construction the same day we have volcker in the sense there's a certain delusion of nostalgia. we forget it was actually larry's job to keep the construction workers away from volcker. >> can i say -- >> i will say this, though, what steve just said about bernanke i think is v

mr. ther vogler, -- volcker, i see her nodding. what is going through your mind? have been mining those ever since. we keep using them. part of what we talked about. president kim, now we are mining your words. sour speech at the csi which was an important speech. listening to both paul and president kim, talking about the this is whatple -- came to my mind. . was looking at data recently if you have a country where more than 60% of the people have to pay a pride -- bribe. cases, over 480 women die each year out of a hundred thousand. 30%ountries where less than of people said they had to pay a bribe. , less than 57 women died. there is the same thing with water and all these indices. the point that i would like to go back to in terms of paul is the one about how people -- it is not just that it kills people , it prevents them from having a life or quality of life, it concentrates the money into the hands of 10% of the population. it is also what happens with the trust of the people in their government. this, when we do surveys and ,ook at surveys that others do i

mr. volcker came in and he really dead put the fed on a great track from the mid-1980s onwards and we had a big crisis that was going on. and this includes the federal reserve and it is part of this. but there will be a lot of learning as well. >> almost a century now, i think the federal reserve has created a tremendous amount of trust on the part of the american people. >> there is a sense of security that i think of stability which we do have personal banking for. we don't always think about if the check will clear or the doors will be open. >> central banks understand that it is hidden from view. >> financial services are part of this. financial institutions as well. this includes regulatory supervisor oversight. >> this includes maximizing employment in the country. and if there are any special topics, this is part of the information that we get with people in the communities and that has been part of the transmission to our senior management and the president will take that information to washington. when the federal open market community needs and the information ultimately affects

mr. volcker from banks gamble and with money because they could be bailed out by us? >> first of all all banks engage in taking risks. so you will never eliminate risk from the system. the idea there will never be too big to fail is a lofty goal, i don't know it is achievable. in terms of what the average consumer can expect, i imagine higher prices and less liquidity in the market. adam: for somebody like me in simpleton terms when things can trade with their money, they can create more money they can then turn around to lend to people like me. that is what you mean by less liquidity, right? >> and banks make loans they create money. in this instance when you say there is less liquidity because banks are not in the market buying and selling as much as they were before with fewer buyers and sellers, the supply and demand would indicate they would be less demand and prices will go up all things being equal. adam: how does that affect me as the average consumer? how will that impact me? >> if you own securities and you want to sell them, you will not get as much money o

mr. volcker, but he does impress this upon everyone, you need multiple fail safes. it's like nuclear power, has to be used with great, great caution. capital may be the right way to go, but the bosel committee, oh dear, didn't get it quite right, and the risk weights used in the main focus, the risk weights that we use are problematic, what is a low risk weight asset in the european context? sovereign debt. what is the only thing we know about the current european context, sovereign debt is not free, so these issues continue to play out. >> i think we have time for one more question before we adjourn. anymore questions from the audience? yes. >> i was interested in your comment about how the structure of the federal reserve system is unique in that many other central banks don't have this hybrid structure, and i wondered if you could comment on what you think the advantages or disadvantages of that are and feelings on congress, as you said, the federal reserve act could be opened up. i'm curious to know what you think about that structure and looking back on that. >

mr. secretary, my question is about the volcker rule. like you, i was pleased to see that the regulators final -- finally came out with a rule. i think it's strong and comprehensive. i'm concerned by the exsense for pro pry tear trading with respect the sovereign bonds. frankly, the bonds. the hmm bank brought low by investment in greek debt is probably not just an idea. certainly a possibility in the future. i wonder if you can address the ability under the volcker rule of the banks to invest in securities which could be risky and volatile over time. >> congressman, obviously our initial core concern was the treatment of u.s. treasuries. and issues arose particularly with regard to the impact that the rule would have on banks with relationship with other foreign nationals and their sovereign debt. i believe the way provisions were worked out provides guidelines, you know a path for sovereign debt to be treated appropriately. i am -- i think if you look at the structure of the resume it's clear there is accountability at the level of the

volcker rule. again, thank you. not have a statement. i want to thank you, mr. secretary, for those kind words, and thank my colleagues on the council. very rewarding working with all of you, and i think the council has served its purpose of helping us work together better and to better coordinate our efforts. very important that we recognize the financial system is a system. we cannot look at a piece by piece, but as a whole, and the council has been effective in promoting that holistic approach to oversight and regulation. so thank you, and again, it is been a pleasure working with all of you. >> on behalf of the council, thank you both for to read this service. [applause] -- four tremendous service. -- for tremendous service. [applause] as we approach the end of the year, i think it is safe to say that in recent months we have seen one of the most active financial reform since the president signed dodd- frank into law. and finalize put mortgage will. this council designated companies for enhanced standards. supervision, new requirements for otc derivatives, p

mr. rose. 443, pounds sterling. include arrange of the brain. england reigns supreme. >> up next, discussing the volcker >> this is "bloomberg surveillance." ofin the seventh year financial crisis, washington says wall street must live by the volcker rule. the customer comes first. former presidents travel to johannesburg to pay respect to the memory of nelson mandela. in atlanta, they say enough. taxpayers could be on the hook themillions and billions if atlanta braves play in a new palace. good morning, everyone. it is "bloomberg surveillance." we are live from our world headquarters in new york. tuesday, december 10. i'm top -- i'm tom keene. joining me are scarlet fu and alix steel. guest host -- they stole the name house of cards from him, william cohan, contributing editor and bloomberg view columnist. >> a busy day all over the world. we will start in china. lesstrial output rising than estimated in november while retail sales unexpectedly accelerated. a mixed picture of growth as leaders gather in beijing to set economic policy for the coming year. economic data here in the u.s. -- 7:30 a.m., sm

mr. dimon has confronted this already. >> in the long run, it adds jobs. the really hard thing about the volckery requires traders firms to make judgments about the motivations of each and every trade. it is absolutely the wrong approach, from my point of view. what we should be doing is regulating capital and risk, and we're doing that, but this is an added compliance requirement that is going to produce, in my view, very little benefit. >> we have other agendas could i have got to wrap this up. let me ask the question i asked of the nobel laureate yesterday. the careful what you wish for. as you look at your wall street, what am i being careful and wishing for now? >> this process -- fortunately, the regulators delayed the implementation, which will hopefully it was time to work out some of the bugs -- but this process inevitably means less liquidity, particularly in the bond markets. that means higher spreads, and that means that investors, mom- and-pop and pension funds and insurance companies, are going to find it a little bit more expensive to trade and reposition their portfolios, and tha

volcker rule. again, thank you. >> i do not have a statement. i want to thank you, mr. secretary, for those kind words, and thank my colleagues on the council. very rewarding working with all of you, and i think the council has served its purpose of helping us work together better and to better coordinate our efforts. very important that we recognize the financial system is a system. we cannot look at a piece by piece, but as a whole, and the council has been effective in promoting that holistic approach to oversight and regulation. so thank you, and again, it is been a pleasure working with all of you. >> on behalf of the council, thank you both for tremendous service. s we approach the end of the year, i think it is safe to say that in recent months we have seen one of the most active periods of financial reform since the president signed dodd-frank into law. agencies have put and finalize mortgage will. this council designated companies for enhanced standards. federal reserve supervision, new requirements for otc derivatives, poor trading went to into effect to reduc

volcker rule named after its chairman. it was a practice seen by some as a contributor to the 2008 financial crisis. thank you, mr. chairman. i support the staff in andlizing this rule extending the performance. . i want to congratulate the staff for completing this work and making these difficult judgments. this will help with financial speculation in institutions and , anre a safety net important liquidity's and the markets, and also safety and security of financial institutions. you have worked very strike, in this role, just the right balance. i congratulate you on doing that. given the absence of the distinction, i think this is an important responsibility to make sure that this works as intended. i support it. i thank you for all of your hard work. i support the adoption of the final rule. like the vice chair and you have indicated, implementation here, probably more than most rules, is the key. there is a role to play there. a series of roles. we have to navigate carefully. >> i want to set a high bar for regulatory banking. we want to go far and strengthening the bar. we strengthened the hedging role that

mr. bernanke suggest that we did regulation wrong at the end of the depression, is washington back in the mindset of another time? are they fighting the last war with the volckerolcker rule attempt to get at the inherent embedded conflict of interest that go with sort of the fully diversified financial entity. it may not turn out to be the right answer. most people think that these things are not once for all the learning processes. we may discover if there are problems with this and have to modify it later on. but i don't think we are going back to that "let's overdo it" mindset. >> if we look at the global financial system, that the eu and the u.s. are going at it differently, what is the instability level of the global financial system? >> by far, the biggest risk -- >> the laureate iphone. it doesn't turn off. [laughter] >> the biggest risk is the leverage in the european system. very high. much higher than ours. so, mild shocks could cause big problems. >> continually. will we see the u.s. regulators discuss more with the european regulators to try to stem the risk of saving what we are doing at home? yeah, and the banks for international settlements and

volcker rule is part of it, and leverage as well. >> the gentleman's time has expired. the chair now recognizes the gentleman from north carolina, mr mckendree, for five minutes. >> mr. chairman, i request five minutes -- to the treasury secretary and to response from treasury to those letters. >> without objection. >> secretary lew, thank you for being here. i want to take this for the record. article i section -- article one of the u.s. constitution establishes and making vital oversight authority of the congress vis-À-vis the executive branch, and i'm sure you agree with that notion. on your treasury department has stiff armed this committee in its oversight capacity. and it's unsupported refusal to provide complete responses to this committee. chairman garrett already covered is concerned the ice and children on august 22 requesting documents that were the subject of a foia request made by a public interest group. the treasures position to the department would provide this to me with only redacted documents that that group already received. this implies that foia is applicable to congress. i hope that you would understand foia

volcker rule, portfolio hedging. some of the people that wrote this bill, you know, some of these hearings that mr. levin had.understand the vernacular of the market much less regulating it. all of those things are keeping us moving forward. i live in a little town, guys. they constantly talk about. why don't you talk more about, how can i plan for the future when i have no idea what the future's going to cost me? these are big deals and to see these kind of numbers makes me so optimistic that maybe we'll get some of these knuckle heads out of d.c. and we'll really clear the zone for some stellar growth in the futures. >> i will say there's a lot of people writing in that say the irs was all desperate guys acting on their own too. there's one guy that reports all the -- how did they do it at the irs? i guess it's just maybe -- i don't know. i think it was a little by skewed. you don't think it was a little bit skewed? >> i don't want to get into this. i want to talk about the gdp number here. >> he's fired up. >> because he's calling me fat. >> he's throwing his weight around. >> the inventory bill and the nu