1 00:00:05,120 --> 00:00:09,200 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Along 2 00:00:09,200 --> 00:00:13,160 Speaker 1: with Jonathan Ferrell and Lisa Brownwitz. Daily we bring you 3 00:00:13,280 --> 00:00:18,600 Speaker 1: insight from the best and economics, finance, investment, and international relations. 4 00:00:18,960 --> 00:00:23,840 Speaker 1: Find Bloomberg Surveillance on Apple Podcast, sun Cloud, Bloomberg dot Com, 5 00:00:23,920 --> 00:00:30,000 Speaker 1: and of course on the Bloomberg terminal. Joining us from day, 6 00:00:30,000 --> 00:00:33,600 Speaker 1: say on what is shaping up today? And it started? Wait, Tomkine, 7 00:00:33,800 --> 00:00:36,200 Speaker 1: You've got a special guest for us. Well, John's gonna 8 00:00:36,200 --> 00:00:38,960 Speaker 1: be very interesting if you remember yesterday afternoon, and here's 9 00:00:39,000 --> 00:00:41,640 Speaker 1: the headline buried in the news flow the Bank of 10 00:00:41,680 --> 00:00:45,280 Speaker 1: England Governor Andrew Bailey. This is at the i F 11 00:00:45,360 --> 00:00:49,440 Speaker 1: Annual Membership meeting yesterday in conversation with Tim Adams, the 12 00:00:49,520 --> 00:00:53,280 Speaker 1: President and Chief Executive Officer of the Institute of International Finance. 13 00:00:53,320 --> 00:00:57,320 Speaker 1: And we begin today's coverage in Washington with Mr Adams 14 00:00:57,360 --> 00:01:00,640 Speaker 1: with his deep experience with the Bush administration and with 15 00:01:00,800 --> 00:01:04,720 Speaker 1: international economics, certainly Tim in time of crisis. So thank 16 00:01:04,760 --> 00:01:07,479 Speaker 1: you so much for starting our day, uh strong, We've 17 00:01:07,520 --> 00:01:09,960 Speaker 1: got axel Weber coming up as well. Much more on 18 00:01:10,120 --> 00:01:13,759 Speaker 1: year from that. What was it like yesterday when Governor 19 00:01:13,800 --> 00:01:17,720 Speaker 1: Bailey set reset the global debate. Thanks Tom, it's always 20 00:01:17,720 --> 00:01:19,520 Speaker 1: a pleasure to be with you. Thanks for having me. 21 00:01:19,720 --> 00:01:21,880 Speaker 1: You know, look, I think we're hearing from from Governor 22 00:01:21,920 --> 00:01:25,360 Speaker 1: Bailey and others will have Krota and christ Legard today. 23 00:01:25,640 --> 00:01:28,080 Speaker 1: They're serious, they're serious about taking the punch bowl the way. 24 00:01:28,080 --> 00:01:30,720 Speaker 1: It's time to reverse the policies we've seen over the 25 00:01:30,720 --> 00:01:32,960 Speaker 1: past seven to eight years. It's time to move on 26 00:01:33,000 --> 00:01:35,800 Speaker 1: to the new normal. And I think Andrew said he's 27 00:01:35,840 --> 00:01:39,679 Speaker 1: ready to get on with it. Uh Stanley Fisher five 28 00:01:39,760 --> 00:01:42,880 Speaker 1: years ago, six years ago talked of ultra accommodative. We've 29 00:01:42,959 --> 00:01:46,680 Speaker 1: clearly moved through accommodative. We're trying to search for neutrality 30 00:01:47,160 --> 00:01:51,040 Speaker 1: and even some of these bankers desire a restrictive state. 31 00:01:51,680 --> 00:01:55,120 Speaker 1: Does that put out the zombie companies? Is the final 32 00:01:55,200 --> 00:01:59,040 Speaker 1: result of all of this movement that we eliminate the 33 00:01:59,120 --> 00:02:02,120 Speaker 1: zombie companies? And indeed, I say the zombie banks of 34 00:02:02,160 --> 00:02:05,559 Speaker 1: which you represent, Yeah, well I don't represent zombie banks. 35 00:02:05,800 --> 00:02:08,480 Speaker 1: Banks are in good shape, but yes, the zombie company 36 00:02:08,520 --> 00:02:10,440 Speaker 1: is gonna go, and they should. This is creative destruction. 37 00:02:10,480 --> 00:02:12,679 Speaker 1: This is the way cycles work, and for far too 38 00:02:12,720 --> 00:02:16,240 Speaker 1: long we've had cheap liquidity, an abundant amount of liquidity, 39 00:02:16,240 --> 00:02:17,760 Speaker 1: and we fund a lot of firms, a lot of 40 00:02:17,800 --> 00:02:20,000 Speaker 1: sectors that probably shouldn't be in business. We need to 41 00:02:20,040 --> 00:02:23,760 Speaker 1: redeploy those resources, those assets in more productive ways. You 42 00:02:23,880 --> 00:02:26,680 Speaker 1: sit on the political side of this debate, serving the 43 00:02:26,800 --> 00:02:30,959 Speaker 1: younger president Bush, would you suggest that politicians have power 44 00:02:31,040 --> 00:02:35,239 Speaker 1: here or renewed power? With British shields out at five 45 00:02:35,720 --> 00:02:38,880 Speaker 1: with yen at one six? What's the power of politicians 46 00:02:38,880 --> 00:02:41,280 Speaker 1: this morning? Well, the politicians wanted both ways. They want 47 00:02:41,280 --> 00:02:43,720 Speaker 1: to get rid of inflation as quickly as falsile because 48 00:02:43,720 --> 00:02:46,760 Speaker 1: they see it every day gasoline prices, for example. But 49 00:02:46,840 --> 00:02:48,320 Speaker 1: they want to do it in a painless way. They 50 00:02:48,320 --> 00:02:50,360 Speaker 1: want to do it in a way that doesn't create disruption. 51 00:02:50,560 --> 00:02:53,200 Speaker 1: That's very difficult to do. Central bankers haven't probably the 52 00:02:53,200 --> 00:02:55,360 Speaker 1: toughest job they've ever had right now, Okay, I'll go 53 00:02:55,440 --> 00:02:57,919 Speaker 1: with that. But Secretary Guy in your fifteen years ago 54 00:02:58,000 --> 00:03:01,000 Speaker 1: seventeen years ago would say the salute is to extend 55 00:03:01,040 --> 00:03:04,679 Speaker 1: the timeline. Why are we in such a hurry to 56 00:03:05,400 --> 00:03:09,480 Speaker 1: bury the economy into a global recession? What's the race here? Yeah, 57 00:03:09,520 --> 00:03:11,280 Speaker 1: I think there's a sense of catch up that they're 58 00:03:11,280 --> 00:03:13,600 Speaker 1: waiting too loranded and so they want to make up. 59 00:03:13,680 --> 00:03:15,840 Speaker 1: I think some of it is just bringing back to 60 00:03:15,919 --> 00:03:18,639 Speaker 1: reputation of the institutions. There's a concern that maybe some 61 00:03:18,960 --> 00:03:22,120 Speaker 1: the ft or other institutions have lost some of the 62 00:03:22,120 --> 00:03:25,160 Speaker 1: reputation as being tough. I think Jay wants to prove 63 00:03:25,200 --> 00:03:27,000 Speaker 1: a point, and I think you heard from Andrew yesterday 64 00:03:27,000 --> 00:03:29,160 Speaker 1: he wants to prove a point too. Can they stop 65 00:03:29,600 --> 00:03:32,760 Speaker 1: and pause? We can. I don't know that they will. 66 00:03:32,840 --> 00:03:35,520 Speaker 1: It depends on what they might see. Obviously, there's a 67 00:03:35,520 --> 00:03:38,200 Speaker 1: lot of turmoil around the World War and the continent 68 00:03:38,240 --> 00:03:42,000 Speaker 1: of Europe. Gasoline prices as we see from OPEC. I 69 00:03:42,000 --> 00:03:44,480 Speaker 1: think they're pretty adamant about moving ahead. I must turned 70 00:03:44,520 --> 00:03:46,400 Speaker 1: to banking, of course, a great mystery, and this goes 71 00:03:46,440 --> 00:03:49,920 Speaker 1: back to Fortis of Belgium years ago, which is where 72 00:03:49,960 --> 00:03:54,320 Speaker 1: in Europe there were transactions and combinations across borders. That's 73 00:03:54,360 --> 00:03:58,200 Speaker 1: always a challenging thing with the challenges in a selected 74 00:03:58,280 --> 00:04:02,560 Speaker 1: Swiss bank. Do you look for transactions and combinations within 75 00:04:02,600 --> 00:04:05,840 Speaker 1: the members of the Institute of International Finance. We do, 76 00:04:06,080 --> 00:04:08,480 Speaker 1: and you know, risk assessments and an important part of 77 00:04:08,480 --> 00:04:10,040 Speaker 1: what we do here. That's why we have a board 78 00:04:10,040 --> 00:04:12,920 Speaker 1: of fifty institutions that comes to the world, so we 79 00:04:12,960 --> 00:04:15,360 Speaker 1: constantly talk about risk. Our board meeting tomorrow will be 80 00:04:15,360 --> 00:04:17,640 Speaker 1: a conversation about where do we see weaknesses in the 81 00:04:17,680 --> 00:04:21,400 Speaker 1: system and how do our institutions communicate with each other? Okay, 82 00:04:22,279 --> 00:04:26,720 Speaker 1: I'll go with that, But the reality is selected regions, 83 00:04:26,920 --> 00:04:30,680 Speaker 1: book values of banking, or to use the American phrase, 84 00:04:30,960 --> 00:04:34,119 Speaker 1: flat on their back. What is the urgency right now 85 00:04:34,480 --> 00:04:38,520 Speaker 1: to pick a region within European banking? Well, we know 86 00:04:38,880 --> 00:04:42,400 Speaker 1: book to value of ratios and Europe are pretty soft. 87 00:04:42,720 --> 00:04:45,680 Speaker 1: But Europe needs something different than just monetary policy. They 88 00:04:45,680 --> 00:04:48,960 Speaker 1: need consolidation and four thousand institutions across exactly, and so 89 00:04:49,000 --> 00:04:53,080 Speaker 1: we need consolidation, and well, you need Brussels and capitals 90 00:04:53,080 --> 00:04:56,160 Speaker 1: to act. We need a consolidate capital market, which benefits 91 00:04:56,200 --> 00:04:58,200 Speaker 1: US firms. Here we have the largest capital market in 92 00:04:58,200 --> 00:05:00,800 Speaker 1: the US, which helps the JP Morgans and Americas, which 93 00:05:00,800 --> 00:05:03,640 Speaker 1: we'll hear from today and tomorrow here. But you're at 94 00:05:03,680 --> 00:05:06,640 Speaker 1: needs banking consolidation in the capital market Union. You were 95 00:05:06,839 --> 00:05:10,880 Speaker 1: steeped in Washington and in the politics of a traditional 96 00:05:10,920 --> 00:05:13,440 Speaker 1: Republican party, which some people would say has gone the 97 00:05:13,480 --> 00:05:17,520 Speaker 1: way of the fossil UH and that what does the 98 00:05:17,600 --> 00:05:23,960 Speaker 1: Biden administration need to do to solidify American leadership other 99 00:05:24,000 --> 00:05:26,919 Speaker 1: than to generate a strong dollar. Well, we need to 100 00:05:26,920 --> 00:05:29,520 Speaker 1: deal with energy, and I think they've tried it both ways. 101 00:05:29,560 --> 00:05:31,760 Speaker 1: And what is to talk about a climate transition, which 102 00:05:31,800 --> 00:05:34,000 Speaker 1: we should. But in the near term, we've got to 103 00:05:34,040 --> 00:05:35,920 Speaker 1: find ways to produce more oil and get it to 104 00:05:36,000 --> 00:05:37,560 Speaker 1: pipe to the place it needs to be. We need 105 00:05:37,600 --> 00:05:40,880 Speaker 1: to address the near term security and affordability concerns. Are 106 00:05:40,880 --> 00:05:43,560 Speaker 1: you gonna make headlines today like you did with Governor 107 00:05:43,600 --> 00:05:46,120 Speaker 1: Bailey yesterdays that are reduct here with Legard? Come on, 108 00:05:46,279 --> 00:05:49,280 Speaker 1: we are indeed stut a very big day to Madams. 109 00:05:49,320 --> 00:05:52,760 Speaker 1: Thank you so much with the Institute of International Finance, John, 110 00:05:52,760 --> 00:05:54,440 Speaker 1: and I'll tell you if he can do back to back, 111 00:05:54,880 --> 00:05:57,440 Speaker 1: uh John with Christine Lagard what he did with Andrew 112 00:05:57,440 --> 00:06:00,400 Speaker 1: Bailey yesterday. John, our jobs are a threat. T K. 113 00:06:00,640 --> 00:06:13,279 Speaker 1: Thank you a great word. Dan in Washington. Don't my 114 00:06:13,320 --> 00:06:15,839 Speaker 1: favorite guest this someone who used to be a central 115 00:06:15,880 --> 00:06:17,720 Speaker 1: bank it but isn't any more because they cannot tell 116 00:06:17,800 --> 00:06:19,479 Speaker 1: you what they think. And all of them come out 117 00:06:19,520 --> 00:06:21,960 Speaker 1: really harshly and say you're all making a terrible mistake. 118 00:06:22,000 --> 00:06:24,360 Speaker 1: Why are they going more aggressively. They're just so much 119 00:06:24,360 --> 00:06:28,240 Speaker 1: more open about their feelings about the situation. Tom Keane, 120 00:06:28,480 --> 00:06:32,080 Speaker 1: I think you've got the perfect guests to do just that. Oh, 121 00:06:32,160 --> 00:06:35,200 Speaker 1: I'm my interview of this meetings of the International Monetary Fund, 122 00:06:35,240 --> 00:06:37,960 Speaker 1: and it's here at the Institute of International Finance. Axel 123 00:06:38,000 --> 00:06:41,279 Speaker 1: Webber is the force of the ii F, the chairman, 124 00:06:41,360 --> 00:06:44,120 Speaker 1: but I must say, far more importantly, the former president 125 00:06:44,120 --> 00:06:46,880 Speaker 1: of the Bundesbank. His service to u b S is 126 00:06:46,920 --> 00:06:50,159 Speaker 1: noted as well. We begin on one hour conversation. We're 127 00:06:50,160 --> 00:06:53,200 Speaker 1: gonna have to cram one hour axcel into the moment. 128 00:06:53,480 --> 00:06:57,320 Speaker 1: And you taught a course at Boost School Chicago central 129 00:06:57,320 --> 00:07:00,960 Speaker 1: bank theories. In fact, what is the fact right now? 130 00:07:01,320 --> 00:07:04,239 Speaker 1: For J. Powell? I think the fact is that central 131 00:07:04,240 --> 00:07:08,760 Speaker 1: banks are in a really bad situation. They have started 132 00:07:09,000 --> 00:07:12,880 Speaker 1: late in raising rates. You could see already some break 133 00:07:12,920 --> 00:07:15,920 Speaker 1: into some trend break in the price level. In late 134 00:07:15,960 --> 00:07:20,320 Speaker 1: two thousand. They focused on the inflation rate very early. 135 00:07:20,440 --> 00:07:23,640 Speaker 1: Also X some elements that have been going up strongly, 136 00:07:24,000 --> 00:07:27,920 Speaker 1: and now the central banks are doing big steps to 137 00:07:28,000 --> 00:07:31,960 Speaker 1: catch up with reality, and there is some risk in that. 138 00:07:32,080 --> 00:07:34,960 Speaker 1: So I now look at monetary policy as an independent 139 00:07:35,080 --> 00:07:38,880 Speaker 1: risk factor. Uh, And I think monetary policy has a 140 00:07:38,920 --> 00:07:42,080 Speaker 1: way to go. I don't believe that the current inflation 141 00:07:42,160 --> 00:07:45,800 Speaker 1: rates will come down as easily as is predicted still 142 00:07:45,840 --> 00:07:48,520 Speaker 1: by most of the central bank models. So the tough 143 00:07:48,560 --> 00:07:51,200 Speaker 1: work is ahead. I got so many ways to go 144 00:07:51,320 --> 00:07:53,640 Speaker 1: here and just squeeze us in the time. Do we 145 00:07:53,720 --> 00:07:57,280 Speaker 1: need to abandon a two percent level? Something Bundesbank is 146 00:07:57,320 --> 00:08:01,440 Speaker 1: comfortable with, something I'm gonna say traditional economics is comfortable with. 147 00:08:01,800 --> 00:08:04,160 Speaker 1: But as part of the solution to move away from 148 00:08:04,160 --> 00:08:07,400 Speaker 1: a two percent level of inflation towards a three percent 149 00:08:07,520 --> 00:08:10,480 Speaker 1: level as appropriate, I think that would completely blow the 150 00:08:10,520 --> 00:08:13,920 Speaker 1: credibility of all central banks. If they were to do that, Uh, 151 00:08:14,080 --> 00:08:17,440 Speaker 1: they would be dead on arrival because if you what 152 00:08:17,480 --> 00:08:20,200 Speaker 1: you need to do is to re establish the credibility 153 00:08:20,240 --> 00:08:23,040 Speaker 1: of the two percent target at a rage running just 154 00:08:23,240 --> 00:08:26,679 Speaker 1: below ten percent, that's a very difficult task. So central 155 00:08:26,680 --> 00:08:30,320 Speaker 1: banks would, in my view, be completely misguided if they 156 00:08:30,320 --> 00:08:33,840 Speaker 1: were to question the target. Now, the point is, let's 157 00:08:33,880 --> 00:08:36,520 Speaker 1: get back to target and that will take them, you know, 158 00:08:36,600 --> 00:08:38,600 Speaker 1: at least two years. What we're gonna do now, folks, 159 00:08:38,600 --> 00:08:40,440 Speaker 1: is divingto some theory. And we can do this with 160 00:08:40,520 --> 00:08:43,319 Speaker 1: Professor Weber. I'm going to work off of a wonderful 161 00:08:43,320 --> 00:08:46,079 Speaker 1: piece Byambo's Evans Pritchard and the Telegraph. You can look 162 00:08:46,120 --> 00:08:50,280 Speaker 1: at a theoretical construct like the Phillips curve London School 163 00:08:50,320 --> 00:08:53,640 Speaker 1: of Economics the fifties, or the beverage curve. Wage cruitment 164 00:08:53,720 --> 00:08:57,679 Speaker 1: talks about from even farther back as well. Central banking 165 00:08:57,800 --> 00:09:01,760 Speaker 1: is hinging on a linkage between inflation an employment. Should 166 00:09:01,840 --> 00:09:04,120 Speaker 1: they do that or do they need to squeeze right 167 00:09:04,120 --> 00:09:07,600 Speaker 1: down to a more Germanic focus on inflation? Well, I 168 00:09:07,640 --> 00:09:11,160 Speaker 1: think they're They're long term. What really matters is the 169 00:09:11,200 --> 00:09:13,560 Speaker 1: amount of debt in the in the economy and how 170 00:09:13,559 --> 00:09:16,760 Speaker 1: it's accommodated by central banks. So I'm still a firm 171 00:09:16,760 --> 00:09:19,520 Speaker 1: believer that in the long run the balance sheet of 172 00:09:19,559 --> 00:09:22,680 Speaker 1: the Fed and monetary policy matter, and in the long 173 00:09:22,800 --> 00:09:26,680 Speaker 1: run inflation is largely driven by factors like how accommodative 174 00:09:26,760 --> 00:09:30,160 Speaker 1: our central banks for government debt. Of course, in conducting 175 00:09:30,200 --> 00:09:33,280 Speaker 1: monetary policies through the business idea, they need to look 176 00:09:33,360 --> 00:09:37,839 Speaker 1: at the link between output growth, employment and inflation. It's 177 00:09:37,840 --> 00:09:41,440 Speaker 1: a natural because their setting is within the economic in 178 00:09:41,480 --> 00:09:44,559 Speaker 1: the economy. But long run, I think they haven't looked 179 00:09:44,559 --> 00:09:47,640 Speaker 1: at the impact of this ultra easy monetary policy on 180 00:09:47,840 --> 00:09:51,000 Speaker 1: inflation that was about to come. How naive are we 181 00:09:51,320 --> 00:09:56,600 Speaker 1: about qt? Original? Unfounded? Rubini among others make jokes about it, 182 00:09:56,840 --> 00:10:01,360 Speaker 1: q E QT How original is it in that we 183 00:10:01,440 --> 00:10:04,480 Speaker 1: don't know really what's going to happen. I think the 184 00:10:04,520 --> 00:10:08,199 Speaker 1: central banks have amassed a massive balance sheet, all center 185 00:10:08,280 --> 00:10:10,400 Speaker 1: banks in the world, and if you look at the 186 00:10:10,480 --> 00:10:14,080 Speaker 1: last ten years, the fiscal expansion of roughly to the 187 00:10:14,120 --> 00:10:18,040 Speaker 1: tune of g d P globally has been accommodated by 188 00:10:18,040 --> 00:10:20,880 Speaker 1: an expansion of central banks balance sheet roughly of the 189 00:10:20,920 --> 00:10:24,760 Speaker 1: same amount. So this additional government debt didn't have to 190 00:10:24,800 --> 00:10:27,440 Speaker 1: be held in the market. It ended up in another 191 00:10:27,520 --> 00:10:30,680 Speaker 1: government balance sheet by the central bank. And we haven't 192 00:10:30,720 --> 00:10:33,880 Speaker 1: seen the interest impact and the long term inflation impact 193 00:10:34,240 --> 00:10:37,439 Speaker 1: of that liquidity having to come from the market as 194 00:10:37,440 --> 00:10:41,319 Speaker 1: opposed to come from another source of government funding. And 195 00:10:41,640 --> 00:10:43,880 Speaker 1: I think long run central banks need to bring their 196 00:10:43,920 --> 00:10:47,360 Speaker 1: balance sheet down. That will put pressure on debt and 197 00:10:47,440 --> 00:10:50,880 Speaker 1: governments to consolidate. And I think long run we cannot 198 00:10:50,960 --> 00:10:54,920 Speaker 1: continue to run deficits that are you know, mid single 199 00:10:54,960 --> 00:10:58,040 Speaker 1: digits and debt that is around under present Your history 200 00:10:58,400 --> 00:11:00,680 Speaker 1: is you are death. I'm sure term a medium turn, 201 00:11:00,800 --> 00:11:04,120 Speaker 1: long term analysis, there's a responsibility a character out of 202 00:11:04,160 --> 00:11:08,000 Speaker 1: bundes Bank that speaks for itself is the short term 203 00:11:08,040 --> 00:11:12,000 Speaker 1: path here to just extend things out, to ease up 204 00:11:12,000 --> 00:11:15,080 Speaker 1: on the raising of interest rates at an appropriate point 205 00:11:15,440 --> 00:11:18,760 Speaker 1: and use time to heal the wounds of the pandemic. 206 00:11:18,840 --> 00:11:21,600 Speaker 1: And this that expansion, well, I think you need to 207 00:11:21,640 --> 00:11:24,320 Speaker 1: start doing the U turn. You know this is a 208 00:11:24,400 --> 00:11:26,839 Speaker 1: change in times. Are we near the U turn? I 209 00:11:26,920 --> 00:11:29,880 Speaker 1: think central banks have started to raise rates late, but 210 00:11:30,360 --> 00:11:32,960 Speaker 1: in my view they started. And now what is important 211 00:11:33,000 --> 00:11:35,480 Speaker 1: is what j Pal said at the Jackson All speech. 212 00:11:35,720 --> 00:11:37,640 Speaker 1: You've got to keep at it to the job's done. 213 00:11:37,640 --> 00:11:40,680 Speaker 1: And the job is not done. And so central banks 214 00:11:40,720 --> 00:11:43,800 Speaker 1: have to raise interest rates and at the same time 215 00:11:44,120 --> 00:11:47,240 Speaker 1: they have to produce a balance sheet. How constrained is 216 00:11:47,280 --> 00:11:49,640 Speaker 1: e c B. How how many degrees of freedom is 217 00:11:49,679 --> 00:11:53,280 Speaker 1: Madame Leguard lost here with the war plus the overlay 218 00:11:53,320 --> 00:11:54,760 Speaker 1: we've been talking quite If you of the e c 219 00:11:54,920 --> 00:11:57,240 Speaker 1: d s in a worse position than to fit, their 220 00:11:57,320 --> 00:12:00,680 Speaker 1: economy is likely to take a much bigger hit. Their 221 00:12:00,679 --> 00:12:03,760 Speaker 1: monetary policy has weakened the euro and that is increased 222 00:12:03,760 --> 00:12:07,920 Speaker 1: price pressures for European citizens were much closer to the war, 223 00:12:08,160 --> 00:12:10,720 Speaker 1: and we're much more dependent on China in our exports, 224 00:12:10,720 --> 00:12:12,600 Speaker 1: and China is not doing well at the moment. Is 225 00:12:12,640 --> 00:12:15,000 Speaker 1: it true when you were in booth school teaching that 226 00:12:15,080 --> 00:12:17,200 Speaker 1: you gave out no ways and no bees. Were you 227 00:12:17,240 --> 00:12:20,040 Speaker 1: that tougher greater? No, I wasn't. I did have some 228 00:12:20,120 --> 00:12:23,760 Speaker 1: azing bees, but they were clustered around people that understood 229 00:12:23,800 --> 00:12:27,000 Speaker 1: the long term. Let me remind you that was in 230 00:12:27,080 --> 00:12:29,880 Speaker 1: two thousand eleven. There wasn't a textbook from which you 231 00:12:29,920 --> 00:12:33,440 Speaker 1: could teach the financial crisis because those textbooks was still 232 00:12:33,480 --> 00:12:36,040 Speaker 1: to be written seconds. Is there a textbook? Now we're 233 00:12:36,120 --> 00:12:38,920 Speaker 1: a good textbooks? Now they are good textbooks now excellent Ember. 234 00:12:38,920 --> 00:12:41,640 Speaker 1: There was some insurance here, of course. The chairman of 235 00:12:41,640 --> 00:12:44,480 Speaker 1: the Institute of International and Financia, former leader of the 236 00:12:44,480 --> 00:12:47,000 Speaker 1: Bund despect John. You and I would have gotten quality 237 00:12:47,120 --> 00:12:49,560 Speaker 1: ds in that course. I'm not sure how would've done 238 00:12:49,559 --> 00:12:55,959 Speaker 1: that wild song. Hey, Tom, do you think Tim Adams 239 00:12:56,160 --> 00:12:58,719 Speaker 1: who wants to be an anchor on Pluybock surveillance when 240 00:12:58,720 --> 00:13:02,160 Speaker 1: you're out, he's He's smooth, There's no question about it. 241 00:13:02,200 --> 00:13:05,080 Speaker 1: The gentleman from Kentucky can absolutely get it done. And 242 00:13:05,120 --> 00:13:07,720 Speaker 1: for that matter, John, I thought axel Weber was smooth 243 00:13:07,760 --> 00:13:10,440 Speaker 1: as well. Your thoughts, John Farrell on what we heard 244 00:13:10,440 --> 00:13:12,480 Speaker 1: from the leader of the bund spank him. I think 245 00:13:12,520 --> 00:13:14,320 Speaker 1: a lot of what we're experiencing right now is some 246 00:13:14,360 --> 00:13:16,520 Speaker 1: of the stuff he want about more than ten years ago. 247 00:13:16,720 --> 00:13:19,280 Speaker 1: That once you go down this path, it's very difficult 248 00:13:19,320 --> 00:13:23,040 Speaker 1: to get back out of it. From the ultra accommodative 249 00:13:23,120 --> 00:13:25,480 Speaker 1: to where we are right now, it is indeed his historic. 250 00:13:25,559 --> 00:13:28,080 Speaker 1: What I've heard this morning, folks is this is a 251 00:13:28,160 --> 00:13:31,760 Speaker 1: once in forty even fifty year moment for all within 252 00:13:31,880 --> 00:13:34,600 Speaker 1: finance and Global Wall Street. If you're part of Global 253 00:13:34,640 --> 00:13:37,160 Speaker 1: Wall Street, this is must listen. It is rare that 254 00:13:37,280 --> 00:13:40,079 Speaker 1: you speak to anyone in economics who actually read chapter 255 00:13:40,120 --> 00:13:44,000 Speaker 1: twenty three of a textbook which is on finance and bonds. 256 00:13:44,120 --> 00:13:46,760 Speaker 1: Klaus Canoe is a governor of the Dutch Central Bank 257 00:13:46,840 --> 00:13:51,160 Speaker 1: and is truly expert linking in economics to the fixed 258 00:13:51,200 --> 00:13:55,480 Speaker 1: income space, including British yields at five percent. Governor, thank 259 00:13:55,520 --> 00:13:58,000 Speaker 1: you so much for joining Bloomberg today. I've got to 260 00:13:58,040 --> 00:14:00,880 Speaker 1: first go to the ECB questions, can you explain to 261 00:14:00,960 --> 00:14:03,920 Speaker 1: me how the e c B can become more restrictive 262 00:14:04,520 --> 00:14:08,160 Speaker 1: rate rate seventy five basis points with the nominal g 263 00:14:08,320 --> 00:14:11,840 Speaker 1: dB construction of the continent. Where do they have the 264 00:14:11,880 --> 00:14:16,760 Speaker 1: animal spirit to withstand ever higher interest rates? Well, I 265 00:14:16,760 --> 00:14:19,680 Speaker 1: think to answer that question, you first have to sort 266 00:14:19,680 --> 00:14:21,720 Speaker 1: of look at where we are in terms of the 267 00:14:21,720 --> 00:14:26,200 Speaker 1: starting point. We're still way below neutral, so policy is 268 00:14:26,200 --> 00:14:29,640 Speaker 1: still accommodative. So I think it is no regret that 269 00:14:29,720 --> 00:14:34,240 Speaker 1: we have to end this accommodative phase of policy. And 270 00:14:35,400 --> 00:14:37,520 Speaker 1: I mean your question of how deep should we go 271 00:14:37,560 --> 00:14:40,520 Speaker 1: into a restrictive territory once we get there, well, the 272 00:14:40,560 --> 00:14:42,840 Speaker 1: course that bridge when we get there, it is original 273 00:14:42,960 --> 00:14:46,280 Speaker 1: right now you're in accommodated or auto accommodative. However you 274 00:14:46,320 --> 00:14:49,960 Speaker 1: want to phrase it as well, what happens next after 275 00:14:50,000 --> 00:14:53,560 Speaker 1: the presumed rate increase of the next meeting, Well, I 276 00:14:53,560 --> 00:14:56,960 Speaker 1: mean our president has stated very clearly that we are 277 00:14:57,000 --> 00:15:00,720 Speaker 1: currently in the phase of normalizing interest rates. That means 278 00:15:00,760 --> 00:15:04,160 Speaker 1: taking them to neutral. Unfortunately nobody knows with any level 279 00:15:04,160 --> 00:15:06,920 Speaker 1: of precision, but neutral is But I've been saying that 280 00:15:07,000 --> 00:15:10,440 Speaker 1: we need at least two more significant hikes before we 281 00:15:10,480 --> 00:15:15,400 Speaker 1: sort of enter the range of plausible estimates for for 282 00:15:15,560 --> 00:15:18,280 Speaker 1: neutral that will take us into next year. And I 283 00:15:18,320 --> 00:15:21,040 Speaker 1: hope that with the current uncertainty in the markets and 284 00:15:21,040 --> 00:15:24,120 Speaker 1: the bolt market fragility, I hope you don't mind that 285 00:15:24,200 --> 00:15:27,000 Speaker 1: I don't have my calendar cut out for three already. 286 00:15:27,440 --> 00:15:29,120 Speaker 1: I don't know I don't have my calendar cut out 287 00:15:29,160 --> 00:15:32,680 Speaker 1: for two, even even with some of my staff would 288 00:15:32,680 --> 00:15:34,720 Speaker 1: say that I don't know where the calendars for this 289 00:15:34,800 --> 00:15:37,480 Speaker 1: year as well. I stood at the ECB mowning with 290 00:15:37,560 --> 00:15:40,720 Speaker 1: atmar Issing long ago and far away, and it was 291 00:15:40,760 --> 00:15:46,560 Speaker 1: a core let's call it, Germanic Netherlands constituency wrapped around 292 00:15:46,640 --> 00:15:50,240 Speaker 1: another ECB in this crisis. Right now? Is the e 293 00:15:50,360 --> 00:15:53,520 Speaker 1: c be more unified than it was in two thousand 294 00:15:53,480 --> 00:15:57,040 Speaker 1: and eight? We are unified, so I think if you 295 00:15:57,120 --> 00:15:59,800 Speaker 1: look back over the last few years since the pandemic, 296 00:16:00,480 --> 00:16:04,760 Speaker 1: all decisions have been taken with a high degree of unanimity. 297 00:16:04,800 --> 00:16:08,840 Speaker 1: So we are very clear about our mandate. Inflation is 298 00:16:08,880 --> 00:16:15,560 Speaker 1: way too high scent in the Netherlands, ten percent in 299 00:16:15,560 --> 00:16:19,200 Speaker 1: the Euro Area, and even more important, underlying inflation trends 300 00:16:19,240 --> 00:16:23,080 Speaker 1: are pointing in the wrong direction. Core inflation almost five percent, 301 00:16:23,440 --> 00:16:26,280 Speaker 1: so we are determined to bring inflation back to target, 302 00:16:26,520 --> 00:16:30,000 Speaker 1: and we do understand that this will require some further 303 00:16:30,040 --> 00:16:32,720 Speaker 1: efforts from our site. This problem is not going to 304 00:16:32,800 --> 00:16:35,680 Speaker 1: go away with a little bit of slowdown of the economy. 305 00:16:35,920 --> 00:16:39,480 Speaker 1: It will require continued effort from our side, and the 306 00:16:39,520 --> 00:16:42,480 Speaker 1: Council is unanimous on that entire I have to go 307 00:16:42,640 --> 00:16:45,840 Speaker 1: with you to your bond expertise, linking it into a 308 00:16:45,880 --> 00:16:50,600 Speaker 1: greater economic system and the idea of yields coming up, 309 00:16:50,680 --> 00:16:53,040 Speaker 1: prices coming down. With the United Kingdom being in the 310 00:16:53,080 --> 00:16:56,960 Speaker 1: headlines this morning, it'll be another country next. These are 311 00:16:57,040 --> 00:17:01,240 Speaker 1: nonlinear functions. How close are we to a second derivative, 312 00:17:01,280 --> 00:17:06,560 Speaker 1: to a convexity and acceleration where people like you lose control. Well, 313 00:17:06,600 --> 00:17:09,040 Speaker 1: I think that need not be the case because that 314 00:17:09,200 --> 00:17:12,520 Speaker 1: is dependent I think on responsible policy. As long as 315 00:17:12,560 --> 00:17:15,639 Speaker 1: policy makers keep on doing the responsible things, then I 316 00:17:15,640 --> 00:17:19,760 Speaker 1: do think bond markets can be in control. But it 317 00:17:19,840 --> 00:17:23,800 Speaker 1: does put a premium on responsible behavior. Bond markets have 318 00:17:23,880 --> 00:17:27,439 Speaker 1: become much much more sensitive to death sustainability issues, so 319 00:17:27,520 --> 00:17:31,040 Speaker 1: that puts a burden on our fiscal authorities to also 320 00:17:31,240 --> 00:17:35,400 Speaker 1: continue to pursue responsible fiscal policies. With the medium term 321 00:17:35,440 --> 00:17:39,560 Speaker 1: orientation and with death sustainability being front and center of 322 00:17:39,560 --> 00:17:42,240 Speaker 1: their concerns. Is there a textbook and qut when you're 323 00:17:42,320 --> 00:17:45,359 Speaker 1: growing again? Was there anything about QUEI and QT? No, 324 00:17:45,600 --> 00:17:47,760 Speaker 1: you're making it up as we go, right, Well, we're 325 00:17:47,760 --> 00:17:49,480 Speaker 1: making out of as we go. Yes, of course we 326 00:17:49,600 --> 00:17:51,760 Speaker 1: learned from the experiences of all the central banks. I 327 00:17:51,800 --> 00:17:54,360 Speaker 1: think the way the FAT is dealing with QT, that's 328 00:17:54,400 --> 00:17:58,160 Speaker 1: clearly also going to be an example for us. They 329 00:17:58,240 --> 00:18:01,399 Speaker 1: managed to move it into the background very quickly. I 330 00:18:01,400 --> 00:18:04,280 Speaker 1: think a process like QT, it should be predictable, it 331 00:18:04,320 --> 00:18:06,840 Speaker 1: should be gradual, it should be even a little bit boring, 332 00:18:07,080 --> 00:18:09,800 Speaker 1: right I mean Janet Yellen once quipped it's like watching 333 00:18:09,840 --> 00:18:12,520 Speaker 1: paint dry, and that's a little bit. I think how 334 00:18:12,600 --> 00:18:14,800 Speaker 1: you want to shape such a program. I think the 335 00:18:14,800 --> 00:18:17,639 Speaker 1: FAT has been fairly successful in that and if we 336 00:18:17,640 --> 00:18:19,760 Speaker 1: can take that queue as well, I would be more 337 00:18:19,760 --> 00:18:21,879 Speaker 1: than happy to do so. It has not been boring 338 00:18:22,000 --> 00:18:24,760 Speaker 1: for Governor Bailey. He's making it up as he goes. 339 00:18:24,840 --> 00:18:27,200 Speaker 1: Literally in the last twenty four hours, What are the 340 00:18:27,280 --> 00:18:31,399 Speaker 1: lessons you've learned from the the nexus of Bank of 341 00:18:31,480 --> 00:18:35,119 Speaker 1: England and politics in England? What have you learned about 342 00:18:35,119 --> 00:18:38,399 Speaker 1: when the first of all that monitoring and fiscal policy 343 00:18:38,440 --> 00:18:41,080 Speaker 1: being at crossroads with at cross purposes with each other. 344 00:18:41,520 --> 00:18:45,480 Speaker 1: That's a very dangerous cocktail for for bond markets. That's 345 00:18:45,600 --> 00:18:48,439 Speaker 1: the first lesson that I would say. And secondly, the 346 00:18:48,520 --> 00:18:51,000 Speaker 1: UK is a little bit in a special position because 347 00:18:51,000 --> 00:18:54,120 Speaker 1: the bonds they bought are extremely long dated, so they 348 00:18:54,160 --> 00:18:57,560 Speaker 1: actively have to sell. We in the Euro Area like 349 00:18:57,640 --> 00:19:00,520 Speaker 1: in the US, and we have bonds over the full maturity, 350 00:19:00,560 --> 00:19:03,480 Speaker 1: and we think we can do qut by just rolling 351 00:19:03,520 --> 00:19:07,639 Speaker 1: off existing bonds by less than full reinvestment, which is 352 00:19:07,840 --> 00:19:11,120 Speaker 1: naturally a smoother process than having to actively sell. By 353 00:19:11,119 --> 00:19:15,320 Speaker 1: colleague John Faroll Adores Vermier, you're having the mother of 354 00:19:15,359 --> 00:19:19,400 Speaker 1: all lifetime Vermier shows in the Netherlands next year. Can 355 00:19:19,440 --> 00:19:22,800 Speaker 1: you see our show in Amsterdam and support of the 356 00:19:22,920 --> 00:19:25,840 Speaker 1: vermir show? Yes, of course, I mean if you want 357 00:19:25,840 --> 00:19:28,200 Speaker 1: to support it by all means. I think it's a 358 00:19:28,400 --> 00:19:32,720 Speaker 1: unique opportunity to see all the Vermier's that are everywhere 359 00:19:32,760 --> 00:19:34,879 Speaker 1: in the world in a different museum, in the reichs 360 00:19:34,960 --> 00:19:37,359 Speaker 1: Museum in Amsterdam. Absolutely, we would love to have you 361 00:19:37,400 --> 00:19:42,520 Speaker 1: and Mr Ruder show you and enjoy Claud to the 362 00:19:42,600 --> 00:19:46,120 Speaker 1: Dutch Central Bank suggesting we need to be an Amsterdam 363 00:19:46,240 --> 00:19:49,359 Speaker 1: next year. It was his suggestion some I'm buying that. 364 00:20:01,040 --> 00:20:03,760 Speaker 1: Let's head back down to Washington, d C. Tom Keane 365 00:20:03,920 --> 00:20:08,359 Speaker 1: with another fantastic interview. A nice update there, Lisa. And 366 00:20:08,400 --> 00:20:11,440 Speaker 1: it's really important, folks. Off pp I is how important 367 00:20:11,520 --> 00:20:15,960 Speaker 1: tomorrow's United States CPI numbers will be for these meetings 368 00:20:16,000 --> 00:20:18,720 Speaker 1: of the World Bank, the i F and the International 369 00:20:19,280 --> 00:20:23,040 Speaker 1: Monetary Fund. Tomorrow will come from from the offices of 370 00:20:23,119 --> 00:20:26,880 Speaker 1: the International Monetary Fund with some important interviews. Right now 371 00:20:27,320 --> 00:20:30,000 Speaker 1: we go all American and we can do that if 372 00:20:30,000 --> 00:20:32,520 Speaker 1: you go to the Art Institute of Chicago and go 373 00:20:32,600 --> 00:20:35,320 Speaker 1: to the very back of the Art Institute, pass to 374 00:20:35,440 --> 00:20:39,119 Speaker 1: Chical there is the old trading room of the Chicago 375 00:20:39,200 --> 00:20:43,000 Speaker 1: Commodity Exchange. It's really something to see from another time 376 00:20:43,040 --> 00:20:48,240 Speaker 1: and place. That is the CFTC associated where our Midwest, 377 00:20:48,280 --> 00:20:52,440 Speaker 1: but much more with what to do with derivative instruments. 378 00:20:52,560 --> 00:20:56,600 Speaker 1: Kristen Johnson is c f TC Commissioner. Have you wonderful 379 00:20:56,640 --> 00:20:58,480 Speaker 1: to have you here with us today. Have you ever 380 00:20:58,960 --> 00:21:02,040 Speaker 1: visited that ritual room in the back of the Art Institute. 381 00:21:02,119 --> 00:21:04,080 Speaker 1: I have not, and I look forward to this newly 382 00:21:04,119 --> 00:21:07,879 Speaker 1: minted commissioner. You must go to the Art Institute and 383 00:21:07,920 --> 00:21:10,520 Speaker 1: go to the back and there is part of my 384 00:21:10,560 --> 00:21:14,639 Speaker 1: family's past. Wow, I've headed to Chicago November. Have to 385 00:21:14,680 --> 00:21:17,639 Speaker 1: see it. Let's add to your list. Now the discussion 386 00:21:17,760 --> 00:21:21,919 Speaker 1: everybody wants to have, which is bitcoin? And I refuse 387 00:21:22,080 --> 00:21:25,879 Speaker 1: to believe this is a soft more turf war between 388 00:21:25,960 --> 00:21:29,760 Speaker 1: Kristin Johnson and my good friend Gary Gainsler. How can 389 00:21:29,800 --> 00:21:33,280 Speaker 1: you two get along on what to do with bitcoin 390 00:21:33,600 --> 00:21:36,639 Speaker 1: and not make it as silly turf four? Oh, this 391 00:21:36,720 --> 00:21:38,399 Speaker 1: is a great question, and not just a great one, 392 00:21:38,400 --> 00:21:41,640 Speaker 1: a necessary one to be honest. In the current crypto 393 00:21:41,800 --> 00:21:44,920 Speaker 1: onset of the current crypto winner, uh two trillion dollar 394 00:21:45,119 --> 00:21:48,320 Speaker 1: assets sell off, what comes sharply into focus from my 395 00:21:48,400 --> 00:21:53,240 Speaker 1: perspective is institutional investors and retail investors starting with the ladder. 396 00:21:53,280 --> 00:21:55,399 Speaker 1: In fact, what we could think carefully about is the 397 00:21:55,440 --> 00:21:59,280 Speaker 1: reality that retail investors have suffered significant losses in light 398 00:21:59,320 --> 00:22:01,800 Speaker 1: of the onset of the crypto winner. Something else ide 399 00:22:01,840 --> 00:22:05,000 Speaker 1: share is um If we coupled this thinking with the 400 00:22:05,080 --> 00:22:08,720 Speaker 1: Bank of New York's announcement yesterday, this is Alexander Hamilton's bank, 401 00:22:09,200 --> 00:22:11,440 Speaker 1: founded as one of the oldest in the history of 402 00:22:11,480 --> 00:22:14,720 Speaker 1: our nation, now acknowledging that it will on its platform 403 00:22:14,880 --> 00:22:19,960 Speaker 1: service not only conventional financial products but cryptocurrencies, suggesting and 404 00:22:20,000 --> 00:22:22,679 Speaker 1: signaling that in the near and not so distant future, 405 00:22:23,280 --> 00:22:25,800 Speaker 1: institutional investors will be investing in this space as well. 406 00:22:25,960 --> 00:22:28,520 Speaker 1: What's good about this, folks, is they kept from Commissioner 407 00:22:28,600 --> 00:22:31,600 Speaker 1: Johnson my thoughts on bitcoin and we're not going there 408 00:22:31,680 --> 00:22:33,760 Speaker 1: right now. There's a guy used to work at JP 409 00:22:33,920 --> 00:22:36,320 Speaker 1: Morgan and there's this guy up on the one floor 410 00:22:36,640 --> 00:22:40,840 Speaker 1: named Diamond who's going both ways on bitcoin. He's saying, 411 00:22:40,960 --> 00:22:43,959 Speaker 1: this is a fraud and excuse me, Jamie, but something 412 00:22:44,000 --> 00:22:46,080 Speaker 1: like that. And the other thing is we need to 413 00:22:46,160 --> 00:22:48,760 Speaker 1: learn about this and do about it. How can see 414 00:22:48,760 --> 00:22:53,520 Speaker 1: if TC do better than SEC at helping banks on 415 00:22:54,000 --> 00:22:56,800 Speaker 1: this is a fraud versus This is what we need 416 00:22:56,840 --> 00:22:58,760 Speaker 1: to do to move forward. Let me explain what the 417 00:22:58,800 --> 00:23:02,719 Speaker 1: CFTC is already doing in our remit. We are enforcing 418 00:23:03,000 --> 00:23:06,840 Speaker 1: to the fullest extent of our authority to ensure against fraud, 419 00:23:07,200 --> 00:23:11,080 Speaker 1: market manipulation, any types of abuse to retail customers who 420 00:23:11,160 --> 00:23:13,959 Speaker 1: are heavily engaged as I mentioned in this market. So 421 00:23:14,000 --> 00:23:17,359 Speaker 1: that includes first of their kind lawsuits for pump and 422 00:23:17,440 --> 00:23:20,200 Speaker 1: dump schemes. Over the last several months, first of their 423 00:23:20,280 --> 00:23:25,680 Speaker 1: kind uh UM bitcoin or cryptocurrency Asset management fund uh 424 00:23:25,760 --> 00:23:29,720 Speaker 1: scams against retail investors, and very very recently a first 425 00:23:29,720 --> 00:23:34,080 Speaker 1: of its kind that suit against a deep precentralized autonomus 426 00:23:34,080 --> 00:23:37,600 Speaker 1: going to be so important. Yeah, the bitcoin sixty down 427 00:23:37,680 --> 00:23:42,360 Speaker 1: to twenty thousand is well the little guy, and I've 428 00:23:42,359 --> 00:23:47,080 Speaker 1: seen this. Folks generational. They fervently believe in bitcoin. Are 429 00:23:47,119 --> 00:23:50,920 Speaker 1: they believing in a derivative instrument the province of the CFTC? 430 00:23:51,600 --> 00:23:56,240 Speaker 1: Are they believing maybe in a financial asset under SEC 431 00:23:56,480 --> 00:23:59,440 Speaker 1: thirty four and thirty six? I think is that an 432 00:23:59,520 --> 00:24:05,080 Speaker 1: SEC province thing or is it a derivative thing of CFTC. 433 00:24:05,359 --> 00:24:08,080 Speaker 1: Your question about whether or not the Securities Act section 434 00:24:08,200 --> 00:24:12,880 Speaker 1: to a one definition of a security can drop Let's 435 00:24:12,920 --> 00:24:18,240 Speaker 1: continue a section. So essentially, what we're asking is what 436 00:24:18,400 --> 00:24:21,280 Speaker 1: qualifies as a security? And in fact, there are two 437 00:24:21,520 --> 00:24:25,359 Speaker 1: bipartisan bills currently pending in Congress that are working diligently. 438 00:24:26,040 --> 00:24:29,320 Speaker 1: Senate Staffer is working diligently to capture an answer to 439 00:24:29,359 --> 00:24:32,480 Speaker 1: this question. It's a wonderful question that's rich and reflective 440 00:24:32,480 --> 00:24:34,960 Speaker 1: of the history of financial markets regulation in our nation. 441 00:24:36,280 --> 00:24:38,840 Speaker 1: Why can't you two get interrupt? Why can't you two 442 00:24:38,920 --> 00:24:44,000 Speaker 1: get along? Why can't the SEC and the CFTC both 443 00:24:44,480 --> 00:24:50,520 Speaker 1: work on this which I dubious thing sixty. I'm going 444 00:24:50,560 --> 00:24:52,639 Speaker 1: to say we better get along for the sake of 445 00:24:52,640 --> 00:24:55,280 Speaker 1: those investors that I referenced earlier. There is a path, 446 00:24:55,400 --> 00:25:00,119 Speaker 1: and we've walked that path before. We recently, I I 447 00:25:00,160 --> 00:25:02,479 Speaker 1: have had the great opportunity to engage with his office, 448 00:25:02,520 --> 00:25:05,320 Speaker 1: with him, with other commissioners at the SEC. I think 449 00:25:05,359 --> 00:25:07,760 Speaker 1: we are all in agreement and on one accord that 450 00:25:07,800 --> 00:25:11,440 Speaker 1: we want to protect market integrity and protect the customers 451 00:25:11,480 --> 00:25:16,920 Speaker 1: who are engaged in invest twenty people so typical as CFTC. 452 00:25:17,240 --> 00:25:21,760 Speaker 1: And someone your Honora said, don't ask her about the politicians, 453 00:25:21,800 --> 00:25:24,520 Speaker 1: So let's talk about the policies they in the back 454 00:25:24,600 --> 00:25:28,280 Speaker 1: seat of all the rich guys doing bitcoin, these gazillions. 455 00:25:28,560 --> 00:25:30,840 Speaker 1: They used to have forty gazillion dollars and now they 456 00:25:30,880 --> 00:25:35,960 Speaker 1: have eight gazillion dollars. The eight gazillionaires that are doing bitcoin, 457 00:25:36,080 --> 00:25:38,760 Speaker 1: are they buying off the American politicians? I can only 458 00:25:38,800 --> 00:25:40,600 Speaker 1: tell you what I know, which is Chairwoman of the 459 00:25:40,600 --> 00:25:45,879 Speaker 1: Senate Ad Committee, Debbie samin Ow. I'm a native Michigander, 460 00:25:46,000 --> 00:25:49,560 Speaker 1: so we are neighbors. In many respects. I believe that 461 00:25:49,600 --> 00:25:52,199 Speaker 1: she is deeply engaged in expanding the remit of the 462 00:25:52,320 --> 00:25:56,479 Speaker 1: CFTC over spot market transactions for the purpose of ensuring 463 00:25:56,480 --> 00:25:59,280 Speaker 1: that a regulatory gap that exists right now is closed. 464 00:25:59,280 --> 00:26:03,240 Speaker 1: I got thirty seconds. What happens to the retail investors 465 00:26:03,240 --> 00:26:08,119 Speaker 1: at bitcoin breaks support nineteen thousand and goes down to 466 00:26:08,240 --> 00:26:11,359 Speaker 1: sixteen or fifteen or twelve? What's the ramifications of that? 467 00:26:11,480 --> 00:26:15,200 Speaker 1: The ramifications are significant because those investors are the most critical, 468 00:26:15,240 --> 00:26:17,600 Speaker 1: in my humble opinion, in our markets, and our most 469 00:26:17,720 --> 00:26:21,160 Speaker 1: sacred task is to ensure the protection of those investors 470 00:26:21,200 --> 00:26:24,360 Speaker 1: and the integrity of our markets. So I am diligently 471 00:26:24,359 --> 00:26:28,359 Speaker 1: committed whatever we have to do. Commissioner think I'm exhausted, Lisa, Commissioner, 472 00:26:28,440 --> 00:26:32,240 Speaker 1: Thank you so much. Kristen Johnson of the CCC. There 473 00:26:32,240 --> 00:26:39,920 Speaker 1: on section twelve, item to A one one Lisa Tom 474 00:26:40,160 --> 00:26:43,440 Speaker 1: wonderful interview, Thank you so much, and great recitation there 475 00:26:43,480 --> 00:26:46,679 Speaker 1: of the different provisions and the different subsets. This is 476 00:26:46,680 --> 00:26:50,680 Speaker 1: the Bloomberg Surveillance Podcast. Thanks for listening. Join us live 477 00:26:50,840 --> 00:26:54,600 Speaker 1: weekdays from seven to ten am Eastern on Bloomberg Radio 478 00:26:54,840 --> 00:26:58,480 Speaker 1: and on Bloomberg Television. Each day from six to nine 479 00:26:58,480 --> 00:27:02,920 Speaker 1: am for in type from the best in economics, finance, investment, 480 00:27:03,040 --> 00:27:08,080 Speaker 1: and international relations. And subscribe to the Surveillance podcast on 481 00:27:08,160 --> 00:27:11,960 Speaker 1: Apple podcast, SoundCloud, Bloomberg dot com, and of course, on 482 00:27:12,080 --> 00:27:16,240 Speaker 1: the terminal. I'm Tom Keene, and this is Bloomberg