I think its true that in general private sector firms really do care about reputational risk, dont want to deal with people that are involved with illicit finance. I think its also true that the work of tfi over this last set of years and sort of putting up the mirror and reminding people of this proposition and reminding them that theyre watching and that there are consequences to people who are insufficiently attentive to this set of things has been critically important in both reminding folks and sort of heightening their sensitivities because its not every private sector actor, certainly not globally. Certainly not in geographies, you know, near and far, that have over time given this sufficient attention. I think its the combination of it being in the economic interest of private sector entities and the work that tfi, david, and stewart, their colleagues, and others in the u. S. Government have done to help keep that kind of in the top of consciousness consistently that has been the sort of twin pieces of getting the advantage from the private sector in this regime that stewart i think spoke very effectively about earlier today. Let me take from that point and ask the question, and its a fair one mplgt fair one. I get it outside when i go out and do talks and things. How can we talk about the importance of the private sector the integrity of the system, when you see so many examples of banks failing and getting hit with enormous fines . Are we talking about two different narratives . How do you square that circle or is it part of the same story . Well, first of all, i think private sector have lots of different objectives and lots of competing goals, so although they want to be compliant, they also want to, you know, make good returns for their shareholders, and i think sometimes those things tend to be i think there can be a tension between the senior most officials at some of the entities who have kind of a broader view, perhaps a greater capability of being able to see all these different dimensions and coming down in a place that we would think is integrity laden and folks, you know, within very farflung, very decentralized, very complicated institutions, and i think, you know, compliance with these regimes doesnt come with the snap of a finger. Ruben talks about 100 page manual, but, you know, in some of the institutions they are doing business in 150 or 180 or, you know, almost 200 different geographies. Its a complicated business. I think companies have gotten themselves on the wrong side of this regime with greater frequency than we would like. I think thats part of, you know, tfi does prophylaxis. Lays out the rules, hopefully with a lot of clarity so people can understand them and follow them effectively. They do monitoring, and then they do expost enforcement when thats appropriate. I think its all those pieces that together make an effective regime in this area because, you know, some people get it right at the beginning. Some people want to get it right but dont, and then, you know, the world is full of bad actors in all kinds of places, and some people have other objectives in mind. Ruben, can you feed off of that, and also maybe give folks a sense of where you have seen an example or two of the private sector capitalists around these issues, around the issues of compliance and what that balance looks like . I dont think theres any between tone at the top and what gets permeated throughout the organization. In any big Global Financial institution, you are talking tens of thousands of people at many of the large Banking Institutions around the world. Theres no substitute for setting the right tone at the top. Ethics, training, procedures, et cetera. That said, there are going to be mistakes. There are going to be commercial judgments made that look reasonable at the time, that could be mistakes. Its ultimately balancing. One of the important aspects between the relationship of the private sector and governmental institutions involving creating these rules, implementing and entoe enforcing them is a sufficient degree of trust, transparency and communication. They are always going to be somebody mine once said that no matter what you do in any large organization, the leadership is probably always going to be someone who is making a bad decision somewhere that could come back to hurt the institution institutionally, but there has to be essential trust where in legitimate circumstances, there are incentives to report, there are incentives to remediate, and the punishment is calibrated to fit the crime, as it were. There are also situations where there is a legitimate clash of strongly felt and important policy interests. One of the case studies in this area. Money transfers in somalia, where you have two purposes that seem to be irreconcilable for the banks at issue. One is cracking down on any risk of terrorist financing flows to illicit actors, and i think its fair to say that history has shown that there are probably one or two of those hanging around in somalia and various places. And the other is the important crucial humanitarian concern that remittance flows make it to disaffected, impoverished populations of innocent people on somalia who rely heavily on flows from friends, relatives, and others who are working out of the country. The Ngo Community raises they their hands and many politicians say, write a second, you cant 99 of these people are total innocents. You cant just cut it off. Its a great example of kind of if only it were academic. Its the real world of the extreme case where you get direct policy trade, two laudable, important but conflicting objectives. I think its a critical point and a question that goes along with some of the themes we heard earlier in the day about the potential over use of these tools and perhaps even the burdens on the private sector. Feeding off what your example was, ruben, have we do you think weve reached a Tipping Point perhaps where were asking the private sector to do too much and where the derisking thats happening in some of the institutions are affecting, as you said, some of the Public Policy principals of Financial Inclusion, which may be in direct opposition to the tools of the financial exclusion, which is the sort of stock and trade of tfi. What do you think about that . I think this is a subject that bears lots of continued scrutiny. Its hard to answer these questions at a conceptual level. I dont view the sort of the regulatory imperatives with respect to Money Laundering or lots of others that the u. S. Government in other guises imposes on the private sector, in particular the Financial Sector as being kind of inhermitly and, you know, in conflict with a set of policy objectives like Financial Inclusion. So, for example, in some of the circumstances and, you know, without the specific reference to the somalia example that ruben gave, there will be some space open for some Financial Institution that, you know, has the right Compliance Regime and observes the right integrity principles to have an economic incentive to go fill that space. In some cases in somalia it might be this case. That wont be true. There isnt enough financial incentive to go down that in the private sector. Then you seed another set of possibilities. Whether thats governments or nogst ngos or a set of things. In no case does it strike me as its an impossible thing to think that you can provide Financial Assistance to these populations. Even those that have lots of complexities and that are that will allow people to have access to Financial Services in some fashion or another, allow them to live their lives and do things that we think are important in other respects, but also make sure that the bad guys arent taking advantage of access to a Financial System that we think has other problems associated. I kind of resist the idea of it being zero summed, but i do acknowledge that in any one of these particular contexts, the exact solution, the way to sort of figure out the rubiks cube of that circumstance can be difficult. I think you have to keep in mind that theres been a substantial evolution of tfi since 9 11 really. The first actions immediately after 9 11 and the tfi initiative. Then it gets a little bit some of the initiatives get conflated with doddfrank and additional regulatory measures taken to shore up, protect the Global Financial system post the financial crisis. Going through the evolutionary phase, and the devil is in the details. Neil is absolutely right here. Its hard to talk about this conceptually. We have to take stock of the whole of a lot of rules, regulations, that are out there, and look at given the benefit of experience, whats still a work in progress, et cetera. Of whats working, whats not, what are the cost and benefits, et cetera. Another example, announcements its going to cut off activity to socalled politically exposed persons. Whats that all about . And the question from a policy standpoint, is it better to have them do that or work with the guys that are bad actors in ways that have some transparency visibility. Theres a lot of theres a lot of actions that Financial Institutions are taking in response to various regulatory measures that i think need to be were sort of at that second wave. Its like michelle talked about earlier on the intel bill where you have to step back away from the furor of media, lobbyists, all that and sort of say, okay, what makes sense here . What doesnt . Where are the tradeoffs . I would say two of the things on your Tipping Point question, one that i think my perspective is an important thing about. One is that theres an argument out there that the more regulatory focus is placed on the big Financial Institutions. The likelier it is that whatever bad activity is going to migrate to other places, its a little like chasing the spotted monkey around the table and to some extent thats absolutely true. Meaning, you know, bad actors will find the sort of weakest places in the system and presumably try to exploit it. To me thats not an argument that were over doing it on the big Financial Institutions. Thats an argument for figuring out, and its not necessarily easy. Tfi has been working at it get better and better at it, but i think thats going to be an important part of their just to use dennis metaphors, the next ten years to try to figure out how to bring some essentially equivalent set of regimes to other parts of the Financial Sector that are smaller, less formal, less interconnected for which, you know, having the capacity to say, you know, dollar clearing at the new york fed is sort of the key lever and so thats going to be a complicated business. The second something, i spent a little bit of time in the government on Financial Regulation more generally. You know, you hear globally this is too much and its going to put u. S. Firms as a disadvantage relative to their competitors elsewhere. I think my natural reaction to that and the reaction that tfi has brought and the treasury has brought more generally is thats not the right way to think about it. They should come the rest of the world should come up to our standard, and tfi and the treasury in other domains has spent an awful lot of elbow grease trying to do just that and being quite successful at doing just that, rather than dumbing down our own regime in a way that makes the whole thing less robust, and it connects back, of course, to where you started, juan, which is that its not for academic reasons that were putting all these Different Things in place. Its got a Huge National security component and a huge component that relates to the integrity and proper functioning of Financial Markets in the u. S. And therefore globally. Let me take you back off that and make ask a couple questions related to challenges and limitations. These tools has animated the ability to cooperate. Are we seeing, though, in the enforcement environment, especially with major foreign banks getting hit with multibilliondollar fines, are we seeing a moment where some of these measures are beginning to complicate diplomacy or to change dynamics in a way that we havent seen in the last ten years . I guess it depends on what you mean. Just to take stuarts actual example, then ill broaden it out to your question, juan. There ought to be more cooperation in the area of data sharing as between the government and private sector entities, and i think thats the right objective. Its laud able, its important and theres a lot of potential benefit from it. On the other hand, its a complicated business. The government operates in a broadly classified world, or at least tfi does. That creates a lot of challenges for the government in thinking about how and what to share with the private sector. And adversely, the private sector thinks of all their data in large number as a proprietary set of things. Dont want the government poking around in it. Dont want the possibility that some committee of congress is going to get ahold of it, quite keen to keep it close to their vests. So youve got these two broad dynamics that work in opposition to stuarts aspiration, which doesnt mean we shouldnt continue to focus on it, but its hard. I think on the broader side of things about enforcement measures the following. In our country, anyway, Law Enforcement doesnt sting and it does it on its own. I dont know if thats good or bad, but the basic judgments about prosecution and enforcing the criminal laws in the United States are made by Law Enforcement officials and not by the rest of the government. I think that, you know, its a good thing that when Financial Institutions or anyone else, for that matter, do things that are in violation of our law or someone elses law there be consequences. I dont think thats very complicated. I think to some extent what we see now is a heightened appetite or an increased willingness for Law Enforcement officials both at the federal level and the state level to do things that heretofore they have some skittishness about, particularly in the midst of and immediate aftermath of the financial crisis, but i think their appetite for this sort of thing is obviously ticked up. I think for all these institutions, it remains the case you know, in some sense rubin is very situated, and stuart, who sits in one of the worlds biggest Financial Systems, i think its absolutely the case that the u. S. Is the irreducible, unavoidable place where one needs to do business, because our economy is the biggest and most important and, you know, its both a reason why these firms need to get their act together more than ever before. And i think it also has a certain, you know, deterrent effect to being a little loose at the joints. And ultimately theyre going to have to think of it if they dont think of it that way, theyll have to think of it as the cost of doing business, which is not the preferred way, but none of them will leave the u. S. Economy, as far as my eye can see. Its unthinkable. Too much opportunity here, too important both from an Economic Perspective and from a Financial Markets perspective. So although its true that, you know, a series of Law Enforcement actions have gotten a lot of headlines and mean certain things to the people involved, it really hasnt changed the basic realities of how and why and whether theyll engage in the u. S. Economy and the u. S. Financial markets. Rubin, before you go, on this question of diplomacy complication or not, i do want to get to the conversation about what this means for the role of the dollar, et cetera. I wanted to follow up on your point about Law Enforcement. Are we at a point where the department of justice or state authorities, regulators or Law Enforcement, are now driving the systemic debate . In some ways, are the next ten years going to be a discussion about the role of Law Enforcement and regulators, and should there be more of a hand, for example, from treasury in thinking through the systemic impacts of Enforcement Actions . The church thinks a lot about the systemic applications of everything. Thats kind of what theyre paid to do in large measure. I think in our country again, Law Enforcement decisions, decisions whether to prosecute on a continuous basis, is given over to the federal department of justice and a range of state Law Enforcement entities. I think thats a good thing. I think the long history of this in the u. S. Is that we dont want our judgments about criminal prosecution to be affected by politics or by other kinds of considerations. Hopefully those folks are thinking about systemic implications of their Law Enforcement activity. They ought to be thinking about charging decisions and whether to go after this target or that target, they ought to be taking kind of a whole range of things. But i dont think it changes the basic dynamic. It has always been the case that the Justice Department at the federal level has been in charge of criminal enforcement. And the regulators and in the case of sanctions and Money Laundering, theyve been at the core of Financial Institutions regulators. The civil side enforcement and the actual, you know, carrying out of the administration of these sanctions regimes, i dont think that dynamic changes, and i can assure you that Financial Institution xyz doesnt want to get on the wrong side of ofact, and thats not liable to change just because the Justice Department is doing some of these big federal prosecutions where theyre insisting on a guilty plea or theyre trying to reach settlements that include fines that are big. Do you want to comment on this . Again, from the perspective of someone who is newspaper smart but on what government is doing or not doing or Law Enforcement or other standpoint, but who is dealing with some of these issues day in and day out in my private sector capacity, it is unimaginable in the private Sector Community that people who normally evade sanctions, things like that, obviously appropriate recompense is due or whatever is appropriate. I think internationally, there is probably some lack of understanding and perhaps confusion, and it bears reminding some of our friends and allies that we do have a federal system. State and local governments have their own laws and judicial practices. Within our federal government we have a range of a Judicial Branch from the executive branch. That said, my sense is, depending on how a lot of this plays out, we dont want to be in a position where we have the whole country government among some of the institutions that are affected thinking, relenting in their commitment, their commitments taken post 9 11 as part of the global postterror Financial Initiative and post financial crisis to really Work Together, knit up the seams, look for vulnerabilities in the Financial System. Well have to work extra hard from a diplomatic standpoint to keep everybody on side. Because going back to things like sanctions application and the Russia Ukraine situation, whatever, south sudan, whatever the next thing might be, our sanctions can be effective in a lot of ways, but theyre most effective the bigger your coalition of relevant economic powers are. So this is the inevitable push and tug and pull of the interagencys prophecys intergovernmental working groups but also across border. Very important that this quiet behindthescenes in an economic, diplomatic work that we need to be redoubling our efforts to making sure our counterparts understand where we work, they understand what were doing, and that those kinds of things arent going to get in the way of a larger objective from ensuring that we never have another 2008, we shore up the Global Financial system and we continue to Work Together on these measures to deter illicit flow of terrorist acts, et cetera. Let me quickly ask both of you the question of russia and whether or not how the financial measure sanctions of russia demonstrate there are inherent limits to these kind of tools, the ability to unplug targets from the Global Financial commercial order. Does russia prove that if an economy is too big or too integrated, there are inherent limits to how these tools can work . Or is that a false conclusion . I dont think thats the way i would put it, meaning the administration has made a judgment to try to calibrate their sanctions regime relative to what the russian government or russian president has decided he wants to do in ukraine, originally in crimea, and now the rest of ukraine. And, you know, i think jack had the statistics this morning first thing about sort of economic and financial implications of what sanctions heretofore has created, and the administration has been clear. I think sort of exceedingly clear that if putin does things that are more aggressive and additionally counter the international law, theyll ratchet that up. And, you know, i think its been a little bit complicated, obviously, in the european dimension. I think the europeans are understandably a little more skittish about this stuff given their Energy Dependencies and so forth. People wanted to know right away, why wasnt the russian sanctions regime like the iran sanctions regime . The different subjectives and different circumstances, and i think this is a good example of how they can be additive to kind of a multifaceted set of tools. No question its gotten the russians attention, no question its had real effects with respect to their Financial Market and economy. And also clear that there is sort of the specter of more to come should whatever putin does in the next set of terms sort of make that appropriate. Rubin, care to comment . I have a lot, but my own view is that president putin is paying a longterm losing hand in terms of just the hardcore economics of his economy if hes moving in a direction of being increasingly isolated by the rest of the world economy. In the short term, watching the measures that treasury and the u. S. Government has taken with respect to sanctioning in particular individuals, its calibrated, people seem to be moving away. We want to avoid tit for tat. The message is getting across to not just those affected immediately but to other elites who surround putin, who kind of get the message that, gosh, i might be in those crosshairs at some point, too, and counterparts to those elites may say, well, gee, should i really be dealing with mr. X or mr. Y who has a long standing association with the regime . Let me shift to a systemic question and then ill come back to the dollar that you alluded to. As you said, the attractiveness of the american economy, the dollar itself all plays into the u. S. hand and tsis hand, the ability to isolate these tools using rogue actors. Does there come a point, though, with the rise of other currencies to include even digital currencies, that you begin to threaten the primacy of the dollar by overusing or overburdening these tools internationally. Is there the potential that overburdening and overuse actually accelerates the deamericanization of the global economy, starting with the dollar . I think the first point is that the fact that the u. S. Dollars, the global reserve currency, is an enormous asset to the United States, an unbelievably important asset. You also said, juan, and as others have said earlier today, a critically important aspect of the work of tfi. It allows tfi to basically make the point to whomever. Do you want to deal with the United States or do you want to deal with xyz and have that have meaningful effect . I think that because its such an important asset to the United States, we always ought to be spending a lot of time thinking about what is it that has made the u. S. Dollar the world currency and how is it we can continue to make that the case . I would say this. In broad measure, the reason the dollar is the worlds reserve currency is because we have the deepest, most liquid Financial Markets, we have an economy that is huge and sort of centrally consequential to the global economy, we have a country in which the rule of law is overwhelmingly the reality and where sanctity of contract are observed. There are huge macroreasons as to why the dollar has this kind of position of esteem. And my own view is that although some of these things like Financial Regulation and sanction regimes and antiMoney Laundering efforts may have at the margin something to say about the relative attractiveness of the dollar as compared to other things, its also true that a lot of these regimes are pretty multilateral, so in those circumstances, it doesnt really create competitive advantages to the dollar. I would say more importantly, the basic dimensions of why the dollar is the worlds reserve currency, at least as far as my eye can see, are unlikely to go away, and in particular, since its a comparative judgment, because Something Else would have to replace the dollar as the worlds reserve currency, as far as my eye can see, i couldnt see Something Else being a meaningful competitor. You know, not what i would call short and intermediate time horizons. You think about the alternatives, the euro, as someone said earlier, steve hadley or tom donovan, it wasnt 18 months ago we were worried about whether the euro was done. I think lots of questions about contract sanctity and other kinds of things, obviously currency is doing well relative to its history and certainly to chinas economy is increasingly important and so forth. You know, the non fiat currencies, the digital currencies, there is a lot behind them in some places, but it strikes me hard to imagine them becoming the reserve currency in the world in time frames that are likely to be relevant to this conversation. So having said that, we should constantly be worrying about this and vigilant as you would with any asset that is of enormous value. But whether we add three more sanctions programs or tighten up four other sanctions programs or, you know, make it clear to europe that we really think we need to turn the next thing of the dial with respect to ukraine and russia doesnt strike me as having any real implication in the here and now with respect to the centrality of the dollar. Rubin, could you comment on this . Especially given your current role . I assure you in the intermediate term and the near future, the dollar will be the worlds major currency and its earned that right as a result of the strike and the solidity of the u. S. Economy and the importance of rural law here. It bears repeating that i spent my state department incarnation studying the rule of law, preaching the gospel of property rights, sanctity of contracts, integritiry of the judicial system. This goes back to the whole policy area. Anything the treasury is doing to maintain the work of the resiliency, spur economic growth, immigration, education, all that kind of stuff is absolutely critical on an ongoing basis to assure that we continue to earn that stature. But around the margins, on the diplomatic front and dealing with our counterparties, any given thing, its a classic thing. You can please some of the people some of the time but not all the people all the time. There will be tradeoffs. But we have to be mindful of our stature which some people admire, others envy, and we have to be respectful of that and treat counterparties, you know, fairly, accordingly if we want to bring them and keep them on our side, bring them along on our shared policy objectives and initiatives. I totally agree with everything you just said, and maybe just to clean up after myself, i dont think its gained anywhere. Its not in the laws of nature that the dollar is going to be the reserve currency of the world, so it certainly does require over the long horizon to make sure things like labor flexibility, innovation, immigration, deep liquid capital markets, you know, human capital, all these things which are in some sense at the bedrock of why our economy is so strong and why its fundamentally the envy of every other economy on the planet need to be tended to, and if one doesnt tend to them over long periods of time, you know, this thing could change. So i think thats i think i completely agree with him on that. Let me ask this question in terms of the main american competitor on the rising power of china economically. Even if the rmv doesnt outpace the dollars as currency of the world, does the influence of Chinese Capital begin to affect the rules of the road internationally and begin to sort of affect the ability of the Treasury Department of the u. S. Government to implement the kinds of financial integrity measures it wants to do around the world . Does the Chinese Market itself impact what the u. S. Can do . I think that this is something that should be a Financial Focus to tfi and the government now and in the future. The chinese economy is very important globally. The Financial Sector, by the way, needs a lot of reform in china. It doesnt really respond to market signals particularly currently, so thats a problem for the chinese leadership, which theyve acknowledged and are very much focused on. I dont think i think there are plenty of reasons for the u. S. To continue its conversations both bilaterally and multilaterally with the chinese about this set of objectives, but i dont think of the rise of the chinese economy, the rise of china more generally, as something that is for the moment and for the sort of foreseeable term, being a real constraint or being fundamentally anathetical with what the u. S. Government is trying to achieve in these areas. Rubin . I would agree with neil on that. I think you have to separate and im now worried about the rmv kind of taking over as a reserve currency any time soon. When you get into the chinese Financial System, it is really at its stages. Theres not an Indigenous Capital in the sense that we know it, that the Global Financial community relies on it when dealing with dollar flows or yen flows or the flows of major currencies or the currencies from financial instruments. From a bilateral standpoint in dealing with the chinese, theyre one of the more important ones being the strategic and economic dialogue where u. S. Government engages these on one end engages in these Financial MarketDevelopment Issues in a very supportive way to help the chinese help themselves build a more stronger, more marketdriven Financial System. On the other side where i do worry about, and all of us should be concerned about some chinese activity, is what we heard earlier today in the Intelligence Panel that cyber theft is unacceptable. Thats not just in the Global Financial community but the Global Economic community. Its in nobodys interest that the chinese be allowed to get away with that, including other Chinese Companies in that china wants to grow and develop indigenously. Do you see that as sort of a chinese warfare in a sense, and do you see the potential that china could learn the lessons from the u. S. Treasury in some ways and develop its own version of tfi and own set of sanctions and tools . There is already a debate internally within china about unilateral sanctions and what that looks like. There has been talk about similar tools that the treasury has developed. Do you worry ant the that china may develop similar tools . Tools per se, im not so sure, because they dont necessarily have the imme february implementation mechanisms through the Financial Sector as well developed as ours to have the recquisite transmission effects. But there is absolutely no doubt, just staying current on the news, that china has figured out ways to use their to exert their economic strength in areas of their choosing where it advances their own interests. Its no coincidence that if you go to some countries in africa, you see a lot of the buildings you know, the elevators are chinese made and the buildings are chinese made. The work forces are a lot of chinese workers. Thats not necessarily a good thing or a bad thing, but the chinese are really out forwardleaning in shoring up their interests or areas where they think they have vulnerabilities using their economic access. Neil . I think i agree with all that. I think gina harmon talked about asymmetric warfare. This isnt sanctions per se but its adjacent to that. Theres no question that our economy generally, our infrastructure but also our Financial Sector, is hugely vulnerable to much of this stuff, whether its from china or from other state actors or, for that matter, from a set of nonstate actors. And given how much of the sort of the plumbing and the Technology Related to the Financial Sector is in the u. S. And the extent to which the u. S. Is comparatively dependent on and good at and successful at the financial world, its an important vulnerability. I dont presume to be able to say whats on the mind of the chinese government, whether its the pla or more senior leadership, but obviously Milling Around in this set of things is troubling. I was just reminded, stuart talked about his trip to libya. This is totally off topic, but stuart at least got to go to libya when there was a security environment. I got to go to libya when all hell was breaking loose. Me, too, by the way. Me, too. Let me ask one more question and well open it up to the audience. Going back to the private sector and the totality of American Economic and power influence. One way of thinking about tfi is its developed and harnessed the tools to exclude actors from the Financial System, or at least rogue actors elicit capital to National Security effect or impact. Have we done enough as the United States to think holistically about how we use powers of inclusion for powers of strategy . That is to say, we use the sticks quite well. Do we use the carrots in the commensurate and complimentary way . I think there are different parts of the u. S. Government that are spending time focusing on this, whether its the state department or a. I. D. Or treasury or others. Lots of technologybased solutions, lots of other ways in which people can be brought into the worlds economy and the worlds Financial System, allow them to better realize their own aspirations in ways that to some extent, you know, are meant to obviate and have the opportunity to better meet their aspirations. I think also these things, to answer your question, sort of tfi goals and financial goals are in tension. If you think about Inclusion Solutions that are based on, you know, cards of some sort or telephony of some sort or one or the other kind of technology solution, i think there is a pretty good probability that those things bring Financial Inclusion and also allow tfi to do its job in a much better, more systematic, more effective way, and in that sense, theyre not just an intention, theyre actually quite sympatico and symbiotic. Take afghanistan and plenty of other places in the world now, various Payment Service providers are giving individuals cards on which they can get their whatever payment it is. If youre a government official, your salary payment, if youre a citizen your social Welfare Benefits or what have you in ways that are more secure, quite effective at seclusion efforts that they havent had before. And a piece of this give folks like david and danny and others an opportunity to have a pretty keen sense of whats going on or what they want not going on. Rubin . I think on the broadest plane, i would put initiatives such as the transpacific economic partnership, the efforts to raise a transatlantic trade and Service Trade agreement, these are all part of bringing the Global Financial system, the Global Economic system closer together in a way that the areas of common interest trump those areas of disagreement and encourage people to be part of the system and to comply with accepted rules, regulations, norms, et cetera. So its the broadest level and then you get to the individual programs that usaid has, the state department. A lot of this is technology driven, so the work is ongoing. Its the day in, day out work of a lot of diplomats and treasury professionals around the world with their colleagues and likeminded governments and development institutions. Fantastic. All right, lets open it up for questions. I would ask you to raise your hand, wait for the mic, stand, identify yourself and then ask a question. Lets go right here in the middle to this young lady in the back. This is annie from reuters. Thank you for your discussion about some of the banking set e settlement issues. I dont think with some of the big finds weve seen recently, its not really a question of big banks withdrawing from the u. S. Financial system, but do you think this could have any other negative repercussions, for example, voluntary disclosure, which is so important for ofact to address future sanction violations or elaborate a bit more on the diplomatic repercussions. Thank you. I think if i were running one of these big firms or one of these other firms that have been watching their competitors, i think its better to get regime right in the first place, better to be more transparent more quickly, and i think that, you know, the other way around is just deepening the hole. So i think that thats all thats why i say that. On the diplomacy, you know, i think these are complicated things. Governments across the world want, understandably, to make sure their firms, their companies arent being treated, you know, comparatively worse than others, that there isnt just sort of a favoring of u. S. Firms relative to foreign competitors and so forth. I think they have every right to ask those questions, and i think the u. S. Government, you know, or in this case Law Enforcement officials should be providing answers. I think if you look, by the way, at the range of settlements its not my line of work so i should probably avoid this but if you look at the range of settlements, there have been a lot of u. S. Firms that have had pretty unhappy resolutions in a range of ways and theyre a set of foreign firms, and i think whats important is that it be the case and the perception of the case that what matters is the facts, and if you did something to cross the line that the response by the Law Enforcement ought to be calibrated to what you did and how much of it you did and so forth, and that ought to be the sort of ultimate decision on those kinds of things. But on diplomacy, rubin probably has more different to say. I think from a private sector perspective, when in doubt, selfreport is, i think, the basic mantra going back to the initial s. I. R. S. They came out of the secrecy act post 9 11. I cant comment on whats in the newspapers, i just dont know whats going on in the legal community, but i share neals view that over time these issues will get resolved. From time to time there are some disconnect between the penalties and the crime, but in many cases, what were talking about is remediating in a longstanding pattern of transgressions that really shouldnt happen in the first instance. Its important, though, that people step back and remember and reflect on the overarching principles at stake hear which go back to the origin of tfi and something Everyone Wants to crack down on, which is illicit flows, laundering, human trafficking, et cetera. Question up front here. This gentleman. Yeah, my name is pat maloy. Im a former general counsel of the Senate Banking committee and a great privilege of serving 10 years as a commissioner on the u. S. China commission. And im really glad, juan, that you pressed this issue of the reserve currency. And i agree with neil, all the advantages that we get. One of my concerns, though, is that when you run negative net exports, it detracts from gdp and job growth. And the fact we run 10 trillion of negative net exports, i think, has been made possible by the fact that we have the reserve currency. And that this has permitted us to live a lifestyle were not earning and become the largest debtor nation in the world. Do you guys see that as a problem in the United States and a problem that we ought to address as a matter of some urgency . I think i should add to my list as saying left unattended, there are a set of things that could eat away, chip away at the primacy of the dollar. On that list ought to be longterm fiscal coherence, no doubt about it, and ought to be some version of a recently balanced current account. Now you know, on both those, you can look at the short term where theyre both getting better. If you look at our trade deficits, its contracting at a pretty reasonable rate historically relative to where it had been, and theres a lot of different explanations for that. If you look at the fiscal imbalances, theyve gotten quite a lot better over the last four years meaning theyre just north of Something Like 10 gdp. Theyre on a path to getting 3 to 3. 5 , which is, you know, pretty good. If you look over a longer horizon, that progress is going to start to inflect, its going to get worse, so i think its true that for the longer term of the dollar, policyholders need to grapple some of these big trends, and thats hard. That becomes right away a political question. But i think youre right to point out that those are things that also need tending, certainly more than anything on the immediate horizon. I think we have time for one more question. Lets go to the gentleman in the back. Peter sharp, miter corporation. Weve heard from a number of speakers that one of the great advantages of tfis tools is that they can be calibrated fairly precisely and respond quickly to events. But isnt it a problem for the private sector when things get turned on and turned off rapidly in response to events that are hard to predict. It absolutely can be. It absolutely can be. I think it is important for the government in that context. The government cant control all the exogynous factors that caused them to put those in place in the first place. But i think it is important for tfi, or for that matter, the rest of government in kind of all kinds of other spheres to communicate as much as possible and to do so with as much clarity as it can possibly muster. I think thats an obligation. This piece hasnt gotten that much attention today, but since were talking about the private sector, its hugely important for the government to do as much as it can to bring clarity and precision so that private sector actors on whom, as stuart and others were clear, they depend in the fulfillment of their objectives to give them the best opportunity to do what they need to do and without all this ambiguity. Its good for them not flailing around in uncertainty, which isnt good for the economy. Its good because it helps the tfis programs to optimize and be as successful as they can be. And i think that, you know, my sense is that the government needs to continue to struggle and continue to find new ways to bring that communication and the Clear Communication and that quick communication to bear for all those reasons, both for its own selfinterest and because its good for the private sector and, therefore, good for our economy. And though they work hard at it, i think theres probably room to improve, and i think its a piece of business on which they can and should continue to focus going forward. Rubin . Clarity, precision, and i would add consistency is absolutely critical in dealing with the private sector. Most private Sector Institutions take a targeted sanction against a particular government or group of entities, they have systems, at least large Financial Institutions, and procedures in place and the organizational flexibility to react. Provided, though, its clear as between the private sector actors and government what the rules of the road are and there is a shared, Mutual Understanding of expectations. Well, this has been a fantastic discussion. Help me in thanking neil and rubin for their insights. Thank you. [ applause ] well, thank you to neil, to rubin, to juan for that discussion. That was great. Before closing this symposium, id like to say just a few words. First i want to thank all of our participants, secretary jack lew, white house chief of staff dennis mcdonough, my predecessor, steve hadley, keith alexander, neil woollen and Rubin Jeffrey and also our moderators. The conversation today has been highly entertaining and engaging and also deeply informative. I know i have a lot of action items that ive written down to take care of when i get back to the office. Id also like to thank the sector for Strategic International studies as president and ceo john hammery for hosting this event here in their beautiful facility. Weve had the opportunity today to trace the evolution of terrorism and Financial Intelligence over the past decade and reflect on and sometimes even applaud our accomplishments to know where we have fallen short, and most importantly, to think about where and how tfi can contribute in the years ahead. Our speakers and panelists have helped us better understand how Financial Measures, the mix of targeted financial and economic sanctions programs, financial transparency at home and abroad, collaboration with the Global Private sector all underpinned by Financial Intelligence have become increasingly important tools in the president s Foreign Policy and National Security toolbox. Todays discussion has highlighted the treasurys playing an increasingly central role in projecting u. S. Power in a consequential, albeit, non kinetic fashion and sevens in a broad variety of National Security objectives. It is sometimes said that financial sanctions are a new form of warfare. While that overstates the case, there is no question that real war is decidedly different, and we should never forget that. There is also no mistaking that the tools we have developed and deployed deliver real and meaningful impact. That is, after all, the point. And now, after the past decade, treasurys ability to deliver impact is embedded in our National Security discussions and strategy. So importantly, todays conversation also has illuminated some of the key challenges that we will face in the future as we continue to employ and increasingly rely upon Financial Measures to secure our Financial Security goals. I would like to take a moment to note a few challenges i see as i look at the horizon of the next few months and years, things we can address at tfi at 20. First is the challenge imposed by the changing nature of tariff financing. In part due to the success of squeezing tariffs out of the Financial Sector and in part due to the increasingly diffuse nature of the enterprise, we have seen a decline in the traditional donor model of terrorist groups, and an increase in financing to raise funds. Captions Copyright National cable satellite corp. 2008 captioning performed by vitac