Next, treasury secretary jack lew. With reporters on the domestic and global economies and his Upcoming Trip to the g7 summit. The event was hosted by the Washington Bureau of the Christian Science monitor. Its 50 minutes. Tv reporter from boston. Good to see you. Just retired this year. [ room noise ] youre going to be right here, sir. Were going to start right on time this morning. Im dave cook from the monitor. Thanks for coming. Our guest is treasury secretary jacob lew. His last visit was in july 2015 and we appreciate his coming back before his trip next week to anchorage and then the g7 Foreign Ministers meeting in japan. Our guest flirted with a journalism career while he was editor of the Forest Hills High School beacon. He evidently thought better of it and while in college caught the washington bug, working for representative bella abzug and joe moakley, earned a bachelor degree at hafshtd and a law degree at jpmorgantown. Between 79 and 87 he learned politics from a master in his role as Principal Deputy policy adviser to House Speaker tip oneill. As a special assistant to president clinton in 93 and 94 our guest played a key role in helping design americorps. He was later Deputy Director and then director of omb between 98 and 2001 when he led the clinton budget team. The United States government posted a surplus for three consecutive years. He was chief operating officer of New York University and then chief operating officer for two different citigroup business units. Before joining the Obama Administration in 2009. Deputy secretary of state for management and resources. He became omb director in november 2010. White house chief of staff in january 2012. And treasury secretary in february of 2013. Thus ended the biographical portion of the program. Now on to the riveting mechanical details. As always were on the record here. Police, no live blogging or tweeting. No short no, filing of any kind while the breakfast is under way to give us time to actually listen to what our guest says. The embargo ends when our guest stops speaking. To allow you to file before the market opening, well stop at 9 20. To help you curb that relentless selfie urge well email several pictures of the session to all the reporters here as soon as the breakfast ends. And as regular attendees know if youd like to ask a question please do the traditional thing and send me a subtle nonthreatening signal and ill happily call on as many reporters as we can goat to in the time we have this morning with secretary lew. Were going to start off by offering our guest the opportunity to make some opening comments and then well move to questions around the table. Thanks for doing this, sir. Appreciate it. Thanks for having me this morning. I feel like im 90 years old after hearing that biography. I wanted to touch on two things at the top and then go to questions. Ill start with the domestic and then goat g7. Domestically what i want to talk about is puerto rico. Weve been working very hard to try to address the growing crisis in puerto rico. Its not a crisis of the future. Its a crisis of the present. I was there on monday, and i saw firsthand with some of you what is going on right now for the 3. 5 million americans who live in puerto rico. I mean, there are childrens units where twoweekold babies are waiting for dialysis because has to be ordered cash on delivery with wire transfers on a daily basis to keep supplies in the hospital. Its not a future crisis. Its a current crisis. We saw schools start out in terrible condition where deferred maintenance is raising questions about basic safety. There is a solution. The solution is that Puerto Rico Needs to restructure its debt. Puerto rico doesnt have the ability to do that without legislative action. And weve been working on a bipartisan basis, trying to Reach Agreement so that puerto rico can get the tools it needs to get its fiscal house in order, to have an Oversight Authority that makes sure that puerto rico stays on a fiscally sustainable path. Time is very short. The conversations have been making progress. But they need to go from making progress to crossing the finish line, and that means that there needs to be a restructuring and it has to be a restructuring that works. It cant be something thats just called a restructuring. Let me shift, if i can, to the international and talk a bit about the meetings were going to be having next week in japan. It seems like every time we approach these meetings, its the right time for finance ministers around the world to be getting together. I think right now, it is particularly so given the tremendous need to make sure that we all stay focused on growing global demand, using all the policy tools that we have to accomplish that. And equally, to refrain from the kinds of things that could be harmful to the Global Economy, things Like Exchange rate policies that are getting the world into a place where you go from marketdetermined Exchange Rates to competitive devaluation. We had a strong agreement in shanghai where the g20 countries agreed to refrain from competitive devaluation. Its very important that that be reiterated at the meeting we have with g7 finance ministers. A number of important and timely issues, ranging from the vote in the United Kingdom on brexit, to resolution of the greek debt problems, terrorist financing, Cyber Security, and financial regulation. I look forward to another productive set of meetings, but as i say, i think its an important moment for finance ministers to check in with each other personally. Why dont i stop there, and happy to go to questions. Let me do two quick once and well go around the table. I have a list of folks ill read as soon as i do mine. You made your trip to puerto rico this year, and youve spoken about it very strongly this morning. Do you have any news to share with us this morning in terms of progress in terms of getting something before congress before the july 1 deadline for their 2 billion payment . Look, i think there is progress being made. I think the discussions continue to go forward. You have democrats and republicans in congress trying to Reach Agreement. But you have a lot of forces on the process that make it challenging. There are a lot of individual interests that are making their views very clearly known. And i keep stressing to all the decisions makers that this is only going to work as a solution if its a solution in the public interest. If its in the interest of 3. 5 million americans who live in puerto rico. If its in the interest of having a stable financial outcome. I believe that thats possible. I dont want to say that were 100 there because obviously the talks are still under way. Our team has provided an enormous amount of technical input. And the leaders particularly in the house on both sides are engaged. I do believe its a good faith conversation. I do believe there is an understanding that theres a crisis in puerto rico. And i hope that that is successful. What i know is the only way to solve this problem is for congress to act. So the time is now, and the stakes are quite high. Let me ask you one other. This wont surprise you it will veer into trump land. You said the finance ministers should refrain from the kind of things that could be harmful. How much have you heard from your fellow minister s and or how much do you expect to hear about comments regarding renegotiating the u. S. Debt in an economic downturn, holding down the value of the dollar or printingll dollars to avoid defaulting on the debt . Im not going to comment on the political debate. One of the attributes of being treasury secretary is you dont engage in politics. One of the things you do as treasury secretary is spend a lot of time making sure we have the deepest and most liquid markets in the world, that our treasuries are the definition of safety. And that is something ive devoted the last threeplus years of my time to doing. Its what i will continue to do. I think the rush to safety when you see it in markets goes to dollars. Dollars are the definition of safety. Weve spent hundreds of years building that reputation, and its an important element of our economic and national security. Were going to go now to sam mosen of bloomberg, sam flemg of the financial times, kevin mcclatchey, Jackie Needham of the hill, zack corn blatt of politico, john zapel of bbc, john businessy from news max, don lee from the l. A. Times and Laura Baron Lopez of huff post to start. Selena. Hi. You are heading to china next month for the Strategic Dialogue for the economic relationship, and id like to ask against the backdrop of slowing global growth, chinas increasing clout, and the u. S. s slight pivot toward a harder line toward china what are the challenges you think that the u. S. Faces in regard to this relationship over the course of the next year . I think that the u. S. China relationship, ill limit myself to discussing the economic relationship. The u. S. China economic relationship is one of the most important economic relationships in the world. We have two largest economies in the world. The Global Economy will do well. If we do well, it will do well. It will suffer if we suffer. We have made clear in our dealings with china that they have to take steps that are good for china but also good for the economy that theres also a responsibility that comes with being one of the two largest economies in the world. I think weve made progress in the economic discussions, but we have a lot more progress to make. I believe that the chinese Economic Policy makers understand quite clearly what they need to do to have a strong economic path for the future. I think their challenges not surprisingly are political, not analytic. They know that having excess capacity that is distorting both chinese and Global Markets is not a sustainable economic path. On the other hand, they also have the challenge of how do you reduce that capacity and manage the human consequence of millions of jobs being lost . I am encouraged by the fact that the Economic Policy experts there arent doing it because they think we want them to do it. Theyre pushing it because they believe its in chinas economic interest. I dont take enough comfort to stop pressing because i think these are hard chinas in the middle of one of the most difficult economic transitions any country has ever gone through to stay on the course of reform, to stay on the course of opening to market pressures both in terms of Exchange Rates and goods and services is going to be very hard. I think that we have to continue to press as we meet at the strategic and economic dialogue and in other settings. Weve made progress and we will continue to make more. But its going to require ongoing engagement. Were going to go to sam fleming from the financial times. Good morning. Couple of questions. Lets start with one until we get around for a followup maybe. Go ahead. One interpretation being put on Donald Trumps comments about the dollar is that he no longer believes in a strong dollar policy and hed move to a more competitive approach on currency. Would that be the wrong path . And does that make it harder for you in your dialogue with other ministers when you have a president ial candidate making these kinds of comments . I speak for the administration based on the policy of this administration echoing policies that have been consistent u. S. Policies for quite a long time. You know, i think that we have watched over the last couple of years where the u. S. Economys relative strength compared to other economies has led to a stronger dollar. The answer is for other economies to strengthen. Its for regions like europe, countries like china and japan to take the steps they need to take to have their economies producing enough demand and enough Economic Activity so that the Exchange Rates naturally equilibrate through market mechanisms. We have urged and urged is a soft word. We have exhorted countries to adhere to the commitments weve made to the g7 and the g20 because if other countries start moving toward competitive devaluation it will start a Chain Reaction and if country a does it, country b will do it, country c will do it, and pretty soon youre in a battle over shares of a shrinking global pie. That will not help the Global Economy. It will not help the u. S. Economy. I believe that message has been very much embraced at the g7 and the g20. Really since 2013 we have had strong agreements and weve seen countries keep their agreements. Weve also been very clear that if we see countries deviate from the agreements it will be a very damaging thing and its something that would do real harm to the Global Economy and to relations. So thats the position we have taken. Its the position we are taking. And as i said earlier, im not going to comment on any political statements. Do you want to do a followup before we go to the next . If i would. That would be great. It was actually more specifically on japan, if thats possible, and currency policies. Clearly you gave a very strong signal to the japanese at the imf spring meetings that markets were orderly and it was not an appropriate time for them to be intervening. Do you think that message has been heard . And what will your message be at the g7 meetings on the same topic of the yendollar situation . You know, i addressed the issue just a knew weeks ago. My view hasnt changed. I think that the challenge in japan is a much deeper economic challenge. Japan needs to bring all of its policy tools to bear. Theyve had a long period of economic challenge, either negative growth or flat growth. And part of the problem is they have not brought to bear all the tools. Fiscal policy, monetary policy, and structural reform. Theyve used the tools, but they havent done them in a coordinated way. We have urged japan over the years to try to bring those efforts together. I think it is reflected in the policies that Prime Minister abe has announced in the three arrows. Weve seen alternately more emphasis on one arrow than another. But an awful lot of emphasis has been on the monetary arrow. Fiscal policy. You know, they have real challenges. They have a deficit a debt of roughly 200 of gdp. On the other hand, if they put the brakes on fiscal policy too soon, it will have a very negative impact and they need to have a medium and longterm approach to bringing their debt under control but not to bring on shortterm economic decline. Structural reform is an area that has been very slow to make progress. One of the major elements of structural reform is really contained in the tpp, the pacific partnership, where they would undertake reform of their Agriculture Sector as part of their tpp commitments. I think its one of the reasons why its so important to maintain our unity in pressing forward on having the implementation of the agreement. But japan needs to do it for its own sake. They cant just rely on one of the levers. They need to use all of them. My view on japan has remained the same. Kevin hall from mcclatchy. [ inaudible ]. Twoprong question about Panama Papers and what keeps you up at night separate from that. On the Panama Papers why did you choose, or more broadly Beneficial Ownership, why did you choose not to support the existing legislation on the hill thats there, that goes most people think goes deeper than what yours does . Who is going to carry your water on the hill in whos going to push this new obama proposal on the hill . And then on what keeps you up at night front page of the New York Times today talks about swift second breach of the swift code. The swift system, rather. Were you aware of this . How concerning is it . And Hedge Fund Losses are also piling up. How much does that trouble you . Thats three. Three represelated questions. So let me start with the question of Beneficial Ownership. We have i believe been one of the leaders in the world in making strides in transparency and tax and Beneficial Ownership issues. We passed fatka with congress and created a standard globally for the sharing of Tax Information so we could get at the question of tax evasion that is associated with the concern over Beneficial Ownership. Countries around the world are adopting that standard. We actually need more legislation in the United States to be able to Exchange Information fully. Weve gone from being the leader to now taking steps to make sure we can take the meaningful next step to make that regime most effective. On Beneficial Ownership we issued rules last week which, using the authorities we have under existing law, do a great deal to give us the ability to get more information on who the ultimate owners of various things are. On the legislative front its not a new proposal. Weve been proposing legislation for some time. We very much want to work with congress to come up with an approach that will have bipartisan support and enact it because theres limits to what we can do using administrative authority. And i hope that the focus on this issue, which is not new for treasury and its not new for the administration but is somewhat expanded in terms of global discussion, creates an opportunity for us to make progress on that issue, even this year. You know, im asked what keeps me up at night, and i have to say, given the days i lead, i sleep at night. So i never can answer that question no its literal form. I think we live in a world with considerable tail risks, and thats why you see i think volatility in so many moments in the markets. I think its a mistake to focus exclusively on risks because i think if you look at the base case the base case is pretty strong. The u. S. Economy is doing well. The Global Economy is continuing to grow. And we cant define the risks as the base case. On the question of Cyber Security, we have focused on Cyber Security very closely, treasury is the lead agency in the financial sector. We work closely with industry and coordinating with department of Homeland Security and other federal agencies as issues arise. We share information and get our hands around it. Im not going to comment on any specific matter thats under investigation. Im just not going to comment on any specific matter thats under investigation except to say that when i meet with ceos, you know, it is telling that for myself and for them this is one of the issues that on a daily basis we are aware of our areas of responsibility. That was probably not the case ten years ago. I think this has reached a level where it is an issue that leaders of organizations have to focus on and that is a message that gets down deep into the organizations, that when you have an issue you have to resolve it. You can build your defenses up to a point. But you also have to have an ability to manage because Financial Institutions like so many others are faced with thousands and thousands of challenges every day. When one gets through, you need to fix it and make it harder the next time. But we have to keep up with it. We do need to make sure that information sharing is in a place where when a problem occurs its surfaced and shared so that others dont have the same exposure and so that you get to the root causes quickly as possible. Eleanor scott of market news. Thank you. You mentioned that you want to see the g7 or g20 reaffirm this commitment to avoid competitive devaluations. This is something you said before including weve achieved it, actually, at the last two meetings. You said it before because you mentioned in washington after the imf meetings. But you said it needs to be reaffirmed, which indicates your concern about possible slippage in that commitment. Whats the level of concern that the economic problems might lead to . I think that meetings are not just about communiques. Meeings are about having frank conversations by the people who make these decisions. And in shanghai there were two elements to the agreement. One was Strong Language agreeing to refrain from competitive devaluation. The second was an agreement to communicate so that there would be no surprises amongst g20 countries. Its very important because there can be no miscues and missed signals and there are legitimate concerns that many g7 and g20 countries have about their own domestic economies. We have been clear since the agreement reached in 2013 that domestic tools that are used for domestic purposes like our quantitative easing are different than Exchange Rate targeting to gain competitive advantage. And thats just a very important conversation to keep fresh because Economic Conditions dont remain static. The pressures are not the same from month to month and year to year. But the concern to have a stable Global Economy in a system where we are working together to try and increase growth and grow demand and not taking actions that will have a contrary effect is very important because when we have around the table the key finance ministers and central bankers of the largest economies of the world, the decisions we make actually have an impact. The fear is growing in the markets that that might be a real risk of i have been focused on this for the last 3 1 2 years. You can fill in the blank as to where the concern is based on what Current Events are. But it is a deep conviction. You know, one of the things that was part of passing trade Promotion Authority in the house was giving us new authority to expand our Foreign Exchange report, to look at the kind of leading indicators of what might be concerns in terms of currency practices. We put out our first report. It didnt find that any country had crossed all of the lines. But it put some kind of yellow lights up there, which have caused a lot of i think constructive international discussion. I suspect i will have conversations about that. Becky needham from the hill. Just a quick followup on what dave asked you earlier. Are you optimistic about this puerto rico bill going through the house since it kind of keeps getting delayed . And two, how are things going with the Financial Services industry on the tpp provision that they have trouble with . Are you optimistic tpp will still get through this year in Congress Despite all the political rhetoric . So i think that the substance is more important than the schedule as long as it gets done in time on puerto rico. I think rather than have a bill that theres not agreement on a day earlier its better to wait i day and try to Reach Agreement. So i wouldnt confuse delaying a day with lack of progress. Sometimes delay can be a sign of progress if youre getting close to something. What the jury is still out on is whether well get to that point where we can all agree that theres a restructuring package that will work. Our standard has been quite clear and quite simple. There has to be enough of the credit in the restructuring for the restructuring to work and the mechanism has to be clear and certain enough that it will work. And theres a lot of technical detail behind it. But thats what were struggling to achieve. There are a lot of stakeholders out there who dont want to have their debt part of the conversation. If they succeed in pulling their credit out, it might be called restructuring, but theres not enough on the table to effect a restructuring that works. So thats what this is really about. Its nothing unusual. Im not shocked there are individual stakeholders who want to have a provision that protects their interests. But if those interests get protected, 3. 5 million american citizens in puerto rico wont have an economic future. And thats what this is about. We have to make sure this is in the public interest, not just in some private interests. Restructuring is not a radical idea. Restructuring used to be considered a conservative idea. It is a way to avoid bailouts. It is a way to avoid the people who have taken risks to bear the burden of their own risks. Puerto ricos in an unusual spot because as a territory it doesnt have access to any orderly restructuring process. The alternative to an orderly restructuring is a chaotic unwinding. That will hurt puerto rico, but it will also create risks. We havent had a chaotic unwinding of a municipality or a sovereign entity in the United States in a very long time. That is more of a risk to the kind of confidence of markets than a restructuring is because a restructuring will provide confidence that theres a clear and sustainable path forward. So thats what were trying to achieve. I do believe were making progress. I do believe that theres a shared understanding that it is urgent. We are not yet at the point where everybody is together. Hopefully we will continue to make progress even over the next days. Time is of the essence because july 1 theres 2 billion of debt that comes due. And between now and then the pain will increase in terms of daytoday life in puerto rico, but come july 1 that will be a default of tremendous size. Getting at credit with constitutionally protected which will force the commonwealth to make very dire cuts. If it gets to the point where they cant pay their police and fire, you ratchet to a whole new level of crisis. I didnt get to your second question. Ttp. Can i take a second on it . Especially where you have Hillary Clinton and trump saying negative things about it. On the globalization provision, which is what youre really asking about, let me start by defining why its challenging but i believe there is a path going forward. There are two competing positive objectives that i believe we share with the regulators and most of the financial industry. One is the general principle is something we oppose. In the Financial Services sector, there is a real need for domestic regulators to have access to information in realtime. And that is something that the industry recognizes and regulators feel very strongly about. There is a history where the challenge is to find the balance where regulator have the information they need when they need it and you cant have frivolous claims for data localization just in order to create a nontariff barrier. I believe there is a path forward, ive been working closely with regulators and industry and this is not a case to a radical difference of objective. It is just hard. Its technically a complicated area. So were working towards a solution, were making Real Progress and i dont believe it will ultimately be an issue that is an obstacle to making progress on tpp, which i believe we will get done this year. I think the policy of u. S. Government has been very clear. Weve worked across the u. S. Government to put the maximum pressure on iran for a long time to come to the table, to negotiate a resolution of the Nuclear Issues and to get iran to step away from developing a Nuclear Weapon and to close all the pathways. We achieved that in the negotiations and the purpose of sanctions is you put sanctions in place to get an outcome, in this case the Nuclear Agreement and then you have to remove the sanctions or else wills no incentive for sanctions to produce the policy outcome that theyre the Nuclear Sanctions were lifted on implementation days because complied and we complied. We make an agreement, we keep an agreement, that is critically important. It not our jobs to tell businesses what Business Decisions to make but it is our job to make sure they understand what the risk of sanctions are and are not. Iran continues to be subject to sanctions for other reasons. Theyre subject to sanctions for their support of terrorism, regional destabilization and human rights actions. There are different rules for u. S. Firms than other International Firms because we have an embargo and others dont have an embargo. I believe we have to keep our part of the bargain in the iran deal as long as ran keeps its part of the bargain. We have to be clear in communicating that but firms have to make their decision on what level of risk theyre willing to take and who theyre willing to do business with. I wanted to get your assessment on brexit. Whether you think it could tip the uk colony into recession and what head winds it might produce for the Global Economy and the u. S. Economy. It was the decision for the people of the United Kingdom to make but our evaluation is that both economically and in terms of geopolitical stability in the best interests of europe and the United States and the kind of global stability for the u. K. To stay in. We were talking about the tail risks in the world. Many of them are not economic, many of them are geopolitical. Europe being more challenged and threatened is a source of anxiety. Her majesty put out information that in the households there will be shrinking of the incomes. Future negotiation offers a lot of resources. I think theres a host of reasons why from economic to geopolitical consideration it is better for the outcome to be the uk staying in. But again, its a decision that the people of the uk have to make. Right next to you. Thank you, dave. Mr. Secretary, i know you said the secretary does not get involved in politics. Stays away. So would it be a waste of a question to ask how the credit markets and Central Banks would react internationally to a donald trump election . Now youre into two areas i dont comment on. Thats what i thought. Its a sneaky way to get a third question. The other question i did want to ask was you talked about the u. S. Economy, Global Economy growing and yet the simple way of asking the question is why arent americans shopping more . Macys as is at a 60 drop in retail as you probably have read, and americans are simply not shopping and purchasing right now. Why and will this change . First of all, i dont think thats an accurate description of the u. S. Consumer. Weve seen very strong automobile sales, strong retail sales. Im not going to comment on firm by firm earnings, but while weve been sitting here, retail Sales Numbers come out but the trend in retail sales has generally been quite positive. The u. S. Economy is 85 consumer driven. The consumer is driving the growth against pretty substantial International Head winds against demand thats weak. I think in the United States and globally the description of the u. S. Consumer as weak is not correct. There are different experiences in different sectors, im not going to comment on that, but i dont think thats an accurate portrayal of where the u. S. Consumer is. Don lee, the New York Times. Your administration and your department in particular has issued a number of administrative actions, regulations. I cant quite hear you. Im wondering if there are more especially Consumer Protection regulations that youll be rolling out and what kind of legacy the administration would have on as in terms of defending Consumer Protection. And then if i may, secretary, on puerto rico, i wonder if you have concerns about the rescue package, what implications or precedent that it may have for a state like illinois, which is in dire financial straits . In terms of Consumer Protections, there are many parts of the government that address that but we are particularly focused on a treasury is the Consumer FinancialProtection Bureau and how important the work that it does is. There wasnt an agency that watched out for consumers the way cfpb did. There are practices that contributed to the financial crisis that may not have happened if people understood what they were buying and what they were committing to. I think the cfpb in so many areas has done important work and not just that its done important work, its done work thats been widely seen as constructive by both consumer and even business groups that i find somewhat perplexing and confusing the attacks on the cfpb that continue. We will continue to resist attempts to roll back something with a high quality and standard of work in a way that when you talk to people in business privately theyre pretty impressed by. In terms of puerto rico and the precedence, i dont see this as being a risk that deceptive advertising has created fears of. The market understands that puerto rico is different than other municipal credits. The spreads for puerto rico credit have not been spilling over. Credits are looked at within the four corners of the risks that investors are considering. As far as whether this is a precedence for states, the legislature is territorial legislation. It doesnt apply to state. The territories are exempt from our current restructuring laws because of a provision that frankly has no legislative history, its hard to get an explanation of why. And i think that the lack of a restructuring authority in puerto rico is something that has to be fixed. If youre a governor, you have quite a lot of tools at your disposal to solve a debt problem and an economic problem. A territory by virtue of its size and the scope of options available is fundamentally different. It has a status thats unique and at the moment its neither fish nor foul. It doesnt have the tools that a state has, it doesnt have the tools a city has. The only solution is restructuring. I dont believe theres a governor that will step in when its legislation is passed. And puerto rico is unique in the amount of debt it has and extent of solvency. Im just wondering is there any consideration of granting them to access to uturn questions to address that. We have not given any daylight on this question of uturns. I think you have to distinguish uturns from foreign banks doing business in dollars. Financial transactions in Financial Institutions in the world take place in dollars. That is very different than a uturn where our Financial System is part of the transaction. Some of the opponents of the iran deal have friday to conflate the two. We will go live now to the is the Swift Network safe . Has the treasury tested it and you find its secure . On the g7, a lot of the countries are having difficulty with imports from china right now. What sort of message will the g7 have for china given that china really wont be at the table . Im not going to comment on the specific investigations going on now regarding the cyber issues other than to say every time theres an incident, its taken very seriously by all of the relevant authorities and theres no exception here. In terms of china and its impact on markets, we oob yusly have conversations in different groups at different times. Were going to be meeting at the g7 next week, just a couple of weeks later well be in china for our dialogue and later in the summer, in july well ba back in china for another g20 meeting. Well have many occasions over the next several month to continue this conversation in appropriate settings. I think that, you know, the impact of china and the Global Economy has different ramifications depending on what your company is doing. The impact is largely the slowing of demand for commodities. If youre a manufacturing economy, it is a question of whether chinese Economic Conditions are distorting Global Market like steel. I think theres a pretty broad concern that chinas overcapacity in things like steel an aluminum is distorting Global Markets. Thats why theres so much focus on the need to continue the Reform Program and to put in place policies that will start to shrink the excess capacity. You know, in the week after the g20 meeting in shanghai, china had a meeting of its National Peoples congress where they unveiled policies that would shrink their excess capacity. The challenge now is to implement those policies and to do it in a way that is effective. They will have to worry about the human impact. You know, just as when we talk about trade policies, we talk about things like trade adjustment. They will have to take some measures to cushion the blow for workers but it cant be by propping up industries that are producing excess capacities or it will backfire. Now they have to take the steps in their system, which is complicated because the state owned enterprises and the local governments and the social structure are all closely connected. Its not all that complicated. If they dont reduce capacity, they wont stop distorting Global Markets. Ian tally of the wall street journal. Theres some disgreems between tokyo and washington over the yens movement. You have said its orderly. Tokyo said its disorderly. Disorderly is the appropriate term for intervention. Do you think if tokyo were to intervene now, would it be inappropriate intervention . And secondly if i may on greece and its debt, the imf has been pushing for a credible program that adds up. Is there a risk that a compromise between germany and athens could breach this credibility exercise, not getting enough debt relief, not having credible exercises on the physical policy. Is the u. S. Going to support only a credible exercise . I think on the question of Exchange Rate policy, we have been Crystal Clear about our views. And more importantly, we have strong agreements in the g7 and the g20. Japan is a signatory to those understanding. They have kept their commitments. Its important for all countries who make the commitments to keep them and we will continue to have discussions. Its important, as i said earlier, that one of the things that we agreed to was to consult with one another so there would be no surprises. On the question of greece, i believe that debt relief is a critically important part of the conversation. The time for that is now. It shouldnt be put off. Greece is enacting legislation to implement very difficult provisions of the program that they agreed to. They have more steps to take. I have made it clear to greece that they need to continue to take the steps that theyve committed to. But i have very much indicated to all of the parties that we believe that debt relief is necessary. I think the imf has been advocating a mnumber of things both in terms of the need for debt relief, but also theyve argued that the targets for savings are too high, that you have a tension here where some of the europeans are looking for very high savings, resisting debt relief. And in that world its a hard problem to solve. There will have to be some give in these conversations. I think that there is a space where the parties could agree. There is some optimistic news coming out of conversations that happened at the finance ministers meetings this week. But frankly one of the topics that i will be talking to people about on the sidelines at the g7 meeting next week is exactly where they are. One of the things that weve made clear is it not going to be a good thing for the Global Economy or geopolitical stability for there to be a repeat of the kind of dramatic crisis that weve seen in greece in the past. Particularly at a time when youre approaching a vote in the uk on brexit. It would be a very unfortunate moment to have another round of high wire negotiations on greece. All the parties have said that they believe this could be resolved in may. Ive yet to see where that point of agreement is. But obviously i hope next week that we see the signs of progress there. Were at the time we agreed to stop. I want to apologize to colleagues who didnt get to question. And i want to thank you, mr. Secretary for taking the time to do this. We really appreciate it. Thank you. Hope you come back. Thank you, sir. Cspans washington journal lye every day. Coming up thursday morning, Wisconsin Republican congressman reed ribble joins us to is discuss the ongoing fight against isis and whether the u. S. Should be arming libya in an effort to defeat the terrorist organization. The congressman will discuss other issues before congress and his thought ons the 2016 election. Then Texas Democratic congressman gene green will be on to discuss zika and the Opioid Crisis as well as the future of the health care law. Watch cspans washington journal, join the discussion. Thursday, a hearing on public accommodations laws for the disabled. The house judiciary subcommittee on the constitution and Civil Justice meets at 9 00 a. M. Eastern and you can see et here on cspan3. Wednesday, Queen Elizabeth spoke at the state opening of the british parliament. She delivered a speech written by the government that outlines the priorities for the coming year. Sunday well bring you the bbc parliaments coverage hosted by daniel britain. Thats at 9 00 p. M. Eastern on cspan. Our campaign 2016 bus continues to travel throughout the country to recognize winners from this years student cam competition. Recently the bus stopped in massachusetts. They went to the sage school in fox boar wrote where all of the students in 1st through 8th grade attended a ceremony to honor the 7th graders for their Honorable Mention. Also made a stop to recognize Honorable Mention winners. And James Elliott won for his video titled lgbt rights. Stop the discrimination. The two were honored in front of their classmates and local nirnls. A special thanks to our Cable Partners for helping to coordinate these visits in the community. You can view all of the winning documentaries at student cam. Org. Now a discussion on how isis uses the internet and social media to recruit supporters. Security experts testified before the congressional internet kau sus Advisory Committee on the federal effort to come bath the terror group online. This is just over an hour. Good afternoon, everyone. Were going to get started. Welcome to this panel, disrupting isis online, the challenges of come bathing online radicalization