Face a full set of challenges. I worry about complacency, governments that have never successfully forecast a recession a year in advance, that missed the 2007 financial crisis, that missed the 1987 stock market crash, t missed the latin american debt crisis and missed much more. I worry about how well macro prudential can really work on, though its an attempt worth making. And i think much greater emphasis needs to be placed on making a system that is safe for ignorance can and court reportereporter error. And that means emphasis on capital markets, emphasis on liquidity, emphasis on strengthening the robustness of the system. The last time we had a great emphasis on macro prudential, it was spains countercyclical Capital Requirements that we were going to protect against the spanish real estate bubble. That didnt work so well. Mr. Tom bainny, briefly. Yeah. I think one issue that hasnt been discussed so much lately is the fact that this exit is unsynchronized this time around. You see more advancement in the area. In the u. S. And in the uk. But then when you look at japan and europe, you dont see synchronicity from one perspective. We dont have a vacuum cleaner in terms of resources being attracted to the advanced world. I mean, you have areas still in the unconventional mode. But on the other hand, you might have more volatility in the Exchange Rate thinks those moves dont seem to be synchronized going forward. Obviously, for us, europe will be key. But that was already mentioned. Another key financial markets, suddenly we have a loss of confidence again, with big flows in and out of safe havens, that obviously will put us in a very difficult situation. Its been a great pleasure to have you all with us here for this live cnbc conversation. I hope youve enjoyed it. And can we show our appreciation for our panelists. Youve been listening to a fascinating policy chat on Monetary Policy on. George osborne making out that its great that were having this conversation about when we cut away some of the support mechanisms that low Interest Rates has been in the United Kingdom. Its a sign of success, not failure in Forward Guidance in the bank of england, as well. Might be pushing it a bit too far. Mr. Kuroda saying consumption will be robust and we will see decent in 2014. Larry sumners made an interesting observation. This has been nowhere near on the consequences from the period that has been used historic only to compare with, as well. Mr. Tom beaney said its a net positive that we see tapering, as well. The brazilians have been critical about quantitative easing and tapering. Just reiterate the point Everyone Needs their own path because he has been previously critical. What did you think, julia . I think that was one of the brilliant points. He borrowed one of our and shot Thomas Jordan right down with the point that 1 20 is the ultimate form of guidance and controlling where the currency is. They always set an Exchange Rate limit, of course. The speculators know historically they can challenge you in on that. Lets listen in to a few more of the highlights for the future of monetary debate. You set up this debate as a debate about exit from exceptionally supportive Monetary Policy. That in itself is a mark of success. That is a mark of a number of economies that have started to see the recovery take off. And were not in the kind of gloomy debate that i remember here at davos and elsewhere a year ago. And that points to second observation i make, which is Monetary Policy works. Theres nothing wrong with Forward Guidance. I just said that, in fact, every country has to choose a concept that really is appropriate for the situation of the country itself. In our case, i believe you have to have a simple concept. The Exchange Rate is at the moment at the center of this concept. And you have to be careful not to have too many conditions of Forward Guidance. I think brazil was one of the first to say that at the end of the day, the beginning of tapering is a net positive for the Global Economy, for international trade, therefore, for emerging markets, including brazil. All right. Very interesting. Listening to some of those comments, as well. What i thought was very interesting was given the opportunity to talk about the euro scope and the ecb, George Osborne said the greatest risk to the United Kingdom is the concern over the disastrous performance of some economies and their unemployment. Thats the underlying theme weve had of the last three days, the concern not just about unemployment, but deflation again and again. Its a shame we didnt have mario graggy on that panel. He had an opportunity. Lets listen to what the panelists had to say on the state of the recovery right now. After nine months of implementing the the economy is on track. Currently, the economy is growing. And even after the first tax hike in two stages, takes place this year as well as mid next year. So particular thing worth highlighting, sort of the dog that didnt bark. If anyone had described how serious the economic problems were going to be, people would have expected much more of an outbreak of protectionism than weve seen in the world. And while theres certainly problems, we didnt see it over the last four years. Businesses will invest when they have confidence in the future prospects of that economy and confidence that their investment is going to generate a return. Understandably, particularly in the european continent where we had a near death experience with one of the Worlds Largest currencies, the euro, people have been very risk involved. Welcome to worldwide exchange. Im julia chatterley coming to you from davos. And im ross westgate. Here in the studios in london, these are the headlines. The policy has worked. Policymakers from across the grove in the cnbc debate defend Forward Guidance and their extraordinary actions during the crisis. And youve set up this debate as a debate about exits and exceptionally supportive Monetary Policy. That in itself is a mark of success. And also at the debate, cautious optimism over the state of the global recovery. Former treasury secretary Larry Summers says the u. S. Recovery hasnt been what he hoped. Speaking earlier to cnbc, prudential faces the futures bright stateside. The u. S. Consumer is back. Business was excellent across the u. S. And that means that all the factories and all the companies producing goods for the u. S. Markets will continue to do work. European stocks with china growth fierce and mixed u. S. Earnings put the dow and the s p 500 on track for the worst performance in six weeks. And a third explosion rocks cairo after two separate bombs kill at least five people and leave dozens wounded, according to egyptian reports. Well, welcome again to worldwide exchange. What a fascinating debate weve had here in davos. We heard from Japan Central Bank governor saying theres going to be no problem with the consumption tax. Japan is going to grow at 1 to 1. 5 . And it was quite interesting to see Larry Summers stunned when pitchling against George Osborne there. Good point, fair point over his criticism of uk austerity, ross. He had a grow at macro prudential saying they didnt work in spains case. That was the thing that george was talking about, wasnt he . He said weve got all these tools that the bank of england can use and Larry Summers having another go at that. I think the interesting point about the fact that were talking about the he made this point, the fact that were talking about exit means weve got a successive global Monetary Policy. Its an interesting thought. I mean, a lot of people who, of course, said we had to exit because its not doing any good any more, as well. How much is kiwi in the states, for example, driven this recovery . Could you have done something more effective in the third round of qe, which has bostoned asset prices and just clean up the banks and direct that money direct into business to help hiring . I dont know. Theres a lot of debate around that. There is. And define the term exit there, as well, when you have the likes of the fed Balance Sheet continue to go grow and expected to continue to grow this year, too, ross. But we have a jump actually for you again. Im going to be speaking to the french finance minister. Lots of turbulence on the political and the personal side there. Given what weve seen in the last 24 hours with china and concerns, too, about their banking sector, im going to be speaking to the former chairman of the bank regulator. So im incredibly excited about that, too, ross. Another jam packed show coming up. Right now, well bring you up to speed with where Global Markets are. Weighted to the downside, we are indeed at a session low, as well. Decliners outpacing advancers by around 8 2 on the dow jones stocks 600. The ftse off about 0. 3 . The xetra dax and cac 4 down nearly off a 11 why he at the close. Xet kra dax down 0. 5 and the cac 40 down 0. 6 . Ftse mib down 11. 15 . Nokia was rebound ed. 1. 17 . They are handing over their phones, of course, to microsoft, who did fairley well after hours, up nearly 5 at the moment for microsoft. It beat with its Second Quarter profits, revenue up 14 with the likes of microsoft 1 and the surface tablets doing fairley well. Nevertheless, stock up in frankfurt here up around 3. 8 . The company failed to comment about the ceo, as well. Now in the bond market, yield fallen quite a lot, actually. Tenyear treasury yields, now 2. 75 . 2. 759 is sort of the low that weve matched in yesterdays session. Bond yields down to 1. 67 and gilt yields down to a sixweek low. We got down to around 2. 775 , sort of just below that, as well. You have to remember, we were up to nearly 2. 9 on the yield post that employment number just 48 hours ago. The reason weve got yields low is, of course, weve got a bit of a risk selloff. Thats interesting how that is playing off in the currency markets because euro dollar has been perceived potentially more as a safe haven to the dollar. Dollar yen has come back down to below 103. Basically seeing a selloff across the board for the dollar. And terlg pretty much on the 2 1 2 year high that we hit during the session yesterday at 1. 6625. Thats where we stand at the moment with european trade. Sixuan has been patiently waiting for us in singapore. Hi, sixuan. If thank you, ross. Asian markets traded to the downside this friday. The shanghai composite added 0. 6 . The shenzhen composite gained 11. 3 and the china exports ended higher by 1. 6 to a new record high. This small cap tech centered index is up over 6 for the week, over 12 yeartodate and lets not forget it values price percent last year. But in japan, the nikkei 225 tumbled 2. 3 as the dollar yen weak. Ed to a twoyear low. And in the region tech space samsungs q4 mobile profit tumbled 18 from q3 and shares ended higher by 0. 6 after the company pledged a higher dividend. Meanwhile, lenovo paired down some early gains and gained 1. 2 after the chinese pc giant agreed to buy the low end server business for 2. 3 billion dollars. Shares of this information and content Service Provider surged to near 14year highs after alibaba said it would jointly control the company in order to enter the pharmaceutical data industry. So that is a look at the asian markets. Ross. Thanks for that, sixuan. Still to come, blasts killing five according to reports. Well be in cairo with the latest right after this. [ male announcer ] the new new york is open. Open to innovation. Open to ambition. Open to bold ideas. Thats why new york has a new plan dozens of tax free zones all across the state. Move here, expand here, or start a new business here and pay no taxes for ten years. Were new york. If theres something that creates more jobs, and grows more businesses. Were open to it. Start a taxfree business at startupny. Com. I nethats my geico Digital Insurance id card were open to it. Gots all my pertinents on it and such. Works for me. Turn to the camera. Ah, actually i think my eyes might ha. Next Digital Insurance id cards. Just a tap away on the geico app. Could save you fifteen percent or more on car insurance. Everybody knows that. Well, did you know that when a tree falls in the forest and no ones around, it does make a sound . Ohhh. Ugh. Geico. Little help here. A third blast has been reported near the cairo Police Station after two earlier explosions killed five people, according to reports. Yusef is in cairo with the latest. Yusef, what do we know . Well, ross, its been a dramatic few hours. It started off with a large explosion that rocked the capital, woke me up, as well, really. It was felt across the city. Basically, went up at the Cairo Police Headquarters not too far away from our Vantage Point, probably about 3 to 4 kilometers. That is a symbol of state security. We understand from the ministry of health that at least four people have been killed in that explosion and 76 injured. Leaving a massive crater and damaging not just the front facade of the building, but also some of the surrounding structures, as well. Keep in mind that Security Officers and administrative interior have already taken additional precautions in anticipation of violence over the weekend. And that was followed by a section explosion just a few hours ago. Again, here we understand from the ministry of health that one person has been killed and four wounded. That was your metro station again. Not too far from our Vantage Point in that direct. Again, whats interesting to note is that the series of explosions, all three of them happening close to or near security stations or Police Stations, an ied going up in the pyramids area. That, of course, a clear escalation of the level of violence that were seeing in the coming of a critical juncture for this country. Saturday, it will good through the third Year Anniversary since the 2011 egyptian revolution. Coming off the back of the referendum, some decisions, as well, supporters of ousted president Mohammed Morsi and the Muslim Brotherhood has said it would stage protests and supporters of the armybacked transition, as well. Nobody has claimed any responsibility for these explosions, but well keep a very close eye as this story develops. Ross. Yusef, thank you for that. Plenty more to come from yusef in cairo. Elsewhere, whether forthcoming elections can be delayed will be discussed in a thai court. A vote has been scheduled for february the 2nd which the opposition says it will boycott. Meanwhile, street protests continue in bangkok despite a 60day state of emergency. Were still digesting what came out of our cnbc debate earlier this morning. The brazilian Central Bank Governor was one of the five panelists there. He made a few comments about the brazilian economy. He described it as being robust. Given the growth estimates around 2 this year. He also reiterated the comments that he made last year about tapering being a net positive. Its a sign that the Global Economy is recovering. He also said trying to adjust policy, theyre trying to rebalance their economy and fight high inflation. That country is still significantly above the inflation target. He did say its under control and they have been able to lower it. He was trying to put the positive sentiments across about the economy right now. But i did actually get to speak to the brazilian finance minister yesterday and in light of the moves that weve seen in some of the emerging markets overnight in particular. I asked him about the impact of fed tapering and tightening last year and whether we could see ongoing volatility this year. Translator i believe that as the International Economy recovers stimulus will once again be in plague place for emerging economies, such as the brics. We only accelerated in the recent past. With the american recovery, which seems to be consolidate, some level of economic recovery for europe as well as for japan and the uk, you may possibly see recovery. And probably also from china which will continue to grow by about 7 . India, which will grow by 6. 5 . Do he see both for further follow tilt this year . Youre talking about a u. S. Recovery, by that has not impacted tapering and tightening of u. S. Rates. Could we see a similar effect this year than we saw last . Translator tapering causes some volatility in Exchange Rates. Hahas started and started in ma last year, i do want believe we will see a lot more than weve seen. Youre fighting high inflation. Analysts believe we could see rates as high at 1 1. 5 this year. Thats going to have an impact to consumer demand. Thats going to have a huge impact, isnt it . Actually, next month, well see the first tapering take effect and subsequently it will depend on the performance of the american economy. And i think the market will get used to it because it anticipates thing and has accounted for this tapering for a long time. So i dont think there will be a lot of volatility and i think the market has adapted. We did also talk about the world cup. He did say that brazil would win. I think thats being a little unfair to england but, hey, weve move on. Still to come on the show, unemployment is one of the key themes that has come out of davos over the last few days. After the break, well discuss given the improvements were seeing in the u. S. And the uk, the have and