Transcripts For CSPAN3 Politics Public Policy Today 20240622

Can be accomplished [ inaudible ]. Why dont you go ahead and take it. So let me first say, i think you touch upon an important observation about too big to fail which so much relies on the discretionary decisions of government and government decision makers, whether it is the d. O. J. Or the s. E. C. There is nothing about too big to fail economists. It is by political decisions and of course when eric holder goes before congress and said that somebody is too big to jail, that reinforces that perception. And on the data point, so again i would start with data can be suggestive as best and during the crisis we saw suggestive data that the funding advantage for the largest institutions had expanded and yes that has contracted but in my opinion you would expect that to contract post crisis. I think you could compare the funding cost today versus precrisis over time. People forget before the crisis, say in 2006, the largest banks paid more to borrow than the smallest banks. It was completely flipped. And today the largest banks get about a 2530 basis point advantage. And there are a number of reasons for that. But the data suggests that too big to fail has not ended. Touch on a couple of pipes that you made. One was with respect to enforcement and prosecution in the role that could play in the aftermath of the crisis. I worry about the the muddling of actual fraudulent culpable action with bad Business Decisions. I dont think we want to be a nation that prosecuted bad Business Decisions and i think a plausible explanation of the crisis is people believe ben bernanke when he said there is no housing crisis. A lot of disclosures prosecuted as fraudulent in Mortgage Backed security deals have involved disclosures that ben bernanke was saying so i have trouble seeing this was a crisis perpetrated with fraud. And of course there is instances of fraud, certainly we should prosecute it. But i think with respect to the enforcement issue another problem is we dont have enough clear doctrine followed by s. E. C. And d. O. J. In charging decisions on collective se emter. And when it goes to trial and when you develop case law, there is a good doctrine that we should do more work on. The idea is when do you attribute bad action by individuals to the corporation. When the board and the ceo decide to do something bad, it is the corporations fault. When some distant employee in a division overseas does something wrong that is not necessarily Corporate Action and so i think the s. E. C. Should do an interpretative lease and that would resolve the bad actor exemption debates going on right now. Let me pick up on j. W. s point. When former chairman bernanke said there was no housing crisis when the housing crisis was already started that was an incredible mistake but not a crime. Right. I had a question here but then a gentleman over here. Wait for the microphone, please. Hi. Rath boya. Thank you for this fascinating panel discussion. I understand this is quite complex given the number of too big to fail banks and regulation and a number of agencies with power and a number of Financial Products. My question to you is if you look at all of the advanced countries, which advanced country do you think has come up with reasonable regulations that encourage Economic Growth in light of Financial Products but at the same time have reasonable tools and measures in place to prevent the financial crisis are effectively manage a financial crisis where you would be like i think this is good enough that would satisfy you. Anybody want to take that. A look around the world, who has done the good job. Ill start with the qualification, nobody anybody lives up to my standard i think canada and switzerland do a well job with banking regulation. Other thoughts . I would tend to agree with mark on switzerland, especially because of the Capital Requirements they impose on the Banking System. And i also think that since the peso crisis in the 90s in mexico that the mexican Central Banks and security have taken significant steps to shore up the integrity of the Financial System and to make sure that system is not susceptible to massive downward price movements in oil. Peter . I would like to make a comment about the Housing Systems that others have used too. Because we want to keep the focus on what caused the financial crisis here in the United States and it was not the inadequacy of regulation of the private sector. It was the policies of the u. S. Government. For example, many other countries had large bubbles as we did in housing. And when those bubbles collapsed, as we know in the United States, the results were catastrophic because there was so many subprime and other very risky loans in our Housing Finance system as i pointed out, more than a majority, it was actually 56 of all of the loans in the Housing Market were subprime or risky loans. But in other countries that was not true. And so when their Residential Mortgage bubbles collapsed their losses were much smaller. A study by professor javy from berkeley shows the greatest losses occurred in the u. K. And were about 3 or 4 and the United States the losses for fannie and freddie were 13 to 17 and for some of the private institutions were even higher than that. So thats the point we have to keep focused on here is that there wasnt really a need to redo our entire regulatory system here. It was a need to redo our Housing Finance system and understand what went wrong with that. Id like to add, because chris got me thinking about this, the example of mexico is a fascinating one, in that postpeso crisis, mexico went from 15 provided by foreign banks to 80 or so today. You could joke a little bit and say the mexican Banking System is the canadian Banking System with the extension of Nova Scotia Bank and others there and it was pushed because the domestic banks failed to badly you wouldnt have Banking Services unless you opened up the borders and you had extensive competition and domestic constituencies feel less strongly about bailing out foreign banks so i think scotia bank will not be bailed out. And i say this because many of the discussions about Financial Regulation and trade and what were seeing really is a kind of pulling up of the draw bridge where we dont want european banks here and you view the top from the fed about the dangerous from european banks entering the u. S. And such. I think we should have more foreign competition on u. S. Banks is my bottom line there. Thank you. Thanks for the question which stimulated the panel. Well take a question here and this will be our last question for the panel . No . Anybody . Okay. Were going to wrap up the panel. And lets show our appreciation for their excellent comments. [ applause ] well, peter, thank you for your very very kind words. I believed about half of them. Im told cspan is filming this live. If so, i think my wife and children with watching back in dallas and they probably believed even fewer of them. But nonetheless, thank you for those very kind words. We know that those on the left have been known to occasionally travel into factfree zones. And for them occasionally story telling has replaced truthtelling but not with my dear friend peter wallisson. His work on the true causes of the financial meltdown is really a paradigm of scholarship, if you have not read his work, hidden in plain sight, i highly recommend it. And it is required reading to be a member of the House Financial Services committee. We need more of this Solid Research done. And so peter thank you for everything you do and helping us on the Financial Services committee so much. Im sorry in a Arthur Brooks could not be here today. Im a huge fan of his. I love the title of his new book and i was very happy to find a copy on my desk, the conservative heart. I assume it was designed to be intentionally ironic since conservatives have no heart and liberals have no brains. So should that be true there might be very little arthur can do to help those on the other side of the political spectrum but there is much that he has done to change the misperception of conservatives or create or restore a conservative language that speaks to the heart and not just the head. As we all know, the founders were deeply conservative and yet they spoke a powerful language of personal worth and happiness. It sparked a revolution of equal rights and liberty under the law that is still transforming the world today. Because it is the conservative movement that lays down the foundation for meaningful work and family and community and faith. The institutions that make it possible for every human being to pursue their godgiven right to happiness. Now im told this is authors 11th book, clearly im not keeping up. He is writing them much faster than i can read them but nonetheless there is the august district work period coming which is traditionally when i catch up on my reading. I look forward to catching up on his latest work at that time. Again thank you for inviting me to aei. I have been long an admirer of the work done here and for your noble purpose. Ive already thanked peter, but also scholars like alex pollack who is here. Paul coupy ac, a frequent contributor to the efforts of the majority in the House Financial Services committee and their works are very very admired. And although wearing a different brand, mr. Clay burn, welcome to you as well. Ladies and gentlemen regrettably something is changing in america and not changing for the good. The animal spirits of Free Enterprise and entrepreneurial dream chasing that have identified us as a people are regrettably being tamed. This corresponds not only to the challenging Economic Times that we continue to see but through the perceptible loss of freedom in america today. My remarks are focused today on the unhappy results of the doddfrank act, the socalled wall street reform and Consumer Protection act which was signed into law five years ago today. No need to be the first one in your neighborhood to throw a celebration. Weighing in at over 2300 pages promulgating 400 new administrative rules it represents simply the most dramatic sweeping rewrite of our financial laws since the new deal. At the time, the proponents including the president promised it would lift our economy in too big to fail and promote Financial Stability yet five years later the evidence continues to mount that our society is now less stable, less prosperous and less free. The financial panic of 2008 clearly caused much anger against Financial Firms and the bailouts courtesy of the taxpayer that they received. The liberal story has been an al kehmy of wall street greed outsides risk and massive washington deregulation almost blew up the planet. This in the liberal narrative insisting on enormous bailouts and Capital Markets by federal regulators courtesy of doddfrank. Although faults, the narrative has permeated the body politic. Im reminded of churchills remark history will be kind to me for i intend to write it. To our detriment we have allowed the left to write the first history of the 2008 financial panic. Thankfully peter has written the definitive history of the 2008 financial panic. Other scholars at aei and other good committed conservatives have followed as well. It is clear now that the financial crisis did not result from deregulation but instead resulted from dumb regulation. In fact, statistically total regulatory restrictions on the Financial Services grew every single year in the decade leading up to the financial crisis. Including such landmark laws that were held for stopping abuses sarbane oxley, just to name a few. But washington failed to prevent the financial crisis, in many ways, it led us into it. Washington promoted bad loans supported by fannie mae and freddie mac to meet the Affordable Housing goals which were put on steroids. Lets remember that more than 70 of the subprime in alt a mortgages that led to the crisis. We break away to take you live to the Justice Department and a news briefing with loretta lynch. Were here today to announce that a federal grand jury in South Carolina has returned a 33 count indictment against dylann roff charging him with federal hate crimes and firearms charges for killing and attempting to kill africanamerican parishioners at Emanual Church in charleston, South Carolina because of their race and in order to interfere with their exercise of their religion. As set forth in the indictment, several months prior to the tragic events of june 17th roof conceived of his goal of racial tensions and seeking retribution for perceived wrongs he believed africanamericans had committed against white people. To carry out these twin goals of fanning racial flames and exacting revenge, roof further decided to seek out and murder africanamericans because of their race. An essential element of his plan, however, was to find his victims inside of a church. Specifically an africanamerican church, to ensure the greatest notoriety and attention to his actions. As alleged roof set out the evening of june 17, 2015, to carry out this plan. And drove to the church in charles ton, South Carolina another as mother emmanuel it was his destination specifically because it was a historically africanamerican church of significance to the people of charleston of South Carolina, and to the nation. On that summer evening, dylann roff found his targets. Africanamericans engaged in worship. He met with welcome by ministers and he joined them in the bible study group. The parishioners had bibles, dylann roff had his. 45caliber glock pistol and eight magazine loaded with hollow point bullets and as set forth in the indictment, while they were engaged in religious worship and bible study, dylann roff drew his pistol and opened fire on them ultimately killing nine church members. Now as you know, the state of South Carolina is also prosecuting roof for the murders, attempted murders and firearms offenses hes believed to have committed. We commend them for their quick response. But it is important to know that South Carolina does not have a hate crimes statute and as a result the state charges do not reflect the alleged hate crimes offenses presented in the federal indictment returned today. Specifically, the federal indictment returned today charges roof with nine murders and three attempted murders under the Matthew Shepherd and james bird hate crimes prevention act. This federal hate crimes law prohibits using a dangerous weapon to cause Bodily Injury or attempting to do so on the basis of race or color. The shepherdbird act was enacted specifically to vindicate the unique harms caused by racially motivated violence. Roof is charged with nine murders and three attempted murders under a second federal hate crimes statue that prohibits the use or threat of force to obstruct any persons free exercise of religious beliefs. Finally, roof has been federally charged with multiple counts of using a firearm in the commission of these racially motivated murders and attempted murders. For these crimes roof faces faced penalties up to life imprisonment or the Death Penalty. I note no decision has been made on whether to seek the Death Penalty in this case. The department will follow the usual protocol to thoroughly consider all of the factual issues relevant to that decision which will involve counsel for the defendant roof. In addition consultation with the victims families is an important and vital part of the decisionmaking prose and no decision will be made prior to conferring with them. The family members of those killed an the survivors were informed of these federal charges earlier today. I would also note that this indictment contained allegations. It is not evidence of the defendants guilt. Now as you will recall, this federal grand jury indictment follows an announcement that i made on june 18th of 2015, that the department of justice was conducting a hate Crimes Investigation into the shooting at e manuel ame. Immediately following that, the experienced prosecutors in South Carolina along with experienced attorneys from our Civil Rights Division began working closely with the fbi, atf state and local Law Enforcement officials including the South Carolina Law Enforcement division or sled, the Charleston Police and the Solicitors Office for the ninth circuit of South Carolina in thoroughly investigating the crimes. I would like to thank the many state and federal local Law Enforcement officials for the dedication for the hard work to ensure this investigation was conducted thoroughly and expeditiously. I would like to thank srk u. S. Attorney bill nettles for his and his offices tremendous efforts on this case as well as the dedicated attorneys from the department Civil Rights Division. In particular, i would like to extend my thanks to charleston solicitor scarlet wilson for being a cooperative and effective partner in this matter. We have a strong working relationship with solicitor wilson and her office and look forward to our continued collaboration as the parallel federal and state prosecutions work way through their respective court systems. Thank you for your attention. Any questions . Who will go first . South carolina or the federal government. That hasnt been determined yet. Were working with solicitor wilson. Well both work to reduce any unnecessary burden to the families. What thought process goes into that kind of decision. What thought process goes into who goes first . There are any number of factors. Well consider how the cases are progressing through each system and essentially how the judge is reviewing the case. The state of motion practice. Both cases are in the early stages, have yet to have motions so at this point it is difficult to say how that will impact on the schedule. This would fit the definition of domestic terrorism, were those charges considered in this case and can you elaborate on that deliberation and such charges. There is no specific domestic terrorism statute but hate crimes as ive stated before is the original domestic terrorism and we feel that the behavior alleged to have occurred here is arc typal behavior that fits the federal hate crime statutes and vindicates their purpose. We have here a defendant who is alleged to have harbored discriminatory views toward africanamericans, to have sought out an africanamerican house of worship the one that was particularly noted because of the age and significance and he also sought out africanamerican parishioners at worship, implicating several hate crime statutes and we think that this is exactly the type of case that the federal hate crime statutes were in fact conceived of to cover. Racially motivated violence such as this is the original domestic terrorism. Abc news. 2015, if you look at the essence of the case brought forth in the indictment and the fact the people are dead today because of the race, that is primary what you allege in the indictment, can you speak to what stands and that this still exists. This is obviously a tragic and troubling situation. As the allegations in the indictment reflect the mindset of this young man and his specific purpose to target individuals for death because of their race. But also to target individuals for death who are engaged in religious worship as well. So i think that we have to remain vigilant about these matters. We certainly at this point dont know much more about the defendant. The investigation is ongoing into a host of matters including those motivations but i think that the message that should be clear to this is that the federal government and our state partners are committed to investigating these matters fully and thoroughly and where we have racially motivated violence, committed to acting. In the back. Hi, maam. It says in the indictment that he targeted mother emanual specifically because it was an africanamerican church of significance to people of South Carolina and the nation. How do you know . How do you know that is why he chose that church as opposed to any africanamerican church . How do you know it was the National Significance of the church . So i wont comment specifically on the evidence that will come forth at a trial except to note that we believe that the evidence will support the allegation that roof chose mother emmanuel because it was an old church a History Church and it was historically significant as one of the oldest africanamerican churches, not just in South Carolina, but in the nation. And that he was looking for the type of church and the type of parishioners whose death would in fact draw great notoriety for his views im sorry his racist views i should say. In your remark you use the language because of and i wonder to what extent must all other factors but precluded, such as Mental Illness and drug and alcohol addiction, and if his attorney said he hates everybody, he hates his mother and he hates gays, what impact does that have. Hopefully we would not receive information like that but we would certainly act on it if we did. Wherever you have the possibility of multiple motivations you have the possibility of multiple charges. As you will note, the charges here specifically allege racially motivated violence in the murder and attempted murder of the victims of mother emmanuel but also the federal hate crime statute that prohibits using violence to essentially prevent anyone from exercising their religion that is not tied to race that is tied to the exercise of religion. So we see here for example activity that supports allegations of more than one intent as well. Now with respect to issues that you raise about the defendants state of mind, of course, all of that will be taken into consideration as this case goes forward. Im not able to speculate now as to what impact any other factors would have on the case. You suggested that this was a sevenmonth plan. Can you elaborate a little bit about how detailed this plan was, whether he made trips to the church prior to that night june 17th . Thank you for the question. Im not able to go into how many months he was planning it. It was several months prior to the june 17th incident. And im not able to go into the evidence right now that would show his actions surrounding that at this point. Maam, following up on ryans point, should there be a federal domestic terrorism law. Because for your average person who sees the way people in Law Enforcement talk about different types of killings with different words, what distinction should they make when they hear talk about a shooting in chattanooga as terrorism but a shooting here as a hate crime. Does it matter and should there be a domestic terrorism law. Well as to what laws should or should not come out as a result of this investigation, im not going to speculate at this point in time. As to the nature of the case, though i think you touch on the issue that people may feel that because we have such a strong emphasis on terrorism matters since 9 11, that when we talk about matters and dont use that terminology that somehow we dont consider those crimes as serious. And i want to be clear, nothing could be further from the truth than that. This type of crime in particular, racially motivated violence for which a federal law was specifically enacted to cover, is of grave importance to the federal government. We have devoted considerable resources from the beginning of this case to make sure that this interest was explored and that if, in fact, the evidence supported it the allegations were brought, because this is in fact the arca type of the original domestic terrorism. And i think people do focus on the terminology because as i mentioned since 9 11 there has been a great focus on that type of case. But it should in no way, no in way signify that this particular murd murder or any federal crime of is any lesser significance. How will you determine whether or not he is a candidate for the Death Penalty. The department of justice has a process by which we consider death eligible defendants in determining whether or not to seek that penalty. It is a detailed and thorough review process. It involves submissions from defense counsel. It involves consultation with the victims families and it involves a review of all of the various factors that we would utilize to seek the Death Penalty to determine whether or not we feel we could prevail on those factors at a trial. Ultimately, after this review process, which is both at the u. S. Attorney office level and then also here in main justice and ultimately it comes to my desk where i make the ultimate decision whether or not to seek the Death Penalty in any death eligible case. As ive said before, i do want to be clear no decision has been made that point in time as to whether or not to seek that penalty but we do have an obligation to mace the defendant on notice that the penalty is an option and to allow his counsel the time to begin to prepare to make those submissions. Can you talk a little bit about what your office is doing in conjunction with the fbi and can you talk about what your office is doing in john junction can the fbi to sort of close the issues that came up with him getting the gun. As director comby announced ten days ago, he announced a review into the procedures that allowed us to that unfortunately missing the fact that roof was allowed to purchase that gun. This is a matter of grave importance. It was something very disturbing and frankly heartbreaking to all of us reviewing that matter. And that investigation is on going and i look forward to receiving the results from it. On a slightly different topic, yesterday you said you were looking at the brandt case. Can you expand on that. Are you officially monitoring will you open an investigation . Youre referring to miss bland who died in texas while in police custody. As noted, that matter is actually under investigation by local authorities. The fbi is monitoring that case as we often do in many situations and were awaiting the results of local investigations as well. Maam could you talk a little bit about what your views are on the planned parenthood videos out and i know there have been letters from members of congress. There is an applicable federal law here and is that something you going to open an investigation on . Im aware of those matters generally from the media and from inquiries made to the department of justice. And again, at this point, were going to review all of the information and determine what steps, if any to take at the appropriate time. Just switching gears, can we expect any charms to come from the department of justice tied to the perpetrateor of the opm. That is an open investigation and i cannot comment as to what charges may or may not result with that. Whatly say is that the department of justice and other federal agencies are actively involved in notifying everyone who is subjected to that breach and providing them with the tools necessary to protect their personal data. The families of the victims down in South Carolina, your reaction to how they responded to the very difficult circumstances . I think from the beginning, the families of the victims of the mother emmanuel shooting have provided an example to the country of what true grace and true spirit and true faith looks like. I think they are an inspiration to us all. I frankly do not know how many of us would be able to find that type of forgiveness in our hearts so soon after such a terrible terrible, heartbreaking loss. In particular i thought what was helpful for everyone watching that was to see the families acknowledge they were angry, they did in fact had anger toward the person who had taken their loved ones but they were able to, while Still Holding on to the anger, still move to forgiveness. I think that is a incredible lesson and message for all of us. General it has been sometime now since your office in new york began the investigation into the death of eric garner. When can we expect a resolution . Are you close to it . Well i cant comment on the timing of that investigation except to say it is still active and it is still ongoing and the Eastern District of new york is moving ahead with that investigation in a thorough and efficient manner. Well take one more question. Given that the more people on u. S. Soil i think by nonmuslim radicals or extremists since 9 11 do you think that you are properly organizing resources to focus on the domestic terrorism threat . Well we are tracking a number of threats aimed at americans on u. S. Soil and abroad. And certainly the death of any american, the death of anyone is a matter of grave importance for us here in the federal government. Without commenting on how were allocating resources, i would simply say that we take all threats seriously whether they come from a foreign terrorist organization, a domestic Militia Organization or an individual who posts threats online. We take all of those matters very seriously and devote what we feel are the resources necessary to first of all protect individuals who come under those threats and if in fact, we learn of the matter too late to vindicate their interest and bring the killers to justice. Thank you all. Well share this briefing later in the cspan network and you can watch it later on at cspan. Org. Now back to stash tash on discussion on Financial Regulation and the effects of the doddfrank law. It is hosted by the American Enterprise institution. He has to leave at 3 10 so that is when we will adjourn. But in the meantime if i can remind you again if you have a question, tell us your name first, your affiliation and then ask your question and well keep going until 3 10. I have questions here. Yes, sir. Wait for the microphone here please. Right here. Im sorry. Right in front of you. There we go. I should have kept my hand up. So in terms of legislative could you give us your name and affiliation. My name is rob trick anelli with bloomberg b and a. And in terms of legislation, democrats are dug in. You think. And what is the way forward if there is that much opposition from the other side. Are there bipartisan talks going on or are we at a complete bipartisan impasse . Well, i hope not. Particularly when it comes to regulatory relief for a Community Financial institutions. We have attempted to work with democrats. In fact, im proud that our committee has put forth already two dozen bills that have passed the floor, many of which are by definition modest regulatory relief provisions. Unfortunately doddfrank again appears to be sacred text among some democrats. I dont believe barney frank to be among them. Hes indicated half a dozen different areas where he would amend his own law. There is very little i agree with liz warren on but i believe she thinks that doddfrank hasnt solved too big to fail. So hope springs eternal. But if democrats are going to decide that doddfrank is a brand to be protected or a legacy to be secured, notwithstanding the unintended consequences fraught in a 2300 page bill that forces 400 rules to be promulgated, i dont think weve quite had twothirds of the rules finalized as of yet, then, yes, well be somewhat at a loggerheads. Having said that, im thoroughly convinced that left was working on obama care before obama was even born. So this may be a long labor, and im a patient man and even by washington standards relatively young. I think there was another question right next to him . Did you have a question here . No. All right. Right over here please. Core mactoews. Our future. Org. And my question is, you mentioned that by being declared significantly important Financial Institutions you are codifying too big to fail. And if this is true then why is our is met life suing its designation as too big to fail . Well you would have to ask met life. I suppose as an Insurance Company they dont want to have a bank a bank capital standard imposed upon them. It is a completely different bos model. The fed has absolutely no experience in applying capital standards to an Insurance Company. So again you would have to speak to them. Listen, it is a mixed bag to have the federal bailout imper modder behind you but i suspect they dont want those capital standards imposed upon their business and im quite certain Asset Managers dont either. Again, these are not banks. These are completely different types of Financial Institutions. And maybe they know what ive said in my speech the federal government doesnt have a particularly good track record in managing risk in the first place. Im sorry right here please. Yes. The lady in the yellow there thank you. Hi. Elaine middleman attorney. And im from indiana and my family has had interest in a small bank in indiana for many years. What what can the local bankers do if doddfrank is not repealed to amealy ate the ameliorate the problems that you are facing. Well im a legislator not a banker. They have to hold on in hopes that help will get here. The good news is i feel fairly confident there is going to be np election next november. And i believe that now we have five years of data and five years of crin ediblely strong anecdotal evidence that again doddfrank is making us less free and less prosperous and less stable. The data is undeniable at the rate of loss at our Community Financial institutions. We are losing the relationship banking model in america today. They are losing the competitive advantage. And so when you say what is it they can do well they can have their voice heard. The right to petition your government for the redress of grievances last i look is still enshrined in the constitution. I would continue to have them appeal to some of the more reasonable democratic minds in this city and believe it or not, i do not consider that to be an oxymoron. But im afraid that too many of them are intimidated today by the voices it is a struggle between the left and the far left and sometimes the left hand doesnt know what the far left hand is doing and the far left hand is choking off any reasonable debate about the fate of our Community Financial institutions, be they bank or credit union. So how they adjust their Business Model under this regime, im not sure im qualified to say. But House Republicans are doing everything we can to get help there as soon as possible. And any time democrats are willing to work with us it doesnt matter how modest the regulatory relief is, there is an open door to work with them to try to save the banks and the credit unions. Mark then well get to you. Can we get a microphone up here please. Before you ask the question, remember i did say nice things about you. Well, absolutely. This is going to be helpful. First, i want to address the question that was asked about why met life and others dont want to be too big to fail and to remind us all the advantage of being too big to fail is you get to borrow at a lower rate. And so if you look at the example of jp morgan where 40 is longterm debt and versus met life where 5 is longterm debt as institutions like pnc and we run the risk we are encouraging met life to become more leveraged and my question for you is other than repealing title two what would you do to end too big to fail . I think you can make a case after 08 that capital and liquidity standars were insufficient. I do not think you can make a case they are insufficient complex. So i think the key, mark is to focus on what are those appropriate levels but as you well know it is the classic goldilocks tradeoff. If you get the porridge too cold you have perhaps 2 Economic Growth when history tell us weve averaged 3. 5 and with the right Public Policy we could be doing 4. 5 to 5 . If you get it too hot, then all of a sudden maybe you are looking at more cascading failures. Again, right now the danger is that we are allowing credit to be politically allocated in america. By federal regulators who are the ones who brought us to the press pis, the crisis, in the first place. By deciding that historically prudent under writing standards in real estate should be thrown on the ash sheep and that we can live in this bold new world that anybody could own a home. I want anyone to have the opportunity to own a hold but federal policy and federal regulators did nobody any favors by putting them in homes they could not afford to keep. So number one i would again i dont know if i could get rid of title one or title two, probably not in the shortterm but i would hope maybe there could be Common Ground on trying to work for more simplified capital and leverage ratios based upon historic norms, that on the one hand cant be gained by the participants and on the other hand does not empower federal bureaucrats to be central planners. Thank you. Youve been waiting here and then well get to you. Wait for the microphone please. Thanks. I just wonder remind us your name and affiliation, my name is me young. Ive been here very frequently. I just wonder if congressman can really do something about our system. Our system when you say conservative conservatives has no known brand, the problem is that the system has neither heart nor brain. So i just wonder if you can really fix the system because when you have a misrepresentation and misinterpretation of the free economy and Free Enterprise, that just means free for those who can rob other peoples resources, including public or individuals or families or businesses so there is no way to have a Good Economic Development of growth. So unless the department of justice i think were going to stop there. Chairman, the question is how do we fix the system . How many hours do you have . Well we have six minutes. Well i dont have a shortterm pify answer f. There are fools in office there are fools that put them there. My experience is politics is not so much governed by numbers but by intensity and it will take people becoming more wear and politically active in the system and part of that is the work of aei to empower people with knowledge and facts and arguments but to you know i understand that the congressional Approval Rating stands somewhere between head lice and bubonic plague. I get that. And so people are concerned about the system as they well should be. But america is polarized at the moment. I think the poling data bears that out. So there shouldnt be a surprise that congress is polarized as well. Listen, i have strong thoughts on what is wright and wrong in america but i never let my principles interfere with trying to compromise policies. Again jefferson said the ground of liberty is gained in inches. So ill negotiate in faith with any democrat and ask myself at the end of the process is this piece of legislation taking me in a direction i want to go or dont want to go, is there more good or more bad and so i think it is important, how do we improve the system. The mesh people have the American People have to hold the elected members accountable but in order to do that they have to educate themself about the process and decide ultimately what values they believe in and i still believe the American People believe in the core values of economic liberty well of liberty period. It was economic and religious and political liberty that brought people to our shores in the first place and bringing them to our shores today. There is something unique about it. I believe in american exceptionalism but people have to take enough time to understand the policies and hold members of Congress Accountable and they could start by talking to democrats about the plight of community banks. Were going to have a question here and this is going to be our last question for the day. Unless it is difficult. Then well make time for two. Thank you for that wonderful speech. I was on senator dodds staff during the drafting process and i didnt understand it then and im even more puzzled now. More importantly did he understand it . Well it has to do more with process. But why couldnt the bill be a compromise bill . Why couldnt it have sarbanesoxley was a bipartisan bill, why didnt dod or frank attract enough thoughtful leaders like you to make it a different product . Well, you would have to talk to them. I cannot climb inside of their inner most thoughts. What obviously suggests itself is that the Democrat Party was enjoying a rare super majority at the us in the house, in the senate at the time. And because of that, they did not need a single republican vote to pass their agenda and they were not interested in American People might be able to embrace. I mean, they had a supermajority that a party might enjoy once or twice in a century. I recall the cynical words of now whichg mayor rahm emanual, never let a serious cite is go to waste. It allows you to do things you other wise could not do. And dodd frank was a grabbag wish list from the left that had nothing to do with the financial causes of a financial crisis and let us remember, and im sure peter is well aware of this because he was on the commission, the commission that reports on the what the root cause of the financial crisis were came out after dodd frank was already passed. So it is kind of like playing basketball and the other team hasnt shown up on the court. You are dribbling and dunking and they decided to dribble and dunk and unfortunately the American People, i think, have again suffered less freedom, less prosperity, and less stability because of it. And my hope still is that in divided government there will be at least enough democrats to say we can clarify dodd frank, maybe there are ways that we can improve dodd frank. Im not going to give up my quest for replacing it. But i can walk and chew gum at the same time so i can work with democrats and find Common Ground and try to keep a few more Community Financial institutions alive, and try to improve our gdp just a little. But any way that is a better question for them and i havent seen either of them in a while. Any way. Thank you very much for this rare privilege to speak to you. Thank you very much. [ applause ] ladies and gentlemen, thank you all for coming and for being with us today. Join us tomorrow when secretary of state john kerry, ernest moniz and jack lew will testify. Watch it tomorrow live at 10 00 a. M. Eastern here on cspan 3. Considered underrated by many first lady historians Caroline Harrison was an accomplished artist who took up painting and carried that interest to the white house establishing its china collection. She was interested in womens issues and helped raise funds for Johns Hopkins university and she was the first president general of the daughters of the American Revolution until she died in the white house from tb. This sunday night on cspans original series first ladies. From Martha Washington to michelle obama, sundays all the 8 00 p. M. Eastern on American History tv on cspan 3. Its almost as if they were matter and antimatter. Hes always to the right and almost always in the wrong. Complicated, confuses himself. Film makers talk about their documentary best of enemies on the 1968 debates between William Buckly over war politic, god and sex. Theres not someone in their ear like this today. Today, i believe, theres someone saying the numbers are dwindling. Talk about hot topic number two. Whereas then i dont think that was the norm in tv at the time. And i dont think these guys didnt need that. He mentioned was the moderator and was a distinguished news man who was embarrassed by this. He was moderating, but he disappears for sometimes 5 or more minutes at a time. Today you wouldnt have a moderator not jumping in every 30 seconds. So i think really everybody at abc just stood back and let the fire burn. Sunday night at 8 00 eastern and pacific on cspans q a. Just before the British Parliament recessed for the summer, foreign secretary Phillip Hammond discussed Foreign Policy developments at a hearing in london. He addressed efforts to combat isis, the terror attacks and the iran nuclear agreement. Secretary hammond talked about his recent meet inging with the israeli Prime Minister Benjamin Netanyahu over the iran deal. From tuesday this is just over an hour and ten minutes. Order, order. Welcome to the first public session. The committee of the 2015 parliament. Foreign secretary, thank you very much for making yourself available to be first witness. To begin the session, i know this session is necessarily is short. Were also grateful to make yourself available to come back again in september. Its a pleasure to be here today and it will be a a pleasure to come back and have a fuller session in september. I appreciate the committees just being appointed. My congratulations on your election and to all members on their appointment. Our longterm strategic interest. Lies in strengthening the rules based International System and our key Foreign Policy objective is to strengthen that system. To do that we have to draw in the major emerging powers to show them that it is in their interest to work with the rules based system rather than to kick the traces over. Now we have to look eventually and this might be a longterm project but e eventually to drawing russia back into the rulesbased system. Over the next five years, i have no doubt that our priorities are going to be the renegotiation of our relationship with the European Union. The defeat of the military expression of violent extremism and then continue inging to undermine the narrative of violent extremistism and the challenge of responding to russias more aggressive stance towards the International Community and its major program. If i deal with those three things. The committee is aware of the process. The Prime Minister set out his broad areas of concern where he believes reform is necessary not only in britains interests but in the interests of making the eu competitive, accountable, relevant to its citizens in the future. At the june european council. Since then we have agreed with european colleagues that there will be an official Level Working Group looking at some of the potential routes for resolve ing the issues that the Prime Minister identified looking at the legal constraints and perhaps opportunities. That process will continue through the summer and the autumn and will continue our engagement with eu kouptcounterparts. Im pleased to say that all 27 Member States have told me clearly and categorically they want britain to remain part of the European Union. Some have said a European Union without britain in it would not be. Recognizable as the European Union they know. And they are prepared to work with us to try to ensure that the changes are made that will be necessary if britain is going to be able to remain inside the European Union. And thats the key because we have set the test not of a deal in a smokefilled room with politicians but of a referendum where the british people will make the ultimate. Decision. Our partners in europe know that the offer they come up with, the package of reform thats agreed has to be enough to satisfy the demands of the british people for change and the strong sense i believe, in britain that the European Union, the european project has changed dramatically since they last made a democratic decision on this in 1975 and in many peoples view not for the better. So its about resetting the dial so the European Union better represents what the british people expect to see of a european structure, and i think that is a focus on economic delivery, growth jobs, the prosperity, helping us to defend our Living Standards in the face of a globalizing world. If the eu can show that it is organized to do that, it will have relevance to the people not only of britain, but the people of all 28 countries of the European Union. The first duty of any government and the immediate. Major challenge that we face is that of islamistinspired terrorism. Whether were talking about complex plots in the spaces of the middle east whether were talking about lone wolf attacks inspired by dashs online propaganda. Tackling isis in iraq and syria remains the key to tackling this challenge. The Prime Ministers described it as a generational struggle. The military defeat of isil in iraq and syria will not take a generation but defeat inging the underlying ideology will be much more complex. The Prime Ministers speech yesterday outlined our need also to emphasize and reenforce British Values to make sure people feel empowered to speak up for British Values and to combat not only terrorism violent expressions of that extremism, but to combat extremist ideology itself because it creates the Fertile Ground in which violence and terrorism can take root. In addressing the challenge of islamistic extremism currently represented by dash but if we defeat dash i have no illusions there will be other manifestations of extremism in the future. But while we take on that challenge, we must not forget and we must not sacrifice our ability to respond to a more conventional statebased threat to our security. Russia, we have to remember what russia is and isnt. Its a Major Nuclear power. It z has very large armed forces but it has a smaller economy of the United Kingdom. It has a e declining population and ageing population. It has an economy thats imbalanced with a huge dependence on massive corruption and huge state influence over the operation of the economy. That makes it a very challenging adversary and over the coming years it will in my judgment, remain a very challenging ed a ver sar. The russians are also developing Innovative New capability ls. There is a tendency in the west to characterize rushsia as a rather bureaucratic, rather clumsy opponent. They have been agile in exploiting new technologies like cyber in blend. Ing those offensive capabilities into conventional capabilities and creating what we call a full spectrum effect capability use ing cyber operations, for example, and we are being challenged to rethink the way we do defense and we have to think about how we respond to an adversary in which all Decision Making power is concentrated in the hands of one man. I have heard it said that russia is a more centralized state today than it was where at least there was a bureau that had to be consulted in some sense. That means its a power that can make decisions effectively, respond very rapidly to a changing situation that can exploit opportunities very rapidly and we as a nation and as part of a western alliance in nato have o to think about how we deal with the challenge of our relatively cumbersome decisionmaking processes and our much broader need to get by for any course of action from a wide range of actors. Parliamentary parliamentary, public opinion, Civil Society in 28 countries across nato. So this is a also a very big challenge for us and its not just a challenge of being ready with conventional forces. Its a challenge of thinking outside the box in responding to russias innovative approach to warfare. Meanwhile, the prosperity agenda must remain at the heart of 9 fcos work and our diplomacy. The Prime Minister and the chancellor have said many times that you cant be a strong country unless you have a Strong Economy. You cant have a Strong Defense unless you have a Strong Economy to underpin it. The Foreign Office is an important part of the agenda. Ive said many times and ill say again today must be to protect britains security to promote britains prosperity and to project britains values around the world. If we do these three things successfully well deliver our obligations to the taxpayers who fund this. The Prime Minister has signalled that britain is not in retreat and well play our role in keep ing the world safe and supporting our own allies. That means rebuilding the best in the world that my predecessor started ensuring that Foreign Policy is made in the office building, the professional skills of diplomacy reopening the Foreign Office Language School establishing the Diplomatic Academy ensuring that resources within the Foreign Office are aligned with our stated priorities. And i think we can see some of the benefits coming through as we play a role in resolving some of the major crises the world faces most recently taking a role in the vienna talks to resolve the Iranian Nuclear file. We have in the uk almost unrivalled assets at our disposal. We are p5 members. We have world class armed forces and recognized world leading intelligence agencies. We have unrivalled sofl power at our disposal through the benefits of language and culture, but also many institutions around the world that have an unrivalled position and reach. We have a world leading development program. Were members of the eu members of nato, members of the commonwealth. All of these overlapping circles of influence give britain an opportunity to play a significant. Role for the good in the world, both for the good in a moral sense but also for the good in the sense of protecting our National Interest and were determined to make the most of them. The process is under way and the Spending Review is now, i think, officially under way with the starting gunfired today. Both will be challenging exercises. I have no doubt about that. I am clear that the Foreign Office will be able to deliver further efficiencies. I do not think that savings on the scale that are indicated by the fiscal trajectory can be delivered simply by the pairing. I think we have to look to make some Strategic Decisions about where we need to focus resource and where we have to downgrade. For me personally im clear that the crown jewel of the force offices capability is the network, the network of International Platforms around the world. We must seek to protect that sharp end presence in addressing the need for further efficiencies and we will look to do a that over the coming months. I think we should note that the response to the atrocity in and earthquake in nepal have demonstrated the increasing expectations that people have of our services and the l investment were making in services, in particularly u Crisis Response is very important in satisfying those. Were pleased with the way our crisis capability responded to both crises but clearly we can always do more and we always look to learn lessons. Whats changed between the last government and this government . Well, the governance priorities will have changed a little bit as a consequence of the end of coalition. And some of the ambitions that were tempered in the previous government will come to the floor. Renegotiation of our membership of the European Union would not have been able to be pursued in coalition. The government has already set out its commitment to giving our security agencies the capabilities they need to keep britain safe and to legislate where necessary to do that. Most importantly i think is the signal that is i hope, being september clearly that britain wants to play its part in the world to be seen as a reliable and consistent and capable ally. Is and to do its share of the workload in delivering the world that is safer and which is more conducive in our objectives for the people and promoting our prosperity and protecting our security and protecting our values. In picking up the inheritance from your predecessor, do you think the Foreign Office has yet achieved that status of a Strong Enough role in directing uk Foreign Policy. Z has the process of reenergizing and putting leadership of Foreign Policy back into the Foreign Office, has that process been completed yet . The National Security secretary and make s it more complex. I think the arrangements are working well but the Foreign Office is focusing resource and effort on rebuilding the core cape capabilities, the Core Competencies that allow it to own that process. You own a process not by bidding for it, but by kiptly showing that you have the capabilities to do the work that is required to be done. The predecessor committee concluded that the budget couldnt be cut without afelkting the capacity. And since youre still working and trying to improve the capacity of the office, perhaps you could share the challenge you have just been invited to take on by the treasury. What scale of budget saving are they looking for you to find and how is that consistent . I think past experience would say initial pitching should be regarded ass a operational and ranging short. The departments collectively and unprotected departments collectively will have to make substantial savings, double digit percentage savings. In the case of the Foreign Office we do make use within our activities in budgets, which are protected and which will grow assuming the economy will continue to grow over coming years. The chancellor has also created some additional protected funds around counterterrorism security activities with the Foreign Office also plays a role in terms of the cash budgets. But isnt it rather frustrating being the secretary of state being the brains that affects policy overseas that your budget is unprotected yet its not protected as been different for some time. First of all, im delighted that the mods budget is now protected, as you would expect as a former defense secretary. But not only that, there is no doubt in my mind that the most important measure by which our International Partners and indeed our adversaries judges our willingness to invest in our defense. So although its the mod budget that has the privilege of protection the benefits in projecting our Foreign Policy will definitely be felt in the Foreign Office. I dont want to detract from the fact that meeting requirements for further spending reductions will be very challenging. As i said earlier, i think the wrong way to do it would be to try to slice all areas of activity. I think we have to make some clear evidencebased decisions about what it is that adds the core value. Its the Foreign Network that really adds the value and its that presence around the globe more points of presence than i think in saying any of our partners apart from the United States has and we want to preserve that and we want to preserve the capability of it as well as the Numerical Strength of it. One of the things you mentioned was projecting British Values around the world. You would agree is respect for human rights. And rumors abound that you intend to drastically scale back on the annual report on human rights is that true and if so i dont think its a rumor. The intention and it shouldnt be seen as a cutback, the intention is to make what has become a very lengthy document this includes recycle of a lot of material available elsewhere a much punchier and usable document and they have published a a statement about our intentions in this regard. If she z has, i dont know about it. I would ask you how would this committee how are we going o to hold you to account on human rights unless you publish the details . The annual reports have been very useful for those with a particular interest in. The subject and some people peruse them over weeks rather than days. Yeah, and i understand that. My own having come to them afresh would be what one gets is a very long text repeating most of what was in the previous editions very long text. What the people who have specifically interested have to do is comb through it to see where there are subtle variations in the text. I think what were going to try and do is reduce the volume of material and get more to the point, drawing peoples attention to the issues that need to have attention drawn to them. Drawing out our conclusions about whats going on. The thing has become more and more wordy and in our view less and less user friendly over the years. And we want this to be a document that is not only used by a very small group of very committed experts but is more accessible to people who more generally are interested in the issue and the countries. I think you can anticipate that this commission would want to continue that work in whatever form you produce analysis out of on your human rights work. Thank you chair. My question, we dont know exactly what the budget will be for the department, but i think everyone is anticipating there will be more cuts. I anticipate that we have more dangerous world, we often soft power is more effective than quite often military options. Wouldnt it be appropriate to expand the budget and expand the work of the Foreign Office so we can have actually more diplomacy and more longterm aleeuation of problems . I think as the world has got more complex in many of the challenges were facing has become less clear cut. You think back to the days where the adversary was the soviet union and we knew everybody stood. Terrorism was a a domestic issue. I would think its less important. Thats not the case at all. The nature of the military capability we need to be able to deploy is changing. I think that the distinction between military capability and what we do in Capacity Building through our development budget. S and programs is becoming more blur blurred at the edges. I think a lot more joined up government is required to deliver this program than was the case probably five or ten years ago. In response to this emerging trend, that definitely gives us the ability to flex budgets across the whole spectrum from respecting the restrictions that there are around at one end and respecting the restrictions about what defense money which accounts can be used for the other end. There is an ability to use a number of budgets including fco budget, across the spectrum in a way that delivers the most effect. It will be different in different countries. There are countries where you need a pretty hard edged approach because there isnt a partner government to work with. There are other countries where diplomatic efforts where we have a fragile but functioning government, where working through diplomatic challenges and. Providing Technical Support to build capacity is the most effective way we can advance britains agenda. Its about having a proper balance and using our budgets flex bli, which is absolutely the way we approach all of these things now. Can we turn to the most pressing hard challenge that our country faces in terms of isil. Thank you very much. The committee that we like to hear in your words what you think the fcos role is in the uk governments effort to meet the threat from isil. Obviously, it is multipronged or full spectrum but what specifically is the role in this . The fco leads on our relations with foreign governments and if we start in iraq we have the lead responsibility for encouraging the Iraqi Government to adopt the policy that we belief will be most conducive to longterm stability in iraq. We work with partners in the gulf and weve kiptly encouraged partners in the gulf to be supportive of the Iraqi Government to reach out themselves to the sunni constituency within iraq to try to rally that consistency in support of what Prime Ministers government is doing. Beyond iraq and syria, working with governments and working to resolve the situation where there is ungoverned space is a key Foreign Office diplomatic role and were working on the one hand to ensure that they are building the capacity to respond to the challenge that they are fragile democracy is now facing. On the other hand, support inging the u. N. Led process in libya in the hope that we will be. Able to see the emergence of a government that we can work with in syria to secure our security equities. What can the fco do to bring about a more. Active contribution and what im getting at here is you know as well as i do the military response is only one part and its not the longterm solution. Its about the Host Communities the sunniarab communities that need to be brought on board. That needs the cooperation of the regional powers. Over the weekend secretary kerry has voiced some concern about the status of the Supreme Leader about being opposed to american policy in the region. What more can we do to bring about saudi arabia turkey and iran to play a more positive role so the iranianbacked militia should be under the command of the Prime Minister but they are not clearly on the ground. How do you see our role developing in that space to bring about the cooperation so that the Sunni Community feel that they can trust this process. If youre talking specifically about iraq, i would agree that the iranian deal creates the possibility of an opening to a more constructive dialogue with iran, which will be important in. The context of what happens in iraq, but we cant bank that yet. And realistically we have to accept the possibility in the shortterm consequence of an Iranian Nuclear deal, which does not find favor with all our hard line factions in iran. Maybe a spike in iranian unhelpful activity around the region. But i think in the medium term, there is reason to be cautiously optimistic that as iran starts to see the benefits with the International Community, it will start to feel like a place that has a bit more of a stake in its region and a a bit more of a stake in the world. There are many countries in the world who have instincts to do things in their region more widely, which are not necessarily helpful but those are sometimes tempered by a recognition of their own selfinterest in stability. So i think there is reason for cautious optimism and we will be looking for every opportunity to try to gently nudge iran and the other powers in the region towards some kind of businesslike dialogue. Were not expecting them to embrace each other enthusiastically, but a businesslike dialogue that recognizes that while they have and will continue to have very substantial differences, there are nonetheless some areas where their interests align. Rather as while continuing to have substantial differences with russia, we have been able to Work Together on the iran nuclear file because our interest. S aligned and we worked constructively and pragmatically on that file. Before asking daniel to speak, congratulations on the iran deal or my congratulations. To both you and simon for the role i know the office has plaid over a very long time on that. Its certainly my view that its a significant achievement. Its a very good start to this new administrations diplomatic achievements. Thank you, can i just thank you and its not just the department, but simon personally who submitted himself to more weeks than any of us would normally be able to tolerate to play the very Important Role in the team that delivered this. Thank you, mr. Chairman. Coming off the question of iran i, too, would like to associate myself with the chairman. The United Kingdom has played a unique role in bringing about this agreement and both you and your officials ought to be congratulated on that. But having secured greater engagement with iran, what are their perceptions, if i may ask, on the spread of isis in iraq and what chances are there, if i can can press you, on engaging iran more effectively to take this terrorist organization on. I think the one thing that we can say without any fear of contradiction is that iran shares our concern to put it mildly, about isil. They see them as a mortal enemy, which needs to be eradicated and we have a clear alignment. We have many or areas where our interests are not aligned and the trick is to make sure we can Work Together to achieve a Common Objective while respecting the fact that there will be many other areas that we remain in dispute over. And this does require i think some change in the way iran engages with the International Community if that is going to work. But i have no doubt that there will be people in iran who are looking to ensure that one of the consequences of this agreement is that we collectively are able to be more effective in our military response to daesh. We had had a conversation and he corrected me when i said we had now had some common interests in the region. He said we dont have common interests, we have common challenges. Thats quite a good way of putting it. Its different from our own, but there are common challenges. The approach which iran is likely to take to combatting daesh is unlikely to be the same approach that we would take in significant respects. The chair has referred to the control of shia militias. For trying to find areas with a commonality of challenge, but we will always need to work carefully with iran. I dont see any chance of us suddenly becoming great friends in the region. With the prosperity agenda that you clearly outlined at the beginning of your speech, could i ask what will be the sort of signal to British Companies now for actively seeking contracts in iran, particularly with regards to oil exploration. I have to say as somebody who represents midland seat, it was a midlapds company that actually helped the iranians to build their first state car decades ago. There are obviously many opportunities for british firms. At this early stage what is your advice to British Companies . I think British Companies will have noted very clearly that the fact that the agreement has been made will, if all goes according to plan, lead to the relaxation of sanctions and, as important, the release of a significant value of frozen assets. So iran will not only get the benefit of regular cash flow from being able to engage in international trade, but will also have the blocked assets which amount to 150 billion released to it. A briefing on opportunities for britt british business. Our European Partners are already revving up to determined and the chancellor with the Foreign Office on this that uk business will be up there with the best in seeking to be able to meet the requirements that iran has for permitted imports and to look at irans investment potential as the market opens up. Im not sure its going to be as much in the shortterm about exploration in the hydrocarbon sector as about renewing infrastructure to maintain production levels and increased production levels. Theres a a lot of very ageing infrastructure and technology. Technology has moved on a long way during the period that iran has been under sanctions and we would expect a significant amount of Capital Investment to go into irans hydrocarbon infrastructure. We will return with a gentle nudge is a policy response given the gravity of the threat we face in the region to try to get our potential partners into a place to actually develop a policy that will put us in. The best place to defeat daesh. But let me now turn just one word on that. I think the point that i was trying to make, if i can remember the context in which i used that phrase, i dont think it would be helpful for us to go in there with the sense that we are now banging heads together. You and you, we want you to sit down and talk. It has to be much more subtle than that. It has to be about helping each side to see where there might be limited areas o to Work Together. Im not a great believer in the grand bargain. Now its all all right, sit down and have a big discussion about everything. Thats unlikely to be productive, but there will be some areas where people who have quite significant differences can have a limited perhaps relatively junior channel of communication, which delivers some practical benefit to both sides. You start to build in that way. Obviously, were going to return in some detail over the course of the next parliamentary session. I think the government made it clear they want to put a vote to the house. Military participation and personnel in syria in airstrikes. There is a general concern that we seem to lack when it comes to full spectrum response. Whether its disrupting financial flow, business interest, taking when it comes to social media. Thats before you even get into iraq and the failure of the iraqi army to make significant progress and a more direct relationship with the kurds in trying to combat daesh. But put all that to one side, can you tell us what you would hope to achieve from participation by uk aircraft in airstrikes in syria given that our contribution would be minimal compared to what the americans are already putting in, even if you put aside the legalities and once you also take into account the air power without effective land forces actually is unlikely to succeed. Well, i think the key to this is seeing iraq and syria as a single theater. At the moment for our military operation, a limited set of permissions that stop at an artificial borderline. As far as the enemy is concerned, theres no borderline on the iraq syria border, but were operating on one side delivering lethal strike and on the other side delivering surveillance. So i think there are a number of points. On any logical assessment, thats inefficient. A uk surveillance asset that could be armed over syria is operating unarmed. If it acquires target information, its then got to task another asset belonging to another Coalition Partner to go and make the effective strike, if thats whats required. So theres a simple efficiency logic about being able to conduct operations across both theaters. But i think more importantly, it is difficult to see how daesh will be effectively militarily defeated without being defeated in its home base. So this fight eventually has to go over the iraqi border into syria. And at the moment the uks permissions are limited to iraq. With respect, just as you point to the border, thats a slightly artificial answer in the sense that without Ground Forces, theres an old adage of boot. S on the ground you dont really expect, do you, do defeat daesh through airstrikes alone . There are strikes. The army is being slowly and pain stakingly rebuilt. As the various militias are playing a role in the battle. Now this isnt im not suggesting that we have an optimally configured set of Ground Forces in the region, but im equally clear that injecting western boots on the ground, as you say, would not be the solution. Can i just put you right. I didnt suggest western boots on the ground. I said boots on the ground. We are confining our remarks to syria and not iraq when it comes to military intervention. Can i move this on . Thank you. To build on that point, what kind of longterm plan has been done for whatever you hope to achieve with airstrikes . Its a little worrying that you mention Ground Forces in terms of stabilizing, but were talking about in syria. Taking military action without planning scent subsequently been done after. Well, the overall plan in syria remains to see a political transition in the regime to a government which has legitimacy and buy u in from the majority of groups in syria that can then take the fight to daesh. Thats the outcome that we see. Now its not going to be easy to deliver. We recognize that. In the meantime its easy to to this campaign has suggested that airstrikes alone can finish off the enemy. They cannot. But they have arrested if you remember where we were may of last year isil was speeding towards baghdad and they were stopped. They were forced to change their tactics on the ground. They were forced to operate more as a terrorist organization with a cellular structure thanrather than a military force because of their ability of air strike. There is no doubt that airstrikes have degraded not only their military capability but have prevented them from carrying out planned atrocityiesatrocities degraded their ability to exploit economic Infrastructure Oil infrastructure in particular. And have had a debilitating effect on their occupation of that territory. Thats not the same saying if we do a bit more air strike they will surrender. Of course, they wont. I dont think, just as john has said, nobody believes that airstrikes alone could destroy isil on the ground. I dont think any sensible military commander would be prepared to clear that it ground without having had the benefit of a pretty Solid Campaign of area delivered degradation before the boots on the ground went in. Otherwise they would get slaughtered. When you talk about boots on the ground in syria whose boots on the ground are you talking about in syria . Well, we have a longterm strategy to train and equip an opposition, but i would be the first to recognize that that is proving a pain staking process. But that has to be the way that we go. There are two different dynamics in syria. Theres the battle between the islamist fundamentalists and others and then theres the battle between the regime and its opponents. And we have always been clear that what we mustnt do in syria is to repeat the mistake that was made in iraq of dismantling the entire structure and leaving nothing in its place, leaving a void. What we need to do if the regime collapses, suspect that precisely what the effect might be . It depends on what you mean by regime collapse. If the institutions of the regime collapse, then that is what the effect would be. That is not the desired outcome the. The desired outcome is political change at the top of the regime to create a situation where the basic infrastructure of the state can be preserved, but with a political legitimacy that is share ed shared by all the major groups competing. Isnt the British American position around assad running the risk that the forces and institutions of the regime would collapse if our policy was successful leaving a void and making the situation as far as taking on isil significantly worse than the challenge we face today . Our political strategy is to work with other players including the russians and hopefully in the post Nuclear Deal World increase ingingly the iranians to find the solution that allows a transition from the existing leadership to a new leadership and eventually a transition to a democratic syria. That is much to be preferred than a collapse to the regime. But i recognize that the pressure the regime is under, there is a risk of Something Different happening. So thats our intention thats our desired outcome. But clearly the regime is under pressure in a significant number of areas. Can i ask whether the uk could be doing more to harness the military capability of Kurdish Forces in both iraq and syria . And a touch to that just remind you several times about the plight of the a see dees, particularly the women, which also the Kurdish Peshmerga were able to assist. I think we failed to assist. Who failed to assist . I think we failed to assist them. I think thats a little harsh. Last summer we delivered a considerable operation designed to rescue the people stranded on mount sinjar. So we did intervene where we saw an intervention that could be helpful. You have asked me a number of times about the fate of the women who have been captured by isil. Im afraid to say that the women and other women captured by isil we have little clarity about what has happened to them. From what we do know, we cannot be very optimistic about their fate. We know that many women who have been captured have been effectively enslaved abused and maybe killed. Can we do more to use the military capacity of the Kurdish Peshmergas and also the peshmergas in syria . Just to be clear we dont control the peshmerga. The kurds are clear about what they will do and wont do. They see the peshmerga primarily as a force for defending kurdish territory and for liberating kurdish populations. What they are prepared to do beyond that in support of the wider objectives of the government of iraq and the liberation of syria is limited. So we can and we do work with them. We have very good relations with them, but they are quite frank about the limits on what activity they are prepared to engage in. I want to turn now to tunisia. Hopefully well have time to o open it up to colleagues for questions arising out of your opening statement. The attack and murder of 38 people on the 26th of june didnt lead to the immediate decision by the British Government to restrict travel advice. You you changed the position on the 9th of july. Can you tell us the reasons for that . Yes. Intelligence. As we embedded more and more people with the tunisian authorities and as they uncovered more of the picture around this attack the picture that we developed made us more concerned that a further attack targeting western interests was likely. Who took that decision. Was it the National Security council, the Foreign Office or was it copper . I took the district to change travel advice. Travel advice is determined in the Foreign Office on any major or sensitive piece of travel advice, i take the ultimate decision personally. In this case, i did discuss it with the Prime Minister because we were very much aware and very conscious of the fact this would have a Significant Impact on the tunisian economy and weve made clear that we want to support tunisia in every way possible but we have to put the security and safety of our citizens as our number one priority. I understand that. But other European Countries with their own people in tunisia have not taken the same position. And there are still as far as i understand it, tourists from france germany in tunisia at this time. Why is it that we have intelligence that gives us the view that we need to evacuate the british people and maybe the danes and the irish do too. I think the spanish changed their advice ahead of us and a number of countries have changed their advice, i know sweden has also changed their travel advice i think the netherlands. The simple answer is the germans, which is the other country that has a significant amount of tourist traffic to tunisia, have a team which only arrived in tunisia yesterday to start doing the work that we started doing in the immediate aftermath of the attack. We have developed a victim very clearly. Our experts, through the joint terrorist Assessment Committee have looked at the threat and we get regular updates on the threat picture. We have to look at the scale of the threat. We have to look at the mitigation that is in place. And we have to make a judgment on the balance of threat and mitigation, whether or not we can continue to advise british tourists it is sensible to travel to a particular destination. The position weve taken it is not at the present time. We very much hope that a combination of action that the tunisia government is taking to deal with the network behind this attack and action that the tunisian government is taking to reinforce Preventative Security will allow us to revisit that decision in due course. The tunisian government is obviously publicly and privately very disappointed by the decision and clearly it has terrible implications for their economy. Can you update us on the discussions that youve had with the tunisians . I understand that your minister, mr. Elwood, had a meeting with tunisia officials yesterday is that correct. I had a meeting with the tunisian Prime Minister, and the foreign minister in brussels he was invited to attend the foreign affaired council in brussels yesterday. They must on obviously be disappointed but the Prime Minister very graciously said yesterday again in the Foreign Affairs council that he recognized why we would have to do that and he respected the decision that we had made and that tunisias response is not to sulk about it but to work with us to try to create the conditions in which we would be able to review that advice as soon as possible. And i would like to place this on the record we have an extremely constructive relationship with the tunisians at political level, at working level in the security and intelligence agencies and the police and we have found them very willing to engage with our experts and very keen to build their capacity. Have you given any consideration as to giving assistance to the tunisians government to try to help them through this difficult time. Yes. We are providing Technical Assistance to the Security Services both to help them with the investigation into the attacks as you would expect, but also to help them build their capacity more generally, to ensure that their detention and interrogation processes are fully kpliebt with hume complaint with human rights requirements which in turn enables us to share intelligence with them. We have undertaken the use of some of our sophisticated assets to gather intelligence that will be of use in the ongoing investigation. Were also working with our e. U. Partners on a package of economic support for tunisia, recognizing that the tunisian economy has been significantly impacted and i think fedderica mow halliney announced they are working toward a package in the increase in olive oil quotas to the e. U. Which will provide immediate and welcome relief to the Tunisia Foreign Exchange Challenges they are facing. Thank you. Mark. Im going to invite colleagues. Ive given ten minutes and we can invite colleagues to range a wide mark. We have talk gad hour but there is no mention of an important player and that is israel. As far as the iranian deal was concerned, israel made it quite deal they werent happy and im interested on the discussions you had following deal when you went to tel aviv. And also israel generally seems quite detached from being a constructive partner with the International Community in many ways and probably only looks to the u. S. In some ways and having said that, its relations particularly with president obama are very bad at the moment as well, how do you feel that israel could be persuaded to be more constructive in the International Engagement and how do you feel as well that the International Community ought to really say to israel that its activities in the settlements and in particular in gaza has got international condemnation. Well i think israel heard the last message loudly and clearly, including regularly from us. This government is a friend of israel. Were a staunch supporter of israels right to live in peace and security and to defend itself but we are also quite prepared to speak up when what israel is doing is unacceptable and ive spoken out and the Prime Minister has spoken out against the settlement policy and consistently urged israel to engage with the needs of the population in gaza in a much more proactive way. But to answer your first question, yes, i went to israel last thursday and got a clear and distinctive message that Prime Minister netanyahu was not pleased with the deal that we signed in vienna. I did suggest the Prime Minister, as i suggested in parliament on tuesday, that there was no realistically deliverablely nuclear deal with iran that israel would have endorsed. And i think the reality is that the israelis still think there is a last chance of possibly derailing this deal by lobbying action in the u. S. And so long as were in the 60 day window that congress has to consider the deal, i think you will see israel maintaining a hostile position and lobbying aggressively mainly in the u. S. But also elsewhere. Once that lobbying effort has failed, as i expect it will, i would then expect the israelis as they usually do to be pragmatic and to engage, to try to make the best of what they see as a bad deal. And that means making sure that the commitments iran has entered into are delivered and that that delivery is properly policed and enforced. And i hope in time that we can persuade the israelis that the possibility of a dividend from greater iranian engagement in the region can be a positive. I fully understand why israelis are skeptical about this. They see iran through the prism of a nation which has repeatedly denied israels right to exist and which funds organized terrorist organizations who repeatedly attack Israeli Citizens and israeli interest so i understand their skepticism. But i said to Prime Minister netanyahu that frankly the alternative approach to containing iran which weve been practicing for the last decade has not delivered a cessation of that behavior and going on doing it expecting to get a different result is frankly not likely to happen. We need to do Something Different, we need to take we need to be prepared to take a little bit of risk in engaging in more with iran and see if we can persuade iran that it is in its interest to moderate. We wont totally change its behavior in the region but to moderate its behavior in the region. Two last questions. Good afternoon foreign secretary, thank you for your initial re