>> sreenivasan: all that and more on tonight's pbs newshour. >> major funding for the pbs newshour has been provided by: >> you never discriminate. you want everyone -- the young, the old, the soft and the strong -- but cancer, we're fighting you with immune therapies and genetic testing, with laughter, with strength because every one of us is doing one thing only -- making cancer history. >> xq institute. >> lincoln financial-- committed to helping you take charge of your financial future. >> and by the alfred p. sloan foundation. supporting science, technology, and improved economic performance and financial literacy in the 21st century. >> supported by the rockefeller foundation. promoting the well-being of humanity around the world by building resilience and inclusive economies. more at rockefellerfoundation.org >> carnegie corporation of new york. supporting innovations in education, democratic engagement, and the advancement of international peace and security. at carnegie.org. >> and with the ongoing support of these institutions: and individuals. >> this program was made possible by the corporation for public broadcasting. and by contributions to your pbs station from viewers like you. thank you. >> sreenivasan: police are again under scrutiny tonight over the deadly use of force against minorities. that's after the second fatal shooting in as many days. this time, it happened in the town of falcon heights, minnesota, just outside st. paul, the state capital. >> he didn't deserve to die! (cheers) >> sreenivasan: emotions ran high outside the governor's mansion in st. paul this morning. >> why do we have to keep saying we're human? it's time for us as a people to collectively come together and begin to work together on these issues unafraid, not fearing anything or anybody and working until justice comes. >> sreenivasan: in this latest incident, an officer shot 32- year-old philando castile in his car after pulling him over for a broken tail light. castile's girlfriend, diamond reynolds, then livestreamed the aftermath on facebook, with her young daughter in the backseat. the victim could be seen bloodied and slumped in his seat, as reynolds narrated that castile was legally carrying a gun. >> he's licensed to carry. he was trying to get out his i.d. and his wallet out of his pocket and he let the officer know that he had a firearm and he was reaching for his wallet and the officer just shot him in his arm. >> sreenivasan: more and more people viewed the chilling video overnight, and hundreds of protesters gathered outside the governor's mansion in st. paul. by morning, governor mark dayton, a democrat, announced he's seeking a federal civil rights investigation. but to many in the crowd, including the reverend danny givens, those words rang hollow. >> you keep telling us you're going to do something! i sat at the table with you! i just want you to put some action on it! put some respect on our people's names! that's all i want. i just want it to be real. >> sreenivasan: castile's girlfriend was also at the rally, and directed her frustration at police. >> they did not check for pulse on the scene of the crime. they did not make sure that he was breathing. they instantly rushed their colleague off to the side where they comforted him. would this have happened if passengers were waiting, i don't thinks. i'm forced to think this kind of racism economist. >> sreenivasan: police officials did not identify the officer except to say he's been on paid administrative leave. friends and family of philando castile spoke of him kindly. a black lives matter sign hung today and a protest was at the governor's mansion. >> enough is enough! our community needs to hear from everybody in the community that this isn't >> our community needs to hear from everybody that this isn't ok and we need to make sure that all lives matter and you know it was just a traffic stop and if things escalate but maybe this could've been prevented. >> he was just so patient and even when kids were coming in late and dropping trays well getting jammed in that line you know i watched him and he was just so patient and calm with the kids. >> sreenivasan: the minnesota shooting came just one day after a white officer in baton rouge, louisiana fatally shot alton sterling outside a convenience store. as protests continue, louisiana's governor has asked for a federal civil rights investigation into that killing. and at a house hearing today, a leading black congressman urged f.b.i. director james comey to take action. >> i am a lawyer. and i know how important police are and i know there's so many great folks, but mr. director, if you do nothing else in your 2,000 plus days left, you have got to help us get a hold of this issue. it is so painful i can't even >> sreenivasan: in his own statement, president obama said the killings show again that there's a "serious problem" in relations between police and minorities. we'll explore the issue of police killings of black suspects, in greater detail, after the news summary. >> woodruff: in the day's other news, the latest trial began in baltimore for police officers charged in connection with the death of a young black man. freddie gray had his neck broken while riding in a police transport van last year. lieutenant brian rice is the highest-ranking of six officers charged. he's accused of manslaughter and other crimes for not making sure gray was using a seat belt. two other officers have been acquitted, and another trial ended in a hung jury. >> sreenivasan: house republicans have indefinitely put off any vote on gun control legislation. a number of news outlets reported today it's unclear when party leaders can win over enough conservatives to pass their gun and anti-terrorism bill. meanwhile, democrats spoke one- by-one on the floor. they held photos of people killed by guns, and demanded a vote on tightening background checks for gun buyers. >> woodruff: the political drama over hillary clinton's e-mails played out on capitol hill today. at a congressional hearing, f.b.i. director james comey defended the decision not to recommend criminal charges in the case. and house speaker paul ryan confirmed he's asked the director of national intelligence to bar classified briefings for clinton, once she becomes the democrats' presidential nominee: >> the director of the f.b.i. just said that hillary clinton recklessly mishandled sensitive classified information. and in three weeks when she comes out of the convention, she is going to get unfettered access to the most sensitive classified information our government has? no way. >> woodruff: we'll have a full report on today's house hearing with f.b.i. director comey, later in the program. >> sreenivasan: there's word that senator bernie sanders is finally ready to endorse hillary clinton for president. democrats have been pressing sanders, and the newshour has confirmed the announcement will come tuesday. meanwhile, donald trump spent today in washington, trying to reassure congressional republicans. he met with members of the house and senate, and some, including several who had criticized trump, said they were encouraged. >> i wanted to see him do two things: cast a vision and then contrast himself with the democrats flawed candidate. and then thirdly have fewer unforced errors and fourthly raise some money. >> and so you feel better after today? >> i do. >> sreenivasan: but trump's meeting with senators became heated when he attacked critics and warned they'd lose re- election. one of them, jeff flake of arizona, is not actually up for re-election this year. he said the exchange did nothing to win him over. >> yeah it was a bit tense. >> why? >> i wanted to talk about a few of the concerns we had and did. i mentioned in there that i'm not in the never trump movement i want to support our nominee i really do but given some of the statements that have been made i'm finding it difficult. >> sreenivasan: trump also reportedly called illinois senator mark kirk "a loser". later, kirk branded the candidate a "wealthy bully." and a spokesman for nebraska's ben sasse said given the choice of trump or clinton, the senator believes "this election remains a dumpster fire." >> woodruff: in iraq, the death toll from sunday's bombing in baghdad soared again today. iraq's health ministry reported a total of 292 people have now died as a result of the islamic state attack. the bombing devastated a busy market in a mostly shiite neighborhood. in addition to the dead, more than 200 were wounded. >> sreenivasan: islamist militants also struck again in bangladesh, attacking police at a festival marking the end of ramadan. four people were killed. last week, an assault on a cafe in dhaka, the capital, left 28 dead. the islamic state group claimed that attack. >> woodruff: britain may be on the verge of having its first female prime minister since margaret thatcher was ousted in 1990. ruling conservatives narrowed the field for the leadership of their party today to two: interior minister theresa may and andrea leadsom, who helped head the campaign to leave the european union. a final decision is due by early september. >> sreenivasan: and, wall street struggled, after crude oil inventories came in expectedly high, and oil prices sank. the dow jones industrial average lost 22 points to close below 17,896. the nasdaq rose 17 points, but the s&p 500 dropped about two. >> woodruff: still to come on the newshour: police shootings in the spotlight. the f.b.i. director takes republican heat over his handling of hillary clinton's email server. estonia/nato exercises in a nation under russian threat, and much more. >> sreenivasan: the police shooting of an african-american man in minnesota, and the disturbing live video that captured part of the aftermath, led to another day of anger, distress and serious questions. among them: why was lethal force used. how police respond to situations and the growing impact of video and social media. we explore this with jelani cobb, a staff writer for the new yorker. his latest project is a "frontline" documentary called "policing the police." david klinger is a criminal justice professor at the university of missouri st.louis, and a senior fellow at the police foundation, and issie lapowsky a staff writer at wired magazine. jelani, let me start with you. like thousands if not millions of people today, you saw the video. your initials reactions? >> it was just abject horror. it was an amazing thing to see someone able to maintain their composure in the face of just the most horrible circumstance that we could imagine, and to think this happened just in the span of 36 hours after the previous video of someone who died in an incident with the police, it honestly was a lot to process. >> sreenivasan: david klinger, your reaction? >> the video out of minnesota is one of the most compelling things i've ever seen. i follow up with what the other gentleman just said about trying to process it in terms of her composure, the fact that her daughter is there, her daughter comforting her later on, the video opening with the gentleman bleeding, obviously being shot, the officer shouting. it was very compelling and very disturbing. >> sreenivasan: david, staying with you for a second, there are thousands if not hundreds of thousands of traffic stops every day and police around the country figure out a way to never get anything to escalate to this level. what's failing in these cases? what's the training on a basic traffic stop? >> well, basically, walk up and identify yourself as a police officer, ask for drivers license, registration, and then you move from there. in this situation, as i understand it, the driver told the officer that he had a ccw permit, carry concealed weapon permit, and it devolved from there, and trying to understand how it got to that point is going to be the nub of the investigation. because the video starts after the shots have been fired, we don't know what preceded it, and, so, i say we just need to wait and see what all the rest of the evidence is regarding what happened in terms of pulling the trigger. >> sreenivasan: issie, you wrote today this live streaming was almost like a 911 call in the context of police abuse. >> sure. when you're on the other side of police brutality or police shootings, you can't call the police, which is the natural instinct most people have when you're in an emergency situation. so now social media has really become this lifeline for people. it's not only there to document it so we can see what happened after the fact, but in that moment, in that video, you can see diamond reynolds is really calling out for help in that moment because she doesn't know where else to turn. >> sreenivasan: jelani, the idea that woman was literally giving out her address, trying to get people to come to her, is this a sign there is a vacuum in some ways that law enforcement, the department of justice, when they do these investigations, there is still a failure there that there cannot be that accountability that someone can turn to? >> certainly. and, you know, we've seen this again and again and again in a systemic way. you know, to the bigger point that's here is also something about the gun culture in the united states, wherein we've seen the response to, you know, mass shootings and total sum of homicides in this country and, in the face of that, a really recalcitrant inassistance -- insistence on a fundamentalist version of the second amendment, yet this person was guilty of nothing more than taking the second amendment at face value and identifying himself as a registered weapon holder and it results in him being killed, fatally shot. so i think it sends a message here that these principles are really not made with us in mind, they don't apply to us. >> sreenivasan: david klinger, governor mark dat dayton said ot loud today that basically would this have happened if the driver or passenger was white? and the governor says no. what's the training police have when it comes to racial profiling, something that the whole country is sensitive about these days? >> there's a lot of training that's been going on around the country. the united states department of justice is putting on an implicit bias training for all federal agents, as i understand it, and, so, it's something that is ongoing. but i would challenge the governor's position. he knows nothing about how this situation went down. he's not privy to the investigative case file. the investigation is still ongoing. to say that it was a racially-based shooting, we have no idea at this point. it may well be, but we don't know that at this point and the evidence that we do have in terms of the statistics that we do have indicate in fact the majority of people killed across the country by united states police officers are white people. >> sreenivasan: david -- go ahead, janly. >> also, that's misleading to frame it in that way. certainly, we should be very cognizant that the majority of the people killed in this country are white, also the majority of the population is white. when you look at this in terms of population share, a proportionately smaller number of white people in the general population killed by police and a generally proproportionately higher number of colored people are. immediately we say, well, there are higher crime statistics among people of color, but even when dealing with unarmed individuals, there is still a disproportionate number of people of color killed. >> sreenivasan: in the last two years, 2.5 times as many african-americans killed as white people. issie, i want to bring this to you for a second. did the videos change something? when i saw it last night, i almost found it impossible to believe that it was true, and then all of a sudden, as it was rolling out, there were different feelings i was having. >> i think this video cuts really deep. you have a man there dying in the drivers seat, his girlfriend is sitting next to him suffering, you have the police officer yelling out these barbaric screams, you have a little 4-year-old girl who just witnessed a murder suddenly comforting her mother. it's impossible not to be sympathetic. so there's a lot of conversation about whether these videos should immediately be published, and i think that's -- we have to decide as a society whether we, you know, want to protect these delicate sensibilities we have, or whether we want to let these stories be shared in full, aside of the story that historically has not been shown and the value of social media has always been allowing people to go direct to the public and sidestep the mainstream media and, so, yes, i think it is changing things. >> sreenivasan: what about the possibility of a desensitizing effect, the fact we're talking about two videos in such short succession over time, discuss it become almost like a drum beat and ultimately change the equeetion? >> wellwell, i don't know. many communities have talked about this and were not believed. so at the very least, we now have some sort of documentary evidence of what is happening. as far as desensitizing, the majority of the population has been desensitized to the suffering of this community since the inception of this country, and so i don't think this is going to somehow or another make someone that is concerned about these issues look askance and say i can no longer countenance what's happening. >> sreenivasan: david klinger, video seems to be a realty of what every police department has to deal with, whether their body cameras and the chain of custody of the video throughout the process, or as we now see, more often than not, after the initial moment of the incident, someone, a bystander or in this case part of the victims are actually turning to social media to turn this on. so how do police departments around the country kind of brace for this, prepare for this? >> what they should do is they should be telling all their officers to assume that you are being videoed, even if you are not wearing a body camera or you don't have an in-car video that's working and to, therefore, act appropriately, just as another check to remind officers to do the right thing. one of the things that's frustrating to me is there is still some police agencies out there that don't understand that citizens have an absolute lawful right to go ahead and video and audio record them when they're in public space. the only issue is that we have to negotiate or explain to people what the rule set is going to be about not interfering, and i think that that's the next thing that people are going to have to understand, there's a time and place to step back and take that video. you shouldn't be introducing yourself into the event itself. i've got friends who are police officers who say that a sizable number of times when they get out of their vehicle, a crowd will surround them and try to egg them on so they can get a better clip to put up on youtube. so i think we better figure some stuff out here. but police agencies shouldn't be worried about the fact the public is monitoring them from video and audio recordings. >> sreenivasan: david klinger and generall jelani cobb, thanko much for joining us. >> thank you. >> woodruff: we turn now to another high-profile story of this day where the u.s. justice system is being questioned. lisa desjardins reports. i'm here because we're mystified and confused. >> immediately republican chairman jason chafe its of utah challenged f.b.i. director james comey over whether the bureau let clinton off easily. >> it seems to a lot of us that the average joe, the average american, that if they had done what you laid out in your statement, that they'd be in handcuffs, and they might be on their way to jail and they probably should. and i think that there is a legitimate concern that there is a double standard. >> reporter: but over five hours of testimony, comey insisted his agency was right to recommend no charges. recommendation was made the way you would want it to be, by people who didn't give a hoot about politics but who cared about, what are the facts, what is the law, and how have similar people, all people, been treated in the past. >> reporter: still, other republicans, like south carolina's trey gowdy, pressed the f.b.i. chief on whether clinton's previous statements about the emails were true. >> secretary clinton said 'i did not e-mail any classified material to anyone on my e-mail, there is no classified material.' was that true? >> there was classified e-mail. >> secretary clinton said she >> secretary clinton said all work-related e-mails were returned to the state department. was that true? >> no. we found thousands that were not returned. >> reporter: comey argued insisted that what clinton did may well be have been worth some kind of punishment, but not prosecution as a crime. >> so should have known, must have known, had to know does not get you there. you must prove beyond a reasonable doubt that they knew they were engaged in something unlawful. >> reporter: he drew a distinction with a similar case, that of general david petraeus, who agreed to a plea deal in 2015 over mishandling classified information. have obstruction of justice, misconduct, that's a perfect illustration of case that we'd prosecute. >> reporter: while republicans argued that the lack of charges was political, committee democrats contended the politics were all in the hearing itself. >> despite your impeccable credentials, republicans have turned on you with a vengeance, >> your recommendation not to approve criminal charges against secretary hillary clinton. >> hillary clinton stayed off the campaign trail but her press secretary said today's hearing knocked down republican falsehoods and shut the door on conspiracy theories about the e-mails once and for all. house speak. but house speaker paul ryan believes the case is not closed >> right now, there are still far more questions than answers regarding the investigation of secretary clinton. >> reporter: the nation's top republican asked for all unclassified documents in the investigation to be released, for the pbs newshour, i'm lisa desjardins. >> sreenivasan: tonight our series from eastern europe, "fault lines," takes us to estonia. unlike ukraine, where we spent the last two nights, estonia is a member of nato, one of the alliance's smallest countries, but among its most committed members. today estonians say they need nato more than ever because their fears about a resurgent russia are the highest since the country gained independence when the soviet union collapsed 25 years ago. with the help of the pulitzer center on crisis reporting, special correspondent nick schifrin begins our report in the city of narva, literally a stone's throw from russia. >> reporter: welcome to the friendship bridge, even though things here aren't very friendly at the moment. behind me is an estonian castle from the middle ages. this is estonia's easternmost border, the narva river. which means it's the border between nato and the e.u., and russia. this has been called nato's most sensitive border. ivan the terrible built the russian castle. and of the last 300 years, russia has occupied estonia for 250. >> we said, "never again." >> reporter: 51-year-old brigadier general meelis kiili commands the estonian defense league, the equivalent of the national guard. he met me in the occupation museum, surrounded by artifacts of the soviet union's occupation that began in the 1940s. >> me and my father were listening every night. there was a voice of america that reached out behind the iron curtain. >> reporter: when you look at today's russia, do you see echoes of what we are looking at around us? >> i remember the joy when we regained our independence. the message is clear, we are going to defend our liberties, our country and our pride. >> reporter: to defend the country, all estonian men are conscripted. but the army has only 5,000 active duty soldiers. so the 15,000 volunteers whom general kiili commands, are the tip of the country's spear. >> i would like my child will also be in free estonia. not, as i was born, in occupied estonia. >> reporter: 51-year-old toomas värva spends his weekends training as a sniper. his day job is c.e.o. of a textile factory. >> you see what happened in ukraine. you have to be ready for that. >> reporter: estonians watched in horror as crimeans celebrated russia's annexation, and russian soldiers helped destabilize eastern ukraine. they fear estonia might be next. across the border russia launches military exercises with as many as 80,000 soldrs. nearby, sweden's hunted for russian submarines believed to have operated off its coast. and russian jets have buzzed american warships. >> when crimea started, several friends of mine, family members asked, "hey, is it time to pack up our families, put them on ships, somewhere safe place, and get ready for war?" >> reporter: 42-year-old lt. col. jaak tarien commands estonia's air force. >> my grandfather was an officer in the estonian army before war and he was deported to siberia, never to come back. i hope that we can deter russia from ever making a big mistake again. >> reporter: deterring the bear requires a lot of backup. tarien commands an air force with no jets. he relies entirely on nato and u.s. firepower. >> if russia wanted to, they could come through very, very quickly. and so our response time must be much, much faster now. >> reporter: 32-year-old christopher moore trains apache pilots based in germany. for 15 years he taught counter- insurgency for iraq and afghanistan. russia's annexation of crimea changed his training overnight. >> the pilots coming out of flight school now, we are immediately building this idea of how to fight the disciplined fight. >> reporter: translation: after a quarter century of looking elsewhere, nato's refocused on its original enemy. >> when i started this 27 years ago, we were trained to fight the soviet union. >> reporter: col. john meyer commands the 2nd cavalry regiment. during the cold war, the second cavalry guarded the iron curtain. today, his troops his men are deployed in half a dozen countries behind the curtain. >> what has changed over the last 27 years is that there are nations now in eastern and central europe that have volunteered to join in the alliance. >> reporter: after crimea estonia invited the u.s. to deploy 150 soldiers, and hold increasingly large exercises, like this one. tomorrow, nato will announce the deployment of a new, 700-soldier unit to estonia. >> so it's that commitment of a unified alliance with 28 nations-- that is what deters. >> reporter: but after britain voted to leave the european union, estonians worry about european fortitude. and they fear the possible impact of presidential candidate donald trump. >> we are protecting them and they are getting all sorts of military protection and other things, and they're ripping off the united states. and they're ripping you off. >> reporter: trump's criticism is economic. in the early 1980s, the u.s. accounted for half nato members' military budgets. today, the u.s. accounts for three quarters of those budgets. >> either they pay up, including for past deficiencies, or they have to get out. and if it breaks up nato, it breaks up nato. >> we cannot allow this very successful alliance to fall apart because in one case we don't want to do anything. >> reporter: toomas hendrick ilves has been estonia's president for nearly a decade. nato's article 5 says if estonia were attacked, the united states and every nato country would be obliged to go to war with estonia's attacker. >> if that political will is missing in one case then the entire enterprise falls apart. >> reporter: why should americans who are skeptical about spending money on the military in other places care about estonia? >> it's about the american values. it is important for the better world in the future that estonia stays free and democratic country and democracy spreads east from here, instead of vice versa-the tyranny spreading west from here. >> reporter: why is this important that you are training for this threat? >> if we continue to sit back and watch one country fall, and then another country fall, they are literally talking all of europe. and now literally the only thing they have left is the u.s., but now they have the resources of all those other countries. it's a dangerous mindset to be passive and just sit back. >> reporter: estonians argue, unlike the vast majority of nato members, they meet the military spending requirements. and when the alliance has called, they've answered. >> article 5 has been invoked once and that was by the united states and that was in the wake of 9/11 in which we went to afghanistan, we were smack in the middle of taliban land. so we did it, we did our duty. >> reporter: is the end of that sentence that, you came to the united states' aid, you would expect the united states to come to your aid? >> we came to-- we fulfilled our nato obligations and we would expect nato to fulfil theirs. >> reporter: back in narva, along the russian border, the soviet war memorial serves as a warning. in crimea, russia claimed authority to intervene on behalf of ethnic russians. and more than 90% of narva is russian speaking. when you come up here and see this view, what do you think? 14-year-old igor shirai is the son of a russian mother and estonian father. from the castle, there is no sign of tension. igor and much of this town wants to keep it that way. >> these provocations from both, from both sides, they're pretty much useless, because it just grows the tension, raises the tension even more. >> reporter: that's because narva feels calm and estonians have it pretty good. they make more money than their russian neighbors. their children can work across the e.u. that stability and prosperity keeps russian speaking residents, pro- european. >> ( translated ): this region economically is quite well off and self-sufficient. >> reporter: judging by the office of 62-year-old vladimir petrov, he's a russian nationalist. you have the magnets of putin, newspaper, it seems like you're pro-russian. >> ( translated ): when i receive older people, they are familiar with all this. it's very dear to them. it makes them feel at home. >> reporter: he is the chairman of the union of russian citizens in estonia. but even he wants his love of russia to remain a long distance relationship. russia could very quickly come in. would the people of narva welcome that? >> ( translated ): the daily life that's continuing here is nothing like military intervention, and no one is hoping for that. >> reporter: so estonia's deterrences are economic enlargement and military might. for both to work, they need a robust european union and nato. without those alliances, nato's most sensitive border, could become its most vulnerable. for the pbs newshour, i'm nick schifrin in narva, estonia. >> sreenivasan: tomorrow in our final story, nick will look at nato's biggest buildup in europe since the cold war. >> woodruff: stay with us, coming up on the newshour: the ominous future of cyber- warfare. and jim gaffigin's take on the changing world of comedy. but first, it has been a rough couple of weeks in britain since the country voted to leave the european union. the pound dropped to its lowest levels in more than three decades, and the european markets have taken hits over concerns about the economic impact. tonight, we get a longer view, and a less alarmed one, about what it means for global banking and financial stability. our economics correspondent, paul solman, filed this report from across the pond, part of his weekly reporting on "making sense" of financial news. >> reporter: mervyn king, the former head of the bank of england. in his new book, "the end of alchemy," king still worries that the world banking system hasn't reformed itself, eight years after its excesses led to collapse. >> thames, the old man river of britain, been here forever, rather like money and banking, we've always had them. >> reporter: as it happens, he was giving me a tour of london to make his case on the day of the brexit vote. the odds makers, the markets, and i at least thought britain would remain in the e.u. as we passed a group of upbeat "remainers" i thought: no problem. >> counting is under way of tens of millions of votes. >> reporter: then came the result. >> and the answer is, we're out. >> reporter: so before asking you to take the tour, we checked back with king to see if the vote had altered his analysis. >> we didn't talk much about the brexit vote because actually the brexit vote isn't germane to the fundamental challenges dealing with our banking system and putting it on a sound footing. we were talking as we walked around london about the really important long-run issues affecting our economies. >> reporter: look, king says, when you take the long view, the global financial system needs the same fixes it did before brexit; he believes his tour of london finance, therefore, is as relevant as ever. >> this is lombard street, the title of walter bagehot's great book in the 1870s about how to ensure that banking crises don't occur or how to respond to them and this was the place where finance houses were situated, the early coffee houses which turned into banks and trading houses and the heart of the city of london. and his idea was that people who worked here would just be able to walk across the street to the bank of england, give the security, the collateral they had to the bank of england. bank would lend them money, they'd rush back and pay off the creditors and depositors who wanted their money back. >> reporter: central banks exist to be lenders of last resort. problem: too big to fail. and that's what began happening in england, just like america, in the '80s and 90's. >> so here we are now in the modern docklands area. so this is where the banks came to trade. all the derivative instruments, cdo squared, all the complex instruments, they were traded down here. >> reporter: and is a large part of the problem that crystallized in the crash of '08, because people like yourself, the bank of england, the fed in the united states, couldn't keep up with the innovation that was going on in places like this? >> i would put it differently, i think there were two things that were going on. one was that because interest rates were falling throughout the world, asset prices were rising, trading looked very profitable and therefore the leverage of the banking system rose very sharply. >> reporter: "leverage" meaning the ratio of the bank's own money to the money it "borrows" in the form deposits or short- term loans. >> so that made the banking system more fragile. the other thing was that what proved very difficult, and it's always going to be very difficult, is that businesses or particular methods of financial services that keep making money year after year. are they making money because they are just good ideas and they are very successful or are they making money because they are very risky and are just on the edge. >> reporter: but people must've realized that was happening so how come regulation didn't adapt to the changing environment? >> it's easy with hindsight to look back and say, oh these regulations turned out to be inadequate because it turned out the mortgage lending, for example, was riskier than was thought beforehand. but that's the problem of thinking in advance that you've got a detailed system that works, and then you think, oh that will work, then you discover it doesn't. and you do need something much more robust and more simple to prevent i think the same problem from happening again. >> reporter: so king has two proposals for preventing another crash. >> so this now is the bank of england. this is the building which has been the home of the central bank since the early 18th century. >> reporter: and this is where you were in 2008? >> yes, i was on the ground floor because the governor's office is on the ground floor and this is where the banks would come in to meet with us regularly and where they would say, we need a lot of money. >> reporter: and the whole point of your book-- >> --is to make sure that we don't have as frequent or as damaging a banking crisis as we saw in 2008. >> reporter: king's first proposal is that banks insure themselves against catastrophe by making enough safe, secure loans so they have assets of real value to pledge to the central bank if they need a cash infusion in a hurry. >> yes, so that when there is a run on the bank and depositors lose confidence for whatever reason, it is perfectly acceptable for the central bank to pay the cash to the banking system as a short term loan. >> reporter: king's second proposal is also simple: force the banks to keep enough cash on hand to cover loans gone bad. >> banks did not have enough equity finance. >> reporter: so when you say equity you mean the cushion of the bank's own money. >> yeah, the shareholders' own funds which are available to be able to absorb losses without defaulting on the loans which banks have taken out, whether from other bits of the financial sector or from you and i as depositors. when a bank fails to be able to return money to its depositors or other people from which it's borrowed, then the bank fails and you get into a problem of potential default. >> reporter: the last question i asked king the day of the brexit vote was this: in how much danger is the world banking system at the moment? on a scale of 1-10, i added. >> i think in terms of the current immediate problems you know only 3, 4 or 5 but if you were to say to me, do i think we are going to avoid a serious problem in the next decade?, then i think the answer is probably not. that is much more like 7 or 8. >> reporter: and does he still give the same scores, now that the u.k. has voted to exit the e.u.? >> i don't think the vote makes any significant difference to the risks facing the global banking system. there were and are significant risks in that system because of the potential fragility of our banks, and because of the state of the world economy. but i really don't think the brexit vote itself really makes any significant difference. >> reporter: as, he adds, it may not make any significant difference to the long-term future of europe's economies, despite the chop in the currency and stock markets at the moment. >> economies have a habit of being pretty resilient in the longer run. when people and countries want to trade with each other they find ways to do so. and i'm sure that will happen now. >> reporter: this is economics correspondent paul solman, reporting from the u.k., and now, from back in the u s of a. >> sreenivasan: now, a new documentary lays out a sobering view about the use of cyberwarfare, a future that's accelerated since intelligence agencies sabotaged iran's nuclear program. the film, called "zero days," opens in more than a dozen cities tomorrow and will be available online. its director stopped by as part of the recent "a.f.i. docs" festival. jeffrey brown has our conversation. >> brown: the 2010 cyberattack on an iranian nuclear facility, the first question is what exactly was this sophisticated weapon, the second who created and carried it out and in the year since many new questions have arisen about cyberwarfare and the new world we live in. the documentary "zero days" pulls together what happened. alex gibney, fillmaker of numerous films, joins me. welcome. >> thank you. >> brown: why was this a subject you wanted to tackle? >> seemed like it was a story that was about the internet and the militarization of the internet but was not properly understood and i certainly didn't understand it so it made me want to dig in. >> reporter: remind us what stuck net was and how you figured out a way to capture it. >> stucks net was a piece of malwear self replicating so you didn't have to click on it for it to spread from computer to computer but it was unique in the sense that it crossed the threshold from the dyber realm to the physical realm and introduced to the iranian nuclear facility and took over the machines that controlled the centrifuges and caused them to spin wildly out of control until they blew up. interestingly, it had an oceans 11 kind of component which relayed a messageo the engineers that all was well, so it sowed tremendous doubt in the minds of the people. >> brown: the beginning first part of your film is this detective story, you go to cybersecurity experts and i want to show a clip where two of them are trying to figure out what it is and what it might be aimed at. >> it spread to any windows machine in the entire world. we had these organizations inside the united states who were in charge of industrial control facilities saying we're infected, what's going to happen? >> we didn't know if there was a deadline coming up where the threat would trigger and suddenly turn off all electricity plants around the world or start smovg things down or mounting some attack. >> we knew stucks net could have dire consequences, and we were very worried about what the pay load contained and there was an imperative speed that we have to race in trying to beat this ticking bomb. eventually, we were able to refined this and saw iran was the number one affected country in the world. >> that immediately raised our eyebrows. we had never seen a threat before where it was predominantly in iran. >> brown: how do you capture something like this? these aren't bombs at go boom. these aren't things that we can see. this is the digital world. >> we have three approaches that helped us tell the story. one is we had two detectives. it became a detective story. our two detectives were the cybersecurity experts from symantec and they led us through the weaponry a step at a time so it revealed things like a detective story. two, we worked in partnership with a great special effects and graphic company called main story. our main character is a piece of code but we made it live and breathe as if you were inside it an used elements to have the role code so it's 100% accurate in how we portrayed it. the last thing is we had a number of people who came forward to reveal information that was of a shocking nature. to protect their identity, we came up of a means of cybergenerated character who spoke their words. >> brown: one of the running themes throughout the film was secrecy. >> i don't answer that question. can't comment. don't know how to answer that. >> two answers, i don't know and if i did we wouldn't talk about it anyway. >> brown: no one wants to talk about this. >> that's right. >> brown: and that's the nature of this new weapon system you're up against. >> i think it goes beyond it. we can all accept a certain amount of secrecy, particularly when you're protecting agents in the field and when human life is at stake, but i think, in the case of cyber weapons, we have a whole new generation of weapons, a whole new kind of warfare practiced in the field, both by us and against us, yet we're not allowed to talk about them. people at a very high level won't even admit that there was, a, a stucks net, that the u.s. and israel were involved and thirdly that we're using these offensive cyber weapons routinely and they're also used on us, that, it seems to me, was a really big problem. >> brown: some people would argue that the program, stucks net, in particular, achieved it's purpose at least in the sense of brig iran to the negotiating table. >> the stucks net worm did accomplish a very targeted short-term goal, but in its release -- and we tell the story of how and why it was released into the world -- it started a new arms race that has destabilized the world that it was intended to secure. >> brown: and to that end, in the last part of your film, you have various experts talking about the potential uses against us of these cyber weapons. how fearful, in other words, are you after watching? >> well, i'm fearful because i don't think that the current administration or the the previous administration have taken seriously enough the need for a kind of international regulatory system the way we have with nuclear weapons and, furthermore, they seem to be emphasizing deterrents through secret offense rather than defense, and they're not telling us about the dangers. you know, recently, for example, there was a shutdown of the ukrainian electrical grid or a big part of it, and we're pretty sure that it was the result of russian malwear, a kind of new hyper version of a stucks net. well, that could happen at anytime with us, and nobody's more vulnerable than we are because we're so deeply connected via the internet. it's particularly disquieting because we're not allowed to talk about it. >> brown: the new film talks about it, "zero days," alex gibney, thank you very much. >> thank you. >> woodruff: next, to our brief but spectacular series, where interesting people talk about their passions. tonight, we hear from actor and comedian jim gaffigan. he is the star of the jim gaffigan show which airs sunday nights at 10:00 p.m. on tv-land. he has become one of the most universally appreciated voices working in comedy today. gaffigan speaks to us now about where his observational storytelling began. what's the most common thing people say to you on the street? >> are you brad pitt. middle clas♪ >> i was raised to seek security. my parents were children during the depression, and security was wearing a coat and tie. the irony is that my brothers and sisters that are bankers have less job security than me, and i tell diarrhea jokes. i knew probably similar to how somebody when they first try heroin -- this is pbs, by the way -- they know their life has been changed and that's how i felt when i was on stage making fun of myself. standup comedy changed dramatically with the success of comedy central and youtube. when i started, there were people that were comedians but there were much more of a riffraff of society, like the people who really couldn't afford therapy went into standup. i was kind of an oddity, being this superben -- durbin, college-educated kids, now i think that's the norm. essentially, the diversity of comedy has been ruined. any creative person will tell you you're supposed to write about things you're passionate or embarrassed about. food is a very passionate and embarrassing thing for me, and it's also universal. i mean, everyone eats. i mean, i just eat a lot more than other people. i curse in every day life, but i'm not going to curse in front of a room full of people. that's not how i kind of feel empowered, by shocking people. i feel empowered by telling them about jesus -- no, i feel empowered by making people laugh. i think a lot of observational humor comes from annoyance. why should we make our bed? we don't tie our shoes after we take them off. why are we dragging a tree into our living room in december like a drunk person? human beings are a rather compliant species, so we go along with things that, after some thought, we might realize are kind of silly. my name is jim gaffigan and this is my brief but spectacular take on being a comedian. >> woodruff: and you can find more from our "brief but spectacular" series on our >> woodruff: you can find more from our brief but spectacular series on our website. that's at pbs.org/newshour/brief. now, an update to tonight's lead story: president obama has just made a statement on the police shootings of black suspects in minnesota and louisiana. he spoke after arriving in warsaw, poland, for a "nato" summit: >> when incidents like this occur, there is a big chunk of our fellow citizenry that feels as if, because of the color of their skin, they are not being treated the same. and that hurts. and that should trouble all of us. this is not just a black issue. it's not just an hispanic issue. this is an american issue. >> woodruff: you can follow our continuing coverage of these and other stories on our web site. as doctors around the world race to end the aids epidemic, tomorrow we starts a series, "the end of aids." correspondent william brangham has a preview. >> brangham: we travel around the world to south africa, struggling to care for more people with h.i.v. than anywhere else. >> these are unprecedented around the world. we have to do something about this. >> brangham: san francisco, which laid out a blueprint to get to zero new cases by 2030. atlanta, the heart of america's epidemic in the south where hundreds still die every year from aids. >> i think i have a better chance of winning the lottery than i have of ending aids where we are today. >> brangham: to a remote island in kenya to see what's working with hard-to-reach populations. and rwanda, once the site of a genocide, now giving birth to a generation free of h.i.v. >> we need a generation of kids who never blame us, who never blame the country. >> brangham: our series on the end of aids starting tomorrow on the pbs "newshour". >> sreenivasan: that's the "newshour" tonight. >> sreenivasan: and that's the newshour for tonight. i'm hari sreenivasan. >> woodruff: and i'm judy woodruff. join us online and again here tomorrow evening with mark shields and david brooks. for all of us at the pbs newshour, thank you and good night. >> major funding for the pbs newshour has been provided by: >> lincoln financial-- committed to helping you take charge of your financial future. >> the lemelson foundation. committed to improving lives through invention. in the u.s. and developing countries. on the web at lemelson.org. >> and with the ongoing support of these institutions >> this program was made possible by the corporation for public broadcasting. and by contributions to your pbs station from viewers like you. thank you. captioning sponsored by newshour productions, llc captioned by media access group at wgbh access.wgbh.org this is "nightly business report" with tyler mathisen and sue herera. high stakes. tomorrow's employment report takes on added importance as investors try to determine whether the labor market is healthy or has in fact lost its mojo. >> milk money. a french yogurt-maker makes its biggest acquisition in almost a decade, and it's putting its faith in the fast growing market for organic food. age discrimination? google has publicly addressed gender and racial imbalance in its workforce. now a lawsuit alleges another issue. all that and more tonight on "nightly business report" for thursday, july 7th. good evening, everyone and welcome. an is high. the release of the monthly jobs report is always