tv The David Rubenstein Show Peer to Peer Conversations Bloomberg September 18, 2021 9:00am-9:30am EDT
david: this is my kitchen table and also my filing system. over much of the past three decades, i have been an investor. the highest calling of mankind, i have often thought, is private equity. and then i started interviewing. i watched your interviews so i know how to do that. i learned from doing my interviews how leaders make it to the top. >> i asked him how much he wanted. he said 200 $50,000.
i said fine. i did not negotiate with him -- he said it 200 $50,000. i said fine. i did not negotiate with him. i did no due diligence. as the head of the european central bank, and enormous impact on the way the european and global economy moves forward. i had a conversation with her about how europe is recovering from the global pandemic and the slowdown in the economy. as we now look at the post-covid environment, but what -- but would you say -- but what would you say is a situation in europe? >> europe is recovering more rapidly than we had anticipated and we have a significantly upgraded projection. our projection for this year is plus 5%.
plus four point 6% year. this year is certainly going faster than we thought to the point where we will have recovered to pre-covid-19 levels before the end of the year. we had anticipated it could be early 2022 at best. david: are you worried about the delta variant impacting what you just said or the so-called mu variant? >> it is related. we are in a situation where vaccination matters and or mislead. on that front, europe has done quite well. we have over 70% of the adult population that is completely vaccinated in the euro area in
excess of 80%. that has been a significant boost for growth and it is helped governments not go back to these stringent containment measures that we had seen previously. david: during cova, or you working remotely? were you running the bank from your home or were you going into the office? >> i have spent quite a few weeks stuck in my apartment during the week of covid. the very sizable package put together for monetary policy purposes was engineered around my kitchen table. subsequently, when things were more flexible and we could move out i went to the office a bit. by default, the solution is
remote working still today and probably until the end of january and then we will see. david: you should take that kitchen table and move it to your office. obviously, it was right -- it was productive. post-covid, do you expect europeans go back to work at the same levels before in terms of going to work five days a week or will people work four days a week, one day remotely or just four days a week? >> first we should acknowledge that there are people who do not have the luxury of choice. their physical presence is required. you think about hospital staff, construction workers, some people working in shops. they have to be on site and showing up. in offices, i think we are heading towards the hybrid movement were part of the week will be spent in the office so
that people can meet and see each other and have face-to-face contact, but the rest of the week will likely be working from home. whether it's 50% 50% or 40% 60% is up to -- is up for debate and should be handled at company levels, i suppose, because most of the legal restraints have been lifted. but people have learned during the pandemic and those learnings will be bundled in and used for the future. david: arounds the kitchen table we just made famous, you put together of package that is designed to solve economic problems as it dealt with covid. in hindsight, would you say the package worked as well as you thought, not as well or better than you thought? >> when we put it together, we
were hopeful that would work. the truth of the pudding is in the eating. it was a matter of days before we really appreciated the message was received. fiscal authorities began to act in tandem and good coordination. i think the impact of next-generation eu when all the europeans decided to go on board together jointly, this entire package actually responded well and fast and big to the unbelievable crisis situation we face. all in all, i think it works well and we responded faster and better than we had in 2008 and 2011 and the european sovereign debt crisis. david: in the united states,
we've had challenges during covid that people who are minorities, often women, people of lower income strata, they could not get access to broadband and they had childcare problems and so forth. it is thought that they felt further and further behind. it did you find the same phenomenon in europe? >> this is been the case in europe as well where inequalities in terms of opportunities, in terms of facilities, have been aggravated and probably exacerbated i covid-19 for the reasons you mentioned. the people most bike -- affected most by the pandemic were women, young people, people on fixed contracts and those were more remote from work than the others. if you look at those who lost their jobs, it is predominantly women and young people in
aggravated inequalities. the third one is climate change where we will have two transition probably faster than we think which will imply transition costs which will imply a change in the overall structure of our economies. i was a those three. implementation, and -- inequality and climate change. david: what has been the impact on the european central bank and the european economy on brexit? is it is bad as some people addicted? >> i think the conclusion varies depending on what side -- on which side of the channel you're on. from our perspective, it is a sad development and we are in excellent corporation with the bank of finland. we tried to continue to maintain a good relationship because we have lots of links between us.
we tried to took -- we tried to continue to maintain a good relationship because we have lots of links between us. in terms of trade, it has been certainly allows for the u.k. more so than for europe. at this point in time, europe is coming out of the crisis without flying colors because a lot of work needs to be done but more strongly than we had expected. the u.k. is having a more difficult time at the moment. david: part of the way that you helped deal with the situation in europe was that you had the package that you referred to, a very large package, financial stability package. but that package really involves countries borrowing money against their own abilities to pay it back. you are not a guarantor, but you're making certain that they will not default. are you worried about too much debt among european countries, france, germany, italy?
or is that not a big problem right now? >> i think all countries around the world increased and had to increase their debt relative to gdp. when you have this high debt increase and a big fall in gdp, you end up with ratios that look higher and are higher than what they experienced before but there was no choice but to do that. had it not happened, i think the story of the pandemic would have been a lot worse than we have seen. now it is a question of directing the financing to the right investment, making sure the economies bounce back in the right shape with the right structural reforms that will improve the productivity of those economies, then will position them to be more digital and to be greener. i believe the next generation eu
, which was voted a year ago now, is going to help with making countries better converge and reduce the gap that existed between some of the southern european countries and the northern european countries, but it has been the intention. david: recently you said he would like to have a goal of getting 2% inflation. why has it been so difficult to get to that level in europe and how confident are you that you can get to 2%? >> i think there are several reasons for that, but certainly what we decided to do was to have a target which was simple, easy to understand, was symmetric, focused on the medium term. instead of having that
complicated, close to below 2% which was a bit uncertain and fuzzy and included, somehow, and implied bias we decided we would go for something straightforward, simple, 2% symmetric. that is the definition that we have agreed upon. we are also on this medium-term which matters most because we are can that's because we are particularly concerned about -- because we are particularly concerned about inflation expectations. that decision was convincing enough so that markets and analysts and observers have appreciated that we are serious. we mean business. we want to percent. there are a lot of sovereignties around the lower bound which leads us -- which leads to us having a more full response in some instances but we need to
percent. -- we needed 2%. david: hundreds of central banks of issued currency used divide things, sell things and so forth and to price assets. now some people have come along and invented cryptocurrencies. central banks are trying to adjust what that means for them. do you think cryptocurrencies are a plus for the global economy or is it too early to tell? >> crypto's are not currencies. crypto's are highly volatile assets. i think we have to distinguish between crypto's that are those highly speculative, substantial
suspicious occasionally, and high intensity in terms of energy consumption. they are not a currency. on the ever hand you have those stable coins that are beginning to relive a rate which some big tech's are trying to remote and push along the way which are a different animal and need to be regulated where there has to be oversight. that corresponds to the business they are conducting their respective of how they named themselves. you have the central banks powered by the man's of customers to produce something that will make the central bank and central bank currencies fit for the sentry we are in which is why we are looking at central bank digital currencies. instead of having bank notes, we
can have exactly the same thing but in a digital form. all of us are working on this and are looking to push the cbbc -- the central bank digital currencies issue on our agenda. david: if the ecb were to have a digital currency, would that be to the exclusion of paper currencies? or would that be side-by-side? >> side-by-side because we want customers to have their preference. if they still want to hold banknotes in cash, find and it should continue to be available. david: at this point in your life, do you feel discrimination to you and your professional life as a woman? >> it is difficult to discriminate against me.
i am aware of discriminations against many women in all parts of the world. david: in recent years, central bank has been worried about something called climate change. the world is making comments about it and you are as well. why should central bankers be worried about climate change? >> to me, it is a no-brainer consideration. climate change. think about it. drought, famine, pandemic, floods, massive fires. all of that is going to have an impact on prices, hence on inflation, price stability. if you look at risks, not only do we talk about assets but we have to talk about the transition costs that many
companies are going to face in order to move from the business today to how they should conduct their business tomorrow. david: historically, ceos have just worried about their shareholders. increasingly, some ceos are dealing with public policy issues. should ceos be talking about climate change or gender discrimination? or should they stick to worrying about stockholder returns? >> i think they should worry about all of the matters you discussed. corporate are not bodies. they are not physical person, but they are acting in people's lives and they are acting in the environment. they should address those matters.
david: you served two terms as the head of the imf and he could have served another term if you wanted. how do you compare the pleasure of running the imf with the pleasure of running the european central bank? is one less enjoyable, are they basically both great jobs, you're happy you had both of them? >> i am extremely privileged to have had the roles i have had with the imf. we saw each other quite often in those days and you know how much i put my heart, brain and a energy into the job and have enjoyed it tremendously. i am doing the same thing with the ecb. in times where you see geopolitical opposition, and times where you see energy withdrawn behind borders, it is important to have the desire to unite and bring consensus to the
table and to convince people that is what we are doing together united is going to be stronger than what we will do individually in our little court -- and our little corners. i am enjoying what i do. it is hard, but i enjoy it. david: when you were head of the imf, you were the first woman to hold that position. now you are the first woman to hold the position of the head of the european central bank. you are also the first woman to head your law firm, a large international law firm. at this point in your life, do you feel discrimination against you and your professional life as a woman watching mark do you think this termination has generally receipted against women in the professional workplace? >> i think discrimination has not receded. i don't want to take my personal situation because when you have traveled the journey i have traveled, it is difficult to hold open discrimination against
me. let's face it. but i'm very much aware of discrimination against many women, many young women, many women in all parts of the world. i am particularly thinking of the afghan women at the moment who clearly are suffering the worst possible nightmare and setback in their lives. it's a constant struggle. it should be a constant fight for all of us to make sure that everybody has a chance to accomplish their product -- to accomplish and develop their activity in the way they want. this is certainly not the case yet. when i sit at my governing council table and i look around, i see 23 men and one women -- and one woman in addition to me.
two to 23 is not a good ratio and in the finance world i do not know whether you would call it discrimination, but there is certainly a disparity between men and women. if you look of the venture capital world, it is the same. if you look at ceos of large international banks, it is the same. if you look at our limit, you have a lower representation of women and all women in society. something is not working. david: central bankers are famous for not talking in language that the average person can understand. sometimes they have done that on purpose. you talk in a language that everyone seems to understand. is that a conscious policy you have? >> yes, david. i think it is extremely important that people understand what we are doing. a lot of that has to do with trust. if somebody talks to you in a completely obscure language, how
are you going to trust that person? it is critically important to agree with the governing council members that we will communicate in a more understandable, clear and blur way. just to give you an example, after each governing council, we implement a monetary policy statement where we commit to keeping sentences short, to have one idea per sentence, to make sure the use of words that we use are understandable by you, of course, but a normal person as well. we measure that and try to stick to those principles and we will be held accountable. david: do you think that your ability to do that and the federal reserve chairman, jay powell, is interested in that as well. both of you are trained as lawyers. i'm trained as a lawyer. do you think there is a future for central bankers to be lawyers? is there some hope for me to be
a central banker someday? >> i'm sure. i strongly believe in diversity. diversity has not called to do with gender, with minorities, with sexual orientation or whatever. it also has to do with background, with the training, with the culture you carry with you. to bring it all together around the table with diversity, and my view, improves the quality of the decisions that we make. i have learned from my colleagues. david: i would like to know what is the pleasure of being the head of the central bank? you obviously have to work seven days a week. you did that for many years in your career. what is the pleasure you get out of heading the european central bank? >> it is the same kind of
pleasure i take in leading other airmen as asians. making sure that people around me are doing the best they can for the organization, delivering on their mission and that we form a team heading in the same direction. to me, that means an awful lot. david: in your use, you are a synchronized swimmer. you have to work closely with teammates and get everything working together quite nicely. is it the case that when you are doing the central banking role, you have to have the same kind of skill set? you've got all of these central bankers of each country that you have to get to work together. do you think your synchronized swimming skills come together to help you as the head of the european central bank? >> yes they do actually. what you learn in synchronized swimming is each individuals --
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erik: a nation in default, an economy in ruins, a desperate struggle for millions. >> here, there are so many people hungry, miserable, without jobs. erik: now, after four years of crippling u.s. sanctions, the venezuelan president, nicolas maduro, senses an opportunity. pres. maduro: hopefully, we can find paths of closeness, of respect, paths of mutual benefit. erik: donald trump is out, joe biden is in. he wants to negotiate a deal. pres. maduro: paths that allow