Breaking news from Jackson Hole

More than just car insurance. Well, it was no news is sort of good news from Jackson Hole today. Fed chairman Ben Bernanke not really opening the new door to any economic intervention. That initially sparked a knee-jerk sell-off reaction but now investors seem to be okay with that.SteveLeisman is in Jackson Hole. Steve, what's the latest? I'm here with an enormous amount of brain power on the stage. Barry Ikengreen, and thenSteveIchiketi.
Barry, your thoughts on Ben Bernanke's speech this morning?
Bernanke signaled that he personally would like to do more, I think. that's what you heard. he pointed to the problem of structural unemployment, long-term unemployment and he signaled that they're going to have an exceptional two-day meeting in September which is an opportunity to build a consensus.
Was there no significance in the fact that he didn't list the options out there or really specify a preference?
I think the Fed and Ben have listed the options in the past.They need to move now to build a coalition on theFOMC to take action and that can't happen before September.
You just delivered a very provocative paper inside the meeting there in which you sort of confirm and expand the work done that said that at some form of 90% is when these economies reach a tipping point.I guess the question for you, is the United States and Europe, are they at that tipping point in your opinion?
What we try to say first of all that debt is good for a while, then it can become bad. It becomes -- first it is an accelerant for growth, then it becomes a sort of retarding factor.I think the problem is that if you look at the advanced economies around the world, many of them have already passed this sort of 85, 90 percentage point of GDP  level. I wouldn't point to one or two countries in particular, I'd point to the advanced world overall and say that we are on a trajectory right now that's going to be very, very hard to reverse an we have to work even harder than we thought. Couple quick things. you didn't find a whole lot of impact from high household debt or high corporate debt. It was really the government debt that tends to retard growth. government debt is certainly worse than the other ones but the other ones, you're going to hit a tipping point there, too. Think we just don't have quite enough information yet on what's been happening around the world to give us enough confidence in the results we have on those other kinds of debt.
Barry, as you look back at the world's currency system, how much of a mess is it and are there a couple of things that you think can be done inside by the guys in there to fix it?
The global economic system is organized around two national currencies -- the Dollar and Euro. Put them together and they account for 90% of foreign exchange reserves. Put them together and they account for 90% of foreign exchange transactions. 
So what needs to be done teed to be done in the U.S. and Europe.
 The united states needs to restore confidence in the Dollar and repair the damage that was done by the debt ceiling debate and the S&P downgrade. The Europeans need to draw a line under their crisis. Very easy to state in those general terms but there is a lot of hard work to be done.
Is there any hope at all that some of this stuff gets done or do you think we are moving to a place of competitive devaluation?How much of a danger is that?
  I don't think competitive devaluation is the way out but emerging markets are the strong economies at the moment. They have the strong currencies so there is an argument for both the Dollar and the Euro trending downward against emerging market currencies over time. That's what we're inevitably going to see.
Steve, I need you to put another hat on. You're the guy responsible -- one of the goiz responsi guys re for these charges banks will have for being big. is that progressing as planned to move to approval by the g-20 in November?
I think the basel committee on banking supervision and people who oversee them have come to an agreement on that. I think that the agreement is fair and i think most of the big banks in the world of really large global banks are basically from what i can tell already at points where they're going to be able to meet those without too much difficulty. I think at this point the higher capital requirements and the improvements in the loss absorbing capacity of balance sheets of banks, Something that everybody agrees they need to have, even their own managers and shareholders. so this is something that I really think is well on the way and we are trying to move on to the next difficult challenges. Thank you both very much for joining us. From Jackson Hole, I think we from Jackson Hole, I think we are coming back around 4:00 with John Lipske, the first deputy managing director of the international monetary fund.