How that could be achieved was a point of contention. Diplomacy was the first option proposed. “The president has to tell Xi Jinping that this is a core issue for the U.S.,” said former U.S. Ambassador Nicholas Burns, the Roy and Barbara Goodman Family Professor of the Practice of Diplomacy and International Relations at HKS, in his role as secretary of state. “The Chinese have created a problem for us by taking away our leverage with sanctions.”
More proactive steps were also recommended. “We should be creating a digital currency,” argued the Brunswick Group’s Jennifer Fowler, an expert in illicit finance and economic sanction issues, in her role as director of national intelligence.
“There is a financial technology revolution taking place, and we are about to miss it,” agreed Richard Verma, vice chairman and partner at the Asia Group, a D.C.-based strategic and business advisory firm, playing the ambassador to China. “My recommendation is we not try to quash this effort, but that we get on board.”
Citing the looming danger, Summers pushed for a more multifaceted response, including a public-private partnership to develop digital options, and called for a “hardening” of SWIFT, to make the current system more secure. “This is not a Kennedy School exercise for us,” he said, to laughter.
The team, which also included Meghan O’Sullivan, Jeane Kirkpatrick Professor of the Practice of International Affairs, as the vice president, and Gary Gensler, Professor of the Practice of Global Economics and Management, MIT Sloan School of Management, as assistant to the president for economic policy, ultimately agreed to make multiple recommendations. (Kennedy School students served as council staff, providing research, background, and talking points.) All agreed that diplomacy would have a place, with China informed that North Korea was a serious concern, and reached consensus on improving SWIFT security and the need for the U.S. to develop options for a digital currency.
“We need a strategy to resuscitate U.S. financial prowess,” concluded Rosenbach, as he readied to make the call to the president, ending the exercise.