1 00:00:03,320 --> 00:00:06,800 Speaker 1: A major trailblazer in the financial service system is Jane Fraser. 2 00:00:07,320 --> 00:00:09,600 Speaker 1: Two years ago, she became the CEO of City and 3 00:00:09,640 --> 00:00:12,000 Speaker 1: in doing so, became the first woman to had a 4 00:00:12,039 --> 00:00:15,160 Speaker 1: major money center bank. Today, City and other major banks 5 00:00:15,160 --> 00:00:18,360 Speaker 1: in the United States are facing challenges to the banking system. 6 00:00:18,440 --> 00:00:21,119 Speaker 1: I sat down with Jane Fraser recently to talk about 7 00:00:21,160 --> 00:00:24,080 Speaker 1: these and other challenges. Anything new in the banking world. 8 00:00:26,680 --> 00:00:30,920 Speaker 1: It's been a quiet week, quiet week, David, So so 9 00:00:31,280 --> 00:00:34,680 Speaker 1: let's talk about what has been going on. Let's start 10 00:00:34,720 --> 00:00:39,680 Speaker 1: with the Easy Ones Silicon Valley Bank. What went wrong there? Well, 11 00:00:40,159 --> 00:00:45,519 Speaker 1: before we dive into that, I've worked in financial markets 12 00:00:45,600 --> 00:00:48,839 Speaker 1: all around the world, and I have to say we're 13 00:00:48,920 --> 00:00:51,720 Speaker 1: very lucky in America. This is the best financial system 14 00:00:51,960 --> 00:00:57,080 Speaker 1: in the world. It is the end factivally okay, but 15 00:00:57,200 --> 00:01:00,279 Speaker 1: despite it being the best, we have some problems time 16 00:01:00,320 --> 00:01:03,000 Speaker 1: to time. Yeah, but they're they're isolated problems. So when 17 00:01:03,040 --> 00:01:05,720 Speaker 1: you when you look at it, the financial systems is 18 00:01:05,760 --> 00:01:09,199 Speaker 1: broadest deep here as competitive. We've bought some large banks 19 00:01:09,240 --> 00:01:12,680 Speaker 1: that are well capitalized and a source of strength. At 20 00:01:12,760 --> 00:01:17,720 Speaker 1: the moment, we have medium sized banks, regional banks, and 21 00:01:17,800 --> 00:01:21,679 Speaker 1: buy a large they are equally well capitalized, serving their 22 00:01:21,680 --> 00:01:24,679 Speaker 1: communities play an important part in the banking system. This 23 00:01:24,760 --> 00:01:29,120 Speaker 1: is quite isolated, okay, but people are still interested in 24 00:01:29,200 --> 00:01:34,560 Speaker 1: hearing about it. So, so your bank is well capitalized. 25 00:01:34,640 --> 00:01:36,120 Speaker 1: Your bank, I should have said, as a bank with 26 00:01:36,200 --> 00:01:39,640 Speaker 1: about two hundred and thirty thousand employers and about an 27 00:01:39,640 --> 00:01:44,600 Speaker 1: eighty five billion dollar market capitalization. So your bank is 28 00:01:44,600 --> 00:01:47,040 Speaker 1: in good shape. And your bank is the fourth biggest 29 00:01:47,040 --> 00:01:49,520 Speaker 1: bank in the United States, that right, JP, Morgan Bank 30 00:01:49,560 --> 00:01:52,160 Speaker 1: of America, Wells Fargo, and then City. There is a 31 00:01:52,160 --> 00:01:54,960 Speaker 1: bank on the West coast called Silicon Valley Bank, or 32 00:01:55,000 --> 00:01:58,120 Speaker 1: there was a bank there not as well capitalized. I 33 00:01:58,200 --> 00:02:00,480 Speaker 1: mean that the regulator is not under seeing what was 34 00:02:00,520 --> 00:02:02,200 Speaker 1: going on, or are people in the banking where are 35 00:02:02,240 --> 00:02:04,760 Speaker 1: people like you? Were you surprised by what happened. So 36 00:02:04,960 --> 00:02:07,160 Speaker 1: you had a combination of two pieces. You've had the 37 00:02:07,200 --> 00:02:12,200 Speaker 1: macro and some idiosyncratic and factors around Silicon Valley Bank, 38 00:02:12,560 --> 00:02:15,920 Speaker 1: but then you also had the impact accelerated by social 39 00:02:15,919 --> 00:02:18,560 Speaker 1: media of what went down and the rates curve and 40 00:02:18,680 --> 00:02:20,880 Speaker 1: the increase in rates that's been most we've seen the 41 00:02:20,919 --> 00:02:23,960 Speaker 1: fastest and the steepest in forty years. So there's a 42 00:02:23,960 --> 00:02:28,120 Speaker 1: bit of pain that comes from that. Secondly, you did 43 00:02:28,160 --> 00:02:31,520 Speaker 1: have idiosyncratic factors I think is the polite British way 44 00:02:31,560 --> 00:02:35,200 Speaker 1: of describing them in Silicon Valley Bank. So as all 45 00:02:35,200 --> 00:02:37,640 Speaker 1: this played out, you saw some pretty serious holes in 46 00:02:37,680 --> 00:02:40,799 Speaker 1: their balance sheet management, and they had a very concentrated 47 00:02:40,840 --> 00:02:44,840 Speaker 1: client base, and that client base ended up burning cash 48 00:02:44,960 --> 00:02:50,640 Speaker 1: much faster than anticipated, and they ended up wanting to 49 00:02:50,720 --> 00:02:53,120 Speaker 1: raise capital and it went down pretty quick. In the 50 00:02:53,160 --> 00:02:55,560 Speaker 1: Greater Session in seven o eight or so, the US 51 00:02:55,680 --> 00:03:00,320 Speaker 1: government passed TARP legislation, and under the TARP legislation, large 52 00:03:00,320 --> 00:03:04,160 Speaker 1: amounts of capital were injected into banks, including City and 53 00:03:04,240 --> 00:03:09,040 Speaker 1: effectively that meant that the shareholders, the creditors, and the 54 00:03:09,120 --> 00:03:13,480 Speaker 1: depositors were all protected. This time around Silicon Valley Bank, 55 00:03:13,720 --> 00:03:17,239 Speaker 1: was only the depositors work protected or were decision made 56 00:03:17,240 --> 00:03:19,840 Speaker 1: by the bide administration others over the weekend. Do you 57 00:03:19,840 --> 00:03:22,240 Speaker 1: think that was the right decision to protect only the 58 00:03:22,240 --> 00:03:24,919 Speaker 1: depositors and say goodbye to the shareholders and goodbye to 59 00:03:24,960 --> 00:03:28,359 Speaker 1: the creditors. I think it's very important to protect the 60 00:03:28,400 --> 00:03:32,880 Speaker 1: depositors right now. The banking system everywhere around the world 61 00:03:32,880 --> 00:03:36,080 Speaker 1: depends on confidence, and that confidence has to be in 62 00:03:36,120 --> 00:03:39,440 Speaker 1: the safety and security of deposits. So in terms of 63 00:03:39,560 --> 00:03:43,200 Speaker 1: the most important job here they did the most important job, 64 00:03:43,440 --> 00:03:46,280 Speaker 1: which is making sure the depositors will whole. So in 65 00:03:46,320 --> 00:03:48,840 Speaker 1: the old days when there were bank runs, used to 66 00:03:48,840 --> 00:03:51,560 Speaker 1: see people lined up outside the street and get their 67 00:03:51,600 --> 00:03:54,680 Speaker 1: money out. Now you're just on your iPhone or whatever 68 00:03:54,760 --> 00:03:56,680 Speaker 1: phone you have, you can take your money out. So 69 00:03:57,080 --> 00:03:59,760 Speaker 1: money moved so quickly was at a factor as well. 70 00:03:59,800 --> 00:04:01,800 Speaker 1: And having the money get out of a bank so 71 00:04:01,880 --> 00:04:03,240 Speaker 1: quickly on the weight and line, you can just do 72 00:04:03,280 --> 00:04:06,040 Speaker 1: it over there. It is a complete game changer from 73 00:04:06,040 --> 00:04:09,400 Speaker 1: what we've seen before. David, You're absolutely right. There were 74 00:04:09,400 --> 00:04:13,520 Speaker 1: a couple of tweets and then this thing went down 75 00:04:13,640 --> 00:04:18,000 Speaker 1: much faster than has appened in history. And frankly, I 76 00:04:18,000 --> 00:04:21,760 Speaker 1: think the regulators did a good job in responding very quickly, 77 00:04:22,400 --> 00:04:25,360 Speaker 1: because normally you have longer to respond to this, so 78 00:04:25,400 --> 00:04:28,640 Speaker 1: they acted with quite a lot of speak even how 79 00:04:28,680 --> 00:04:31,359 Speaker 1: quickly this happened. So some people say you have a 80 00:04:31,440 --> 00:04:35,400 Speaker 1: moral hazard when you protect people. So by protecting all 81 00:04:35,400 --> 00:04:39,279 Speaker 1: the depositors in Silicon Valley Bank, the implication was that 82 00:04:39,480 --> 00:04:41,840 Speaker 1: if somebody else has a problem, will protect them and 83 00:04:41,880 --> 00:04:44,080 Speaker 1: so forth, And so the two hundred and fifty thousand 84 00:04:44,080 --> 00:04:46,880 Speaker 1: dollars limit is meaningless more or less? Or do you 85 00:04:46,920 --> 00:04:50,480 Speaker 1: think the federals are and the Secretary of Treasurers saying 86 00:04:50,680 --> 00:04:53,080 Speaker 1: we're not going to protect every depositor or we're going 87 00:04:53,120 --> 00:04:57,240 Speaker 1: to protect certain depositors. I don't think they need to 88 00:04:57,279 --> 00:05:00,480 Speaker 1: go out right now because the banking system is pretty sound, 89 00:05:00,680 --> 00:05:03,680 Speaker 1: and we're talking about a few banks. We had it 90 00:05:03,760 --> 00:05:07,680 Speaker 1: from the Chairman pal today. This is not something that 91 00:05:07,800 --> 00:05:11,440 Speaker 1: is spread across the entire banking system. Isn't like it 92 00:05:11,520 --> 00:05:15,159 Speaker 1: was last time. This is not a credit crisis. This 93 00:05:15,240 --> 00:05:18,120 Speaker 1: is a situation where it's a few banks that have 94 00:05:18,240 --> 00:05:20,880 Speaker 1: some problems and it's better to make sure that we 95 00:05:21,000 --> 00:05:23,359 Speaker 1: nip that in the bud. Not to pick on the 96 00:05:23,400 --> 00:05:27,360 Speaker 1: West Coast, but there's another West Coast bank, First Republic Bank, 97 00:05:27,400 --> 00:05:29,880 Speaker 1: which is around the country but based in San Francisco, 98 00:05:30,279 --> 00:05:33,320 Speaker 1: and they've had some problems and they've had gigantic declining 99 00:05:33,360 --> 00:05:36,120 Speaker 1: their market value and so forth. Do you expect that 100 00:05:36,160 --> 00:05:41,200 Speaker 1: somebody will bail them out or buy them? Well, I'm 101 00:05:41,200 --> 00:05:43,880 Speaker 1: not going to comment in depth on First Republic because 102 00:05:43,920 --> 00:05:47,120 Speaker 1: they are actively working through the challenges that they're facing 103 00:05:47,200 --> 00:05:52,240 Speaker 1: right now. What you saw last week was a number 104 00:05:52,279 --> 00:05:55,240 Speaker 1: of the large banks eleven of us got together to 105 00:05:55,320 --> 00:05:59,680 Speaker 1: put a large capital or deposit injection into them to 106 00:05:59,800 --> 00:06:02,280 Speaker 1: how by the time to make sure that they could 107 00:06:02,279 --> 00:06:05,760 Speaker 1: come up with the right solution for the restructuring that's needed. 108 00:06:05,960 --> 00:06:08,560 Speaker 1: So the large banks and others put in roughly thirty 109 00:06:08,560 --> 00:06:10,479 Speaker 1: billion dollars of the past. So I think you put 110 00:06:10,520 --> 00:06:13,720 Speaker 1: in roughly five billion or something like that. So how 111 00:06:13,720 --> 00:06:15,480 Speaker 1: did that happen? It Jamie Diamond call you up and 112 00:06:15,480 --> 00:06:17,480 Speaker 1: say you have five billion dollars you don't really need 113 00:06:17,520 --> 00:06:20,000 Speaker 1: and you can put it in. The first republican is 114 00:06:20,000 --> 00:06:21,839 Speaker 1: that you have to go to your board to say 115 00:06:21,839 --> 00:06:24,080 Speaker 1: I need to get five billion dollars somewhere. I mean, 116 00:06:24,120 --> 00:06:26,160 Speaker 1: how or how do you make that decision? And was 117 00:06:26,160 --> 00:06:28,080 Speaker 1: it you just say that, Jamie, I'll call you back, 118 00:06:28,120 --> 00:06:31,679 Speaker 1: I'll think about it, or how does that work? So 119 00:06:34,000 --> 00:06:36,560 Speaker 1: what are the great things about this? Was actually that 120 00:06:36,600 --> 00:06:38,880 Speaker 1: the banks did all come back together. Because you think 121 00:06:38,920 --> 00:06:41,160 Speaker 1: of it, we're all pretty We usually try and kill 122 00:06:41,200 --> 00:06:43,200 Speaker 1: each other in different deals that we're trying to do, 123 00:06:43,400 --> 00:06:46,080 Speaker 1: so there's a lot of competition between us. But in 124 00:06:46,120 --> 00:06:49,320 Speaker 1: this instance, this is one where yeah, we're in a 125 00:06:49,360 --> 00:06:52,279 Speaker 1: strong position. We want to stop what could have been 126 00:06:52,720 --> 00:06:55,240 Speaker 1: a problem. And we all know when there is a 127 00:06:55,279 --> 00:06:59,960 Speaker 1: confidence crisis, the logic that takes over, isn't it necessary? 128 00:07:00,040 --> 00:07:02,960 Speaker 1: Really rational? So we wanted to go and help protect 129 00:07:03,040 --> 00:07:04,880 Speaker 1: the system. It's in the interests to do so. So 130 00:07:05,040 --> 00:07:08,280 Speaker 1: despite this being quite a divisive environment that we're all 131 00:07:08,279 --> 00:07:11,080 Speaker 1: operating in, this is an instance of the bank's coming 132 00:07:11,080 --> 00:07:14,120 Speaker 1: together and saying, okay, what can we do here to 133 00:07:14,160 --> 00:07:16,880 Speaker 1: support a system that we have confidence in? And you 134 00:07:16,960 --> 00:07:21,040 Speaker 1: don't put five billion dollars into the system through the 135 00:07:21,080 --> 00:07:23,600 Speaker 1: generosity of your own heart. You do it because you 136 00:07:23,720 --> 00:07:27,000 Speaker 1: have confidence in the system itself. You expect to get 137 00:07:27,000 --> 00:07:30,520 Speaker 1: their money back eventually. Yes, okay, So Jamie Diamond is 138 00:07:30,560 --> 00:07:32,040 Speaker 1: a great banker. I think he's been the head of 139 00:07:32,640 --> 00:07:35,960 Speaker 1: Japan Worker for seventeen years something like that. Jamie Diamond 140 00:07:37,440 --> 00:07:42,200 Speaker 1: well regarded. But why do you think it is the 141 00:07:42,280 --> 00:07:45,000 Speaker 1: case that he's calling around and doing this and not 142 00:07:45,040 --> 00:07:47,440 Speaker 1: the Secretary Treasury, the Chairman of the Federal Reserved, the 143 00:07:47,480 --> 00:07:49,440 Speaker 1: head of the FDIC. Why is it a non government 144 00:07:49,480 --> 00:07:51,720 Speaker 1: person is doing this. I want to thought a government 145 00:07:51,720 --> 00:07:53,680 Speaker 1: person would do this. David, Why do you think that 146 00:07:53,760 --> 00:07:56,440 Speaker 1: Janet wasn't calling around doing it? Do you believe everything 147 00:07:56,480 --> 00:07:59,720 Speaker 1: you read in the newspapers? Tis because when people and 148 00:07:59,840 --> 00:08:02,240 Speaker 1: who do something good, they usually have the press know 149 00:08:02,320 --> 00:08:05,560 Speaker 1: about it. So but maybe she was going round. I'm 150 00:08:05,560 --> 00:08:07,760 Speaker 1: sure she was. But Jamie seems to be getting all 151 00:08:07,800 --> 00:08:09,600 Speaker 1: the credit if credit is the right word, or is 152 00:08:09,600 --> 00:08:12,200 Speaker 1: that not fair to give him the credit? Oh? I 153 00:08:12,680 --> 00:08:14,800 Speaker 1: Jamie played a role. I think we all played a role, 154 00:08:14,840 --> 00:08:17,400 Speaker 1: and so did There was a very active discussion over 155 00:08:17,440 --> 00:08:20,640 Speaker 1: that weekend. Which city consider buying First Republic or you're 156 00:08:20,640 --> 00:08:24,160 Speaker 1: not interested in No, you're not buying? Okay, another bank, 157 00:08:26,000 --> 00:08:30,320 Speaker 1: but Credit Swiss. Credit Swiss seemed to dissolve very very quickly. 158 00:08:31,080 --> 00:08:33,959 Speaker 1: Were you surprised at how quickly that bank kind of 159 00:08:34,000 --> 00:08:36,160 Speaker 1: went away? After about one hundred years of being around. 160 00:08:36,400 --> 00:08:38,640 Speaker 1: So the nice thing, we're about three or four banks 161 00:08:38,640 --> 00:08:41,400 Speaker 1: out of the thousands that are here in the States 162 00:08:41,400 --> 00:08:43,680 Speaker 1: and the rest of it. So let's put that in perspective. 163 00:08:44,040 --> 00:08:46,480 Speaker 1: So Credit Suis. I don't think anyone was falling off 164 00:08:46,480 --> 00:08:50,600 Speaker 1: their chair. The Credit Suis ultimately ended up where it did. 165 00:08:50,640 --> 00:08:52,520 Speaker 1: It was really a question of time. It's been a 166 00:08:52,559 --> 00:08:55,280 Speaker 1: troubled institution for a long time. Those of you who 167 00:08:55,280 --> 00:08:59,480 Speaker 1: don't know it, it's a very global bank in Swiss. 168 00:08:59,720 --> 00:09:02,440 Speaker 1: It's got a very strong operation in Switzerland, good wealth 169 00:09:02,520 --> 00:09:06,720 Speaker 1: management in Asia, investment bank here in the States and 170 00:09:06,800 --> 00:09:09,240 Speaker 1: around the world. But it's had a lot of issues. 171 00:09:10,080 --> 00:09:12,640 Speaker 1: It's had a lot of management instability, It's had a 172 00:09:12,720 --> 00:09:16,559 Speaker 1: number of different crises and things that have hit it. Well. 173 00:09:16,600 --> 00:09:19,040 Speaker 1: Credit Swiss has some great private bankers and they have 174 00:09:19,120 --> 00:09:22,400 Speaker 1: some great clients. Are the city bankers calling up at 175 00:09:22,400 --> 00:09:25,319 Speaker 1: Credit Swiss former employees and saying you should come here 176 00:09:25,400 --> 00:09:27,640 Speaker 1: now or something like that, I think they're calling us 177 00:09:27,760 --> 00:09:30,319 Speaker 1: they are, okay, all right, okay, growing up? What did 178 00:09:30,360 --> 00:09:32,400 Speaker 1: you say wanted to be the CEO of city when 179 00:09:32,400 --> 00:09:34,520 Speaker 1: you're growing up? What did you think? I want to 180 00:09:34,520 --> 00:09:36,400 Speaker 1: be a doctor when I grew up? But I was 181 00:09:36,480 --> 00:09:40,000 Speaker 1: really lousy at biology, So that kind of news that one. 182 00:09:40,480 --> 00:09:41,959 Speaker 1: There's a lot of people who want to go to 183 00:09:42,040 --> 00:09:46,000 Speaker 1: medical school. So okay, you grew up in Edinburgh area, yep? 184 00:09:46,080 --> 00:09:50,679 Speaker 1: I did? And were your parents bankers? No, definitely not so. 185 00:09:50,800 --> 00:09:54,920 Speaker 1: My father was a Scottish accountant, which meant you you're 186 00:09:54,960 --> 00:09:58,800 Speaker 1: not really relying on parental generosity and extra pocket money 187 00:09:59,400 --> 00:10:02,960 Speaker 1: from a scot Tish accountant as a father. So I 188 00:10:03,040 --> 00:10:05,400 Speaker 1: used to earn my pocket money on the golf course 189 00:10:05,400 --> 00:10:07,560 Speaker 1: at Saint Andrew's counting. You would not know it from 190 00:10:07,640 --> 00:10:10,600 Speaker 1: my golf game, but I'm truth's better than mine. So 191 00:10:10,720 --> 00:10:13,400 Speaker 1: you went to Cambridge after you graduated? What did you 192 00:10:13,480 --> 00:10:17,439 Speaker 1: do after I graduate? I joined Golbyn as an analyst. 193 00:10:18,600 --> 00:10:20,959 Speaker 1: That's an easy job to get, an easy job when 194 00:10:20,960 --> 00:10:23,040 Speaker 1: you haven't you don't work more than thirty forty hours 195 00:10:23,040 --> 00:10:25,760 Speaker 1: a week. Yes, yeah, yes, So how many years did 196 00:10:25,760 --> 00:10:27,480 Speaker 1: you do that? So? I worked to Goldman for a 197 00:10:27,520 --> 00:10:29,959 Speaker 1: couple of years and I was I was young when 198 00:10:30,000 --> 00:10:32,880 Speaker 1: I started, and everyone was I was the boring girl 199 00:10:32,920 --> 00:10:37,840 Speaker 1: from Scotland. Everyone else was European, spoke multiple languages and 200 00:10:38,120 --> 00:10:40,440 Speaker 1: was a lot more exotic and interesting than me. So 201 00:10:40,600 --> 00:10:43,080 Speaker 1: after I finished the Annist program, I thought I'd better 202 00:10:43,120 --> 00:10:45,280 Speaker 1: make myself a bit more interesting. So I moved to 203 00:10:45,360 --> 00:10:49,520 Speaker 1: Spain and speak Spanish before I didn't. So now you 204 00:10:49,600 --> 00:10:57,439 Speaker 1: speak Spanish perfect amenty, Well, I know one word, maybe 205 00:10:57,440 --> 00:11:01,760 Speaker 1: see or something like that. I don't ever, but I 206 00:11:02,400 --> 00:11:05,400 Speaker 1: you know, my language skills are very limited, so so 207 00:11:05,760 --> 00:11:11,320 Speaker 1: luckily you have other talents though, which But so you 208 00:11:11,320 --> 00:11:12,760 Speaker 1: do there for a couple of years and then you 209 00:11:12,800 --> 00:11:15,560 Speaker 1: decide to go where America? All right? And where did 210 00:11:15,559 --> 00:11:19,280 Speaker 1: you want to go in America? I did the same again, 211 00:11:19,360 --> 00:11:22,199 Speaker 1: taught my way into Harvard Business School, and I was 212 00:11:22,280 --> 00:11:25,440 Speaker 1: fascinated by the American machine. And if you've spend a 213 00:11:25,480 --> 00:11:27,840 Speaker 1: bit of time in Europe and growing up in the 214 00:11:28,000 --> 00:11:31,360 Speaker 1: you know, the eighties, seventies and eighties, it's fascinating to 215 00:11:31,559 --> 00:11:35,480 Speaker 1: America is just something you want to try and understand 216 00:11:35,559 --> 00:11:38,640 Speaker 1: in the American economy and the American entrepreneurs not someone 217 00:11:38,679 --> 00:11:40,280 Speaker 1: you ever wanted to bet again. So when you went 218 00:11:40,320 --> 00:11:43,199 Speaker 1: to Harvard Business School, you entered in ninety two something 219 00:11:43,240 --> 00:11:45,880 Speaker 1: like that? That's right? Did you entered ninety two? Were 220 00:11:45,880 --> 00:11:48,040 Speaker 1: there are a lot of women in your class, probably 221 00:11:48,040 --> 00:11:51,400 Speaker 1: about twenty four twenty five percent something like that, Yes, 222 00:11:51,480 --> 00:11:54,200 Speaker 1: and enough of us to cause trouble? All right? You 223 00:11:54,240 --> 00:11:56,720 Speaker 1: graduate from Harvard Business School and then you decide to 224 00:11:56,760 --> 00:12:00,880 Speaker 1: go to McKenzie, Yes, I did. And why did you 225 00:12:00,880 --> 00:12:04,319 Speaker 1: want to be a consultant? Well, first of all was 226 00:12:04,400 --> 00:12:06,439 Speaker 1: why didn't Why didn't I go back into banking at 227 00:12:06,440 --> 00:12:08,640 Speaker 1: that time? And I've been in banking in the eighties 228 00:12:08,679 --> 00:12:12,200 Speaker 1: where there weren't many women in banking, unlike the business school, 229 00:12:13,320 --> 00:12:17,280 Speaker 1: they wore suits with very big shoulder pads, and they 230 00:12:17,280 --> 00:12:21,120 Speaker 1: were more scary than the men um You remember that, 231 00:12:21,200 --> 00:12:24,679 Speaker 1: you remember the era. And so when I looked at 232 00:12:24,800 --> 00:12:30,199 Speaker 1: the consulting, particularly McKinsey, I like partnerships. I think partnerships 233 00:12:30,240 --> 00:12:33,320 Speaker 1: are great places to grow up. The apprenticeship models wonderful 234 00:12:33,920 --> 00:12:39,120 Speaker 1: global institution and firm, and also it was quite strategic 235 00:12:39,800 --> 00:12:41,800 Speaker 1: in what they were looking at. It was similar issues 236 00:12:41,840 --> 00:12:44,319 Speaker 1: to M and A at GOUM. But I thought I 237 00:12:44,320 --> 00:12:47,040 Speaker 1: would have a chance of having a family a bit 238 00:12:47,080 --> 00:12:50,719 Speaker 1: more predictability met in the work schedule. So you did 239 00:12:50,720 --> 00:12:53,439 Speaker 1: it for ten years, roughly ten years, and you had 240 00:12:53,440 --> 00:12:56,720 Speaker 1: two children during that time. So you you go to McKinsey, 241 00:12:56,760 --> 00:12:58,600 Speaker 1: you work your way up, you become a partner there 242 00:12:59,040 --> 00:13:01,920 Speaker 1: and you being a partner mckinsi's a great job. Why 243 00:13:01,960 --> 00:13:05,280 Speaker 1: did you decide to leave to go to city. Yeah. 244 00:13:05,360 --> 00:13:08,000 Speaker 1: I became a mum at the same time as I 245 00:13:08,000 --> 00:13:12,079 Speaker 1: became a partner, and I worked part time all the 246 00:13:12,120 --> 00:13:18,080 Speaker 1: way through my partnership years. And McKinsey was fantastic about 247 00:13:18,080 --> 00:13:21,080 Speaker 1: that because I was able to spend time with the 248 00:13:21,559 --> 00:13:24,719 Speaker 1: kids before they went into school, but then when they 249 00:13:24,760 --> 00:13:27,760 Speaker 1: got when they were then at school that I felt like, Okay, 250 00:13:27,840 --> 00:13:32,520 Speaker 1: I can go back full time working again, and I 251 00:13:32,640 --> 00:13:34,480 Speaker 1: you know, I honestly I felt like it was time 252 00:13:34,520 --> 00:13:36,959 Speaker 1: that I could prove that I would I could do it, 253 00:13:37,080 --> 00:13:39,480 Speaker 1: rather than just advice. All right, she went to city 254 00:13:39,559 --> 00:13:42,400 Speaker 1: at the time. Did you think a woman could become 255 00:13:42,559 --> 00:13:44,640 Speaker 1: or would ever become the head of city? I honestly 256 00:13:44,679 --> 00:13:48,240 Speaker 1: never thought about it. It mean, at that point, it's 257 00:13:48,320 --> 00:13:51,000 Speaker 1: a firm that there were quite a few women around 258 00:13:51,040 --> 00:13:53,640 Speaker 1: in I'd been in an environment was always very supportive 259 00:13:53,679 --> 00:13:56,760 Speaker 1: around it and fantastic mele mentors and others, and it 260 00:13:56,880 --> 00:13:59,240 Speaker 1: wasn't It was just never something I thought about. This 261 00:13:59,280 --> 00:14:02,560 Speaker 1: was twenty years ago, so I was just enjoying the 262 00:14:02,640 --> 00:14:05,200 Speaker 1: day job. So you had a series of jobs everyone 263 00:14:05,240 --> 00:14:07,360 Speaker 1: you were the CEO of this division or that division 264 00:14:07,360 --> 00:14:08,800 Speaker 1: and so forth. And one time they asked you to 265 00:14:08,800 --> 00:14:11,880 Speaker 1: move to Latin America to be the CEO of Latin America. 266 00:14:11,920 --> 00:14:13,200 Speaker 1: Did you think that was a dead end, You're going 267 00:14:13,280 --> 00:14:14,800 Speaker 1: to move to Latin America get out of the way 268 00:14:14,800 --> 00:14:16,560 Speaker 1: of the succession, or did you think that was a 269 00:14:16,600 --> 00:14:20,120 Speaker 1: way to get promoted. It was a big turnaround role. 270 00:14:20,520 --> 00:14:22,080 Speaker 1: And it's one of those ones you say if I 271 00:14:22,120 --> 00:14:25,440 Speaker 1: did a good job, then that was going to put 272 00:14:25,480 --> 00:14:28,600 Speaker 1: me in good position for bigger, bigger opportunities head And 273 00:14:28,640 --> 00:14:31,160 Speaker 1: if I did a bad job, then you know, so 274 00:14:31,320 --> 00:14:33,520 Speaker 1: be it. You wouldn't you weren't afraid they would forget you. 275 00:14:33,640 --> 00:14:36,160 Speaker 1: You're down in Brazil or something, and you weren't afraid 276 00:14:36,160 --> 00:14:39,200 Speaker 1: they would forget you and everything like that. Okay, so 277 00:14:39,240 --> 00:14:41,320 Speaker 1: you did a good job, you come back and you're 278 00:14:41,360 --> 00:14:43,560 Speaker 1: the head of the Global Consumer Bank. What is that 279 00:14:43,680 --> 00:14:48,040 Speaker 1: Global Consumer Bank in City? So that that's retail banking. 280 00:14:48,160 --> 00:14:50,520 Speaker 1: That's a credit card, which I believe you are a 281 00:14:50,560 --> 00:14:53,600 Speaker 1: proud owner of a City credit card. David, I am 282 00:14:53,720 --> 00:14:57,040 Speaker 1: I have that in here. I can't. I'm getting I 283 00:14:57,040 --> 00:14:59,360 Speaker 1: don't have enough frequent Flyer miles on it, though I'm 284 00:14:59,400 --> 00:15:01,760 Speaker 1: trying to. You told me I'm not qualified for my 285 00:15:01,880 --> 00:15:04,120 Speaker 1: frequent fire miles. But yeah, you've got the wrong card. 286 00:15:04,520 --> 00:15:07,280 Speaker 1: Is it a it? Is this the best credit card 287 00:15:07,320 --> 00:15:12,640 Speaker 1: you can get? So, David, you have the one with 288 00:15:12,720 --> 00:15:18,200 Speaker 1: our wonderful partner of American Airlines and they yours is black. 289 00:15:18,240 --> 00:15:21,800 Speaker 1: I can mind which is better. You've got to ask 290 00:15:21,840 --> 00:15:25,320 Speaker 1: for it, David. Okay, all right, Well, although I suspect 291 00:15:25,320 --> 00:15:27,320 Speaker 1: you may not be flying quite as much on the 292 00:15:27,400 --> 00:15:33,720 Speaker 1: commercial airlines. Currently, many CEOs are under pressure to take 293 00:15:33,840 --> 00:15:38,560 Speaker 1: positions on public policy matters, So positions are on voting 294 00:15:38,680 --> 00:15:42,720 Speaker 1: rights or or um climate change. So where do you 295 00:15:42,760 --> 00:15:45,480 Speaker 1: think CEO should be getting in the middle of talking 296 00:15:45,520 --> 00:15:47,560 Speaker 1: about those kind of things or do you try to 297 00:15:47,600 --> 00:15:51,880 Speaker 1: not do that when they matter to your business model? Um, 298 00:15:52,000 --> 00:15:55,680 Speaker 1: and when they're important for progress. UM. If you're a bank, 299 00:15:55,760 --> 00:15:58,480 Speaker 1: you care a little about economic growth and progress around 300 00:15:58,520 --> 00:16:01,360 Speaker 1: the world, So yes, we will speak out on that. Also, 301 00:16:01,360 --> 00:16:04,320 Speaker 1: if it's very important to our people the communities that 302 00:16:04,360 --> 00:16:06,880 Speaker 1: we're in, it will be topics we'll talk about. We 303 00:16:06,960 --> 00:16:10,960 Speaker 1: don't view that as being political, but it's about what 304 00:16:11,000 --> 00:16:14,040 Speaker 1: do we stand for as a bank? Now, what about diversity, 305 00:16:14,200 --> 00:16:16,960 Speaker 1: equity and inclusion. What are you doing to make sure 306 00:16:17,120 --> 00:16:20,560 Speaker 1: you have other diversity standards met in the bank? It's 307 00:16:20,720 --> 00:16:22,800 Speaker 1: it's a really important part of the bank because I 308 00:16:22,800 --> 00:16:27,320 Speaker 1: think because we've got people from everywhere who work at 309 00:16:27,400 --> 00:16:30,440 Speaker 1: City and they want to work for an American enterprise. 310 00:16:31,240 --> 00:16:36,600 Speaker 1: It's a real compelling point of the bank in attracting 311 00:16:36,680 --> 00:16:41,520 Speaker 1: talent from all over the world for City. My predecessor 312 00:16:41,880 --> 00:16:44,400 Speaker 1: really was very focused on making sure that we had 313 00:16:44,440 --> 00:16:47,840 Speaker 1: strong diversity of all types in the bank, and we 314 00:16:47,920 --> 00:16:52,560 Speaker 1: worked out that radical transparency is very, very valuable. So 315 00:16:52,600 --> 00:16:57,360 Speaker 1: we put out three year targets on representation and we 316 00:16:58,200 --> 00:17:02,440 Speaker 1: disclose those every close exactly what they are. The targets 317 00:17:02,480 --> 00:17:05,959 Speaker 1: we have on both recruiting and in retention and in 318 00:17:06,119 --> 00:17:10,360 Speaker 1: promoting or in everybody's schoolcard. And we also have pay equity, 319 00:17:10,720 --> 00:17:13,720 Speaker 1: so every single year we measure you have a third 320 00:17:13,760 --> 00:17:17,480 Speaker 1: party come in and make sure that every woman is 321 00:17:17,520 --> 00:17:20,480 Speaker 1: paid exactly the same as a man in the same 322 00:17:20,560 --> 00:17:23,520 Speaker 1: job performing at the same level. When did you realize 323 00:17:23,600 --> 00:17:26,280 Speaker 1: for the first time I could be or you could 324 00:17:26,280 --> 00:17:28,600 Speaker 1: be the CEO of the bank. I mean, you know, 325 00:17:28,720 --> 00:17:30,080 Speaker 1: there are a lot of people. You have two hundred 326 00:17:30,080 --> 00:17:32,399 Speaker 1: and thirty thousand employees, a lot of them want to 327 00:17:32,400 --> 00:17:34,639 Speaker 1: be When did you realize for the first time you 328 00:17:34,960 --> 00:17:38,160 Speaker 1: had a chance to get that when I was made 329 00:17:38,240 --> 00:17:41,680 Speaker 1: president of the bank. Because up until then you just 330 00:17:41,760 --> 00:17:44,280 Speaker 1: you don't really have a sense. But that was a 331 00:17:44,359 --> 00:17:49,920 Speaker 1: point when Mike and John had a conversation about being 332 00:17:49,960 --> 00:17:52,880 Speaker 1: a likely successor, but no guarantees in life, and I'd 333 00:17:52,880 --> 00:17:56,320 Speaker 1: better do a good job. Okay. So your predecessor was 334 00:17:56,359 --> 00:18:00,960 Speaker 1: Michael Corbett. Yeah, he retired about two years ago. Succeeded him. 335 00:18:01,040 --> 00:18:03,639 Speaker 1: What was the biggest challenge you had in becoming the 336 00:18:03,720 --> 00:18:09,800 Speaker 1: CEO right away? It was COVID, So this was becoming 337 00:18:09,880 --> 00:18:12,480 Speaker 1: CEO during COVID is not the easiest because you know, 338 00:18:12,680 --> 00:18:15,640 Speaker 1: one's used to going around going to different sites, seeing 339 00:18:15,680 --> 00:18:19,359 Speaker 1: our people, seeing our clients in person. And while Zoom 340 00:18:19,480 --> 00:18:22,240 Speaker 1: did an amazing job, it is not the same and 341 00:18:22,320 --> 00:18:24,920 Speaker 1: so I know you have to learn how to lead 342 00:18:24,960 --> 00:18:28,400 Speaker 1: in a different way. Today. City is a bank that 343 00:18:28,560 --> 00:18:31,640 Speaker 1: is announced it's changing its strategy and you now want 344 00:18:31,640 --> 00:18:35,960 Speaker 1: to be a consumer and institutional business bank in the 345 00:18:36,000 --> 00:18:39,960 Speaker 1: United States? Is that right? Yeah, and you're getting out 346 00:18:39,960 --> 00:18:42,520 Speaker 1: of the consumer business outside of the United States. So 347 00:18:42,560 --> 00:18:44,880 Speaker 1: what we've said we are rather than what we're not, 348 00:18:45,600 --> 00:18:49,560 Speaker 1: is that it's a pretty extraordinary bank in its history 349 00:18:50,640 --> 00:18:55,120 Speaker 1: and its presence globally. It's uniquely operate opens the door 350 00:18:55,160 --> 00:18:57,760 Speaker 1: as a bank in a hundred different countries. So the 351 00:18:58,520 --> 00:19:02,000 Speaker 1: City is to be the pre eminent banking partner for 352 00:19:02,160 --> 00:19:06,040 Speaker 1: companies and for investors and for individuals across border needs. 353 00:19:07,240 --> 00:19:09,880 Speaker 1: And that's the vision of the bank. That's the will 354 00:19:09,920 --> 00:19:15,160 Speaker 1: serve that client base as their absolutely critical partner. Hey see, 355 00:19:15,160 --> 00:19:17,800 Speaker 1: you've sold a number of your international consumer businesses and 356 00:19:17,920 --> 00:19:22,320 Speaker 1: you've an Now you're trying to sell your business in Mexico, 357 00:19:22,440 --> 00:19:25,680 Speaker 1: the consumer business business. Who are you going to sell 358 00:19:25,720 --> 00:19:29,439 Speaker 1: that too? Oh, we've been We've been fortunate to have 359 00:19:29,480 --> 00:19:31,520 Speaker 1: a lot of interest there. Look, we looked at we 360 00:19:31,560 --> 00:19:36,359 Speaker 1: looked at a consumer banking and we could see that. Originally, 361 00:19:36,400 --> 00:19:38,359 Speaker 1: the view had been that you would get a lot 362 00:19:38,400 --> 00:19:41,880 Speaker 1: of global scale and consumer banking, and we were very 363 00:19:41,920 --> 00:19:45,240 Speaker 1: strong in a number of different geographies. But the reality 364 00:19:45,400 --> 00:19:48,320 Speaker 1: is you don't get as much scale globally. It's much 365 00:19:48,320 --> 00:19:51,160 Speaker 1: more about local scale and those businesses. So we decided, 366 00:19:51,400 --> 00:19:53,639 Speaker 1: let's focus. We want the bank to be simple. We 367 00:19:53,720 --> 00:19:56,440 Speaker 1: want to be truly excellent or what we do. And 368 00:19:56,480 --> 00:19:59,280 Speaker 1: that's better if you're a more focused bank around for 369 00:19:59,320 --> 00:20:02,359 Speaker 1: your business life. So that's right, that's the path we're on. 370 00:20:02,640 --> 00:20:06,159 Speaker 1: So the bank stock under your predecessors and to some 371 00:20:06,240 --> 00:20:08,840 Speaker 1: eccenter you hasn't really moved in ten years. Is that 372 00:20:08,920 --> 00:20:12,440 Speaker 1: a concern. Well, we're transforming the bank to make sure 373 00:20:12,480 --> 00:20:15,960 Speaker 1: that we're in a very different position. So we're changing 374 00:20:16,000 --> 00:20:18,119 Speaker 1: the strategy of the bank because we talked about and 375 00:20:18,160 --> 00:20:22,440 Speaker 1: that entails selling sixty five thousand employees. It's twenty five 376 00:20:22,520 --> 00:20:25,280 Speaker 1: percent of our employee base, so we can really focus 377 00:20:25,280 --> 00:20:29,159 Speaker 1: and double down on the businesses that makes sense. Two 378 00:20:29,560 --> 00:20:32,479 Speaker 1: thirty thousand you have, you're selling sixty five thousand. Yes, 379 00:20:32,920 --> 00:20:35,920 Speaker 1: While yes, it's a lot, and I think it's under 380 00:20:35,960 --> 00:20:39,720 Speaker 1: the belief that what where we truly excel. We will 381 00:20:39,760 --> 00:20:45,240 Speaker 1: move every single day four trillion dollars of volume for 382 00:20:45,480 --> 00:20:48,960 Speaker 1: five thousand multinational firms and there's no other bank in 383 00:20:49,000 --> 00:20:52,400 Speaker 1: the world that can do that. That's an incredible asset 384 00:20:52,640 --> 00:20:56,400 Speaker 1: for America. It's a strategic asset for the States because 385 00:20:56,440 --> 00:20:59,960 Speaker 1: you'd much rather have American companies operating on an America 386 00:21:00,040 --> 00:21:03,960 Speaker 1: and banking rails and not foreign banking rails, particularly these days. 387 00:21:04,280 --> 00:21:07,120 Speaker 1: So that's what we're focusing the bank around, is that 388 00:21:07,240 --> 00:21:10,679 Speaker 1: client base. And it's a big transformation. David right, This 389 00:21:10,840 --> 00:21:14,720 Speaker 1: is bold. This takes some courage to do. We're making 390 00:21:14,840 --> 00:21:17,800 Speaker 1: really good progress on it, and we're putting a lot 391 00:21:17,840 --> 00:21:21,800 Speaker 1: of investment into modernizing the bank because we've had some 392 00:21:21,840 --> 00:21:24,840 Speaker 1: regulatory orders against us as well, to make sure that 393 00:21:24,880 --> 00:21:27,720 Speaker 1: we make the investments we need to and making sure 394 00:21:27,760 --> 00:21:32,040 Speaker 1: the culture is there of real excellence. But also to 395 00:21:32,119 --> 00:21:34,760 Speaker 1: be a human bank. We've talked about that being important 396 00:21:35,400 --> 00:21:38,600 Speaker 1: or put all of that together. That's a lot of transformations, 397 00:21:38,640 --> 00:21:41,560 Speaker 1: a lot of work, but we're really we're determined around it, 398 00:21:41,920 --> 00:21:45,280 Speaker 1: and we're completely convinced that that puts the bank into 399 00:21:45,320 --> 00:21:50,040 Speaker 1: a different profitability, different return profile and ultimately the benefit 400 00:21:50,040 --> 00:21:52,760 Speaker 1: of our shareholders. Suppose I'm listening to what you say, 401 00:21:52,760 --> 00:21:56,359 Speaker 1: and I say, she's obviously urtic killer, she's committed. Maybe 402 00:21:56,359 --> 00:21:59,280 Speaker 1: I'll myyer stock. You think your stocks are goodbye? Right now? Yes, 403 00:22:01,560 --> 00:22:04,800 Speaker 1: very my buy it. I can get an appreciation of 404 00:22:04,960 --> 00:22:07,399 Speaker 1: some percent I can be happy with you think not 405 00:22:07,440 --> 00:22:11,679 Speaker 1: as good as private equity returns, but good Right for 406 00:22:11,840 --> 00:22:14,600 Speaker 1: young professionals, why should they want to work in a 407 00:22:14,680 --> 00:22:17,480 Speaker 1: large commercial bank. What's the appeal of it? Why if 408 00:22:17,520 --> 00:22:19,600 Speaker 1: somebody gets goes to Harvard Business School, why not go 409 00:22:19,640 --> 00:22:22,480 Speaker 1: to a private equity firm, a hedge firm, one of 410 00:22:22,480 --> 00:22:28,359 Speaker 1: these important organizations. And what's the how do you recruit 411 00:22:28,400 --> 00:22:30,560 Speaker 1: people into place like city? What is it that you 412 00:22:30,600 --> 00:22:33,720 Speaker 1: say is so great about being a commercial banker. America's 413 00:22:33,760 --> 00:22:36,760 Speaker 1: global banks are right in the center of some of 414 00:22:36,800 --> 00:22:39,880 Speaker 1: the biggest challenges that are going on in the world. Geopolitically, 415 00:22:39,880 --> 00:22:43,640 Speaker 1: we get pulled into the conversations we're supporting, we're playing 416 00:22:43,640 --> 00:22:48,159 Speaker 1: a critical role in supporting clients and countries, and you 417 00:22:48,200 --> 00:22:51,720 Speaker 1: get an opportunity to come and work and learn in 418 00:22:51,760 --> 00:22:55,560 Speaker 1: a team environment, in an apprenticeship model on how to 419 00:22:55,680 --> 00:22:57,720 Speaker 1: tackle and solve some of these pieces. What do you 420 00:22:57,760 --> 00:23:02,159 Speaker 1: do for relaxation and to get away from the office 421 00:23:02,160 --> 00:23:05,960 Speaker 1: from time to time? You are a golf or or something. Yeah, look, 422 00:23:06,440 --> 00:23:09,840 Speaker 1: I love spending time with my kids, so um, you know, 423 00:23:10,119 --> 00:23:12,080 Speaker 1: being able a chance to spend some time with them. 424 00:23:12,119 --> 00:23:14,520 Speaker 1: They're less enthusiastic now than they used to be, and 425 00:23:14,520 --> 00:23:17,200 Speaker 1: they're little about that. But I'll take what I get. 426 00:23:17,600 --> 00:23:19,960 Speaker 1: Did they tell him? They tell their friends who you are. 427 00:23:20,080 --> 00:23:23,440 Speaker 1: They don't want to tell. So when I was announced 428 00:23:23,440 --> 00:23:25,560 Speaker 1: the CEO, I knew it was going to happen. I 429 00:23:25,640 --> 00:23:30,200 Speaker 1: called up my duke son and I zip didn't pick 430 00:23:30,280 --> 00:23:33,760 Speaker 1: up as usual, and I said, please call me um, 431 00:23:33,800 --> 00:23:36,119 Speaker 1: and I get it. He didn't pick up. No, No, 432 00:23:36,119 --> 00:23:39,480 Speaker 1: I didn't pick up. He send a mess about I'm busy. 433 00:23:39,680 --> 00:23:41,880 Speaker 1: I said, didn't know. Please, I've got some news. Could 434 00:23:41,880 --> 00:23:44,720 Speaker 1: you could you pick up? And he's like, Mum, I 435 00:23:44,760 --> 00:23:48,040 Speaker 1: mean I'm on zoom calls, I'm you know, I'm really busy, 436 00:23:48,480 --> 00:23:50,840 Speaker 1: and he did not pick up. Did not pick you up. 437 00:23:50,840 --> 00:23:53,560 Speaker 1: I ended up having to text him the next morning, 438 00:23:53,680 --> 00:23:56,600 Speaker 1: but it was going to be announced. And then he 439 00:23:56,760 --> 00:23:58,360 Speaker 1: came back to me at the end of the day 440 00:23:58,400 --> 00:24:01,719 Speaker 1: and said, Mum, you were It was a text message, 441 00:24:01,720 --> 00:24:03,400 Speaker 1: it wasn't a call. I said, Mummy, you know you're 442 00:24:03,400 --> 00:24:06,560 Speaker 1: all lived the news today. Are you important or something? 443 00:24:06,760 --> 00:24:12,280 Speaker 1: Dot dot dot dot dot. Thanks for listening to hear 444 00:24:12,359 --> 00:24:14,919 Speaker 1: more of my interviews. You can subscribe and download my 445 00:24:14,960 --> 00:24:18,280 Speaker 1: podcast on Spotify, Apple, or wherever you listen.