WEBVTT - Jane Fraser 0:00:03.320 --> 0:00:06.800 A major trailblazer in the financial service system is Jane Fraser. 0:00:07.320 --> 0:00:09.600 Two years ago, she became the CEO of City and 0:00:09.640 --> 0:00:12.000 in doing so, became the first woman to had a 0:00:12.039 --> 0:00:15.160 major money center bank. Today, City and other major banks 0:00:15.160 --> 0:00:18.360 in the United States are facing challenges to the banking system. 0:00:18.440 --> 0:00:21.119 I sat down with Jane Fraser recently to talk about 0:00:21.160 --> 0:00:24.080 these and other challenges. Anything new in the banking world. 0:00:26.680 --> 0:00:30.920 It's been a quiet week, quiet week, David, So so 0:00:31.280 --> 0:00:34.680 let's talk about what has been going on. Let's start 0:00:34.720 --> 0:00:39.680 with the Easy Ones Silicon Valley Bank. What went wrong there? Well, 0:00:40.159 --> 0:00:45.519 before we dive into that, I've worked in financial markets 0:00:45.600 --> 0:00:48.839 all around the world, and I have to say we're 0:00:48.920 --> 0:00:51.720 very lucky in America. This is the best financial system 0:00:51.960 --> 0:00:57.080 in the world. It is the end factivally okay, but 0:00:57.200 --> 0:01:00.279 despite it being the best, we have some problems time 0:01:00.320 --> 0:01:03.000 to time. Yeah, but they're they're isolated problems. So when 0:01:03.040 --> 0:01:05.720 you when you look at it, the financial systems is 0:01:05.760 --> 0:01:09.199 broadest deep here as competitive. We've bought some large banks 0:01:09.240 --> 0:01:12.680 that are well capitalized and a source of strength. At 0:01:12.760 --> 0:01:17.720 the moment, we have medium sized banks, regional banks, and 0:01:17.800 --> 0:01:21.679 buy a large they are equally well capitalized, serving their 0:01:21.680 --> 0:01:24.679 communities play an important part in the banking system. This 0:01:24.760 --> 0:01:29.120 is quite isolated, okay, but people are still interested in 0:01:29.200 --> 0:01:34.560 hearing about it. So, so your bank is well capitalized. 0:01:34.640 --> 0:01:36.120 Your bank, I should have said, as a bank with 0:01:36.200 --> 0:01:39.640 about two hundred and thirty thousand employers and about an 0:01:39.640 --> 0:01:44.600 eighty five billion dollar market capitalization. So your bank is 0:01:44.600 --> 0:01:47.040 in good shape. And your bank is the fourth biggest 0:01:47.040 --> 0:01:49.520 bank in the United States, that right, JP, Morgan Bank 0:01:49.560 --> 0:01:52.160 of America, Wells Fargo, and then City. There is a 0:01:52.160 --> 0:01:54.960 bank on the West coast called Silicon Valley Bank, or 0:01:55.000 --> 0:01:58.120 there was a bank there not as well capitalized. I 0:01:58.200 --> 0:02:00.480 mean that the regulator is not under seeing what was 0:02:00.520 --> 0:02:02.200 going on, or are people in the banking where are 0:02:02.240 --> 0:02:04.760 people like you? Were you surprised by what happened. So 0:02:04.960 --> 0:02:07.160 you had a combination of two pieces. You've had the 0:02:07.200 --> 0:02:12.200 macro and some idiosyncratic and factors around Silicon Valley Bank, 0:02:12.560 --> 0:02:15.920 but then you also had the impact accelerated by social 0:02:15.919 --> 0:02:18.560 media of what went down and the rates curve and 0:02:18.680 --> 0:02:20.880 the increase in rates that's been most we've seen the 0:02:20.919 --> 0:02:23.960 fastest and the steepest in forty years. So there's a 0:02:23.960 --> 0:02:28.120 bit of pain that comes from that. Secondly, you did 0:02:28.160 --> 0:02:31.520 have idiosyncratic factors I think is the polite British way 0:02:31.560 --> 0:02:35.200 of describing them in Silicon Valley Bank. So as all 0:02:35.200 --> 0:02:37.640 this played out, you saw some pretty serious holes in 0:02:37.680 --> 0:02:40.799 their balance sheet management, and they had a very concentrated 0:02:40.840 --> 0:02:44.840 client base, and that client base ended up burning cash 0:02:44.960 --> 0:02:50.640 much faster than anticipated, and they ended up wanting to 0:02:50.720 --> 0:02:53.120 raise capital and it went down pretty quick. In the 0:02:53.160 --> 0:02:55.560 Greater Session in seven o eight or so, the US 0:02:55.680 --> 0:03:00.320 government passed TARP legislation, and under the TARP legislation, large 0:03:00.320 --> 0:03:04.160 amounts of capital were injected into banks, including City and 0:03:04.240 --> 0:03:09.040 effectively that meant that the shareholders, the creditors, and the 0:03:09.120 --> 0:03:13.480 depositors were all protected. This time around Silicon Valley Bank, 0:03:13.720 --> 0:03:17.239 was only the depositors work protected or were decision made 0:03:17.240 --> 0:03:19.840 by the bide administration others over the weekend. Do you 0:03:19.840 --> 0:03:22.240 think that was the right decision to protect only the 0:03:22.240 --> 0:03:24.919 depositors and say goodbye to the shareholders and goodbye to 0:03:24.960 --> 0:03:28.359 the creditors. I think it's very important to protect the 0:03:28.400 --> 0:03:32.880 depositors right now. The banking system everywhere around the world 0:03:32.880 --> 0:03:36.080 depends on confidence, and that confidence has to be in 0:03:36.120 --> 0:03:39.440 the safety and security of deposits. So in terms of 0:03:39.560 --> 0:03:43.200 the most important job here they did the most important job, 0:03:43.440 --> 0:03:46.280 which is making sure the depositors will whole. So in 0:03:46.320 --> 0:03:48.840 the old days when there were bank runs, used to 0:03:48.840 --> 0:03:51.560 see people lined up outside the street and get their 0:03:51.600 --> 0:03:54.680 money out. Now you're just on your iPhone or whatever 0:03:54.760 --> 0:03:56.680 phone you have, you can take your money out. So 0:03:57.080 --> 0:03:59.760 money moved so quickly was at a factor as well. 0:03:59.800 --> 0:04:01.800 And having the money get out of a bank so 0:04:01.880 --> 0:04:03.240 quickly on the weight and line, you can just do 0:04:03.280 --> 0:04:06.040 it over there. It is a complete game changer from 0:04:06.040 --> 0:04:09.400 what we've seen before. David, You're absolutely right. There were 0:04:09.400 --> 0:04:13.520 a couple of tweets and then this thing went down 0:04:13.640 --> 0:04:18.000 much faster than has appened in history. And frankly, I 0:04:18.000 --> 0:04:21.760 think the regulators did a good job in responding very quickly, 0:04:22.400 --> 0:04:25.360 because normally you have longer to respond to this, so 0:04:25.400 --> 0:04:28.640 they acted with quite a lot of speak even how 0:04:28.680 --> 0:04:31.359 quickly this happened. So some people say you have a 0:04:31.440 --> 0:04:35.400 moral hazard when you protect people. So by protecting all 0:04:35.400 --> 0:04:39.279 the depositors in Silicon Valley Bank, the implication was that 0:04:39.480 --> 0:04:41.840 if somebody else has a problem, will protect them and 0:04:41.880 --> 0:04:44.080 so forth, And so the two hundred and fifty thousand 0:04:44.080 --> 0:04:46.880 dollars limit is meaningless more or less? Or do you 0:04:46.920 --> 0:04:50.480 think the federals are and the Secretary of Treasurers saying 0:04:50.680 --> 0:04:53.080 we're not going to protect every depositor or we're going 0:04:53.120 --> 0:04:57.240 to protect certain depositors. I don't think they need to 0:04:57.279 --> 0:05:00.480 go out right now because the banking system is pretty sound, 0:05:00.680 --> 0:05:03.680 and we're talking about a few banks. We had it 0:05:03.760 --> 0:05:07.680 from the Chairman pal today. This is not something that 0:05:07.800 --> 0:05:11.440 is spread across the entire banking system. Isn't like it 0:05:11.520 --> 0:05:15.159 was last time. This is not a credit crisis. This 0:05:15.240 --> 0:05:18.120 is a situation where it's a few banks that have 0:05:18.240 --> 0:05:20.880 some problems and it's better to make sure that we 0:05:21.000 --> 0:05:23.359 nip that in the bud. Not to pick on the 0:05:23.400 --> 0:05:27.360 West Coast, but there's another West Coast bank, First Republic Bank, 0:05:27.400 --> 0:05:29.880 which is around the country but based in San Francisco, 0:05:30.279 --> 0:05:33.320 and they've had some problems and they've had gigantic declining 0:05:33.360 --> 0:05:36.120 their market value and so forth. Do you expect that 0:05:36.160 --> 0:05:41.200 somebody will bail them out or buy them? Well, I'm 0:05:41.200 --> 0:05:43.880 not going to comment in depth on First Republic because 0:05:43.920 --> 0:05:47.120 they are actively working through the challenges that they're facing 0:05:47.200 --> 0:05:52.240 right now. What you saw last week was a number 0:05:52.279 --> 0:05:55.240 of the large banks eleven of us got together to 0:05:55.320 --> 0:05:59.680 put a large capital or deposit injection into them to 0:05:59.800 --> 0:06:02.280 how by the time to make sure that they could 0:06:02.279 --> 0:06:05.760 come up with the right solution for the restructuring that's needed. 0:06:05.960 --> 0:06:08.560 So the large banks and others put in roughly thirty 0:06:08.560 --> 0:06:10.479 billion dollars of the past. So I think you put 0:06:10.520 --> 0:06:13.720 in roughly five billion or something like that. So how 0:06:13.720 --> 0:06:15.480 did that happen? It Jamie Diamond call you up and 0:06:15.480 --> 0:06:17.480 say you have five billion dollars you don't really need 0:06:17.520 --> 0:06:20.000 and you can put it in. The first republican is 0:06:20.000 --> 0:06:21.839 that you have to go to your board to say 0:06:21.839 --> 0:06:24.080 I need to get five billion dollars somewhere. I mean, 0:06:24.120 --> 0:06:26.160 how or how do you make that decision? And was 0:06:26.160 --> 0:06:28.080 it you just say that, Jamie, I'll call you back, 0:06:28.120 --> 0:06:31.679 I'll think about it, or how does that work? So 0:06:34.000 --> 0:06:36.560 what are the great things about this? Was actually that 0:06:36.600 --> 0:06:38.880 the banks did all come back together. Because you think 0:06:38.920 --> 0:06:41.160 of it, we're all pretty We usually try and kill 0:06:41.200 --> 0:06:43.200 each other in different deals that we're trying to do, 0:06:43.400 --> 0:06:46.080 so there's a lot of competition between us. But in 0:06:46.120 --> 0:06:49.320 this instance, this is one where yeah, we're in a 0:06:49.360 --> 0:06:52.279 strong position. We want to stop what could have been 0:06:52.720 --> 0:06:55.240 a problem. And we all know when there is a 0:06:55.279 --> 0:06:59.960 confidence crisis, the logic that takes over, isn't it necessary? 0:07:00.040 --> 0:07:02.960 Really rational? So we wanted to go and help protect 0:07:03.040 --> 0:07:04.880 the system. It's in the interests to do so. So 0:07:05.040 --> 0:07:08.280 despite this being quite a divisive environment that we're all 0:07:08.279 --> 0:07:11.080 operating in, this is an instance of the bank's coming 0:07:11.080 --> 0:07:14.120 together and saying, okay, what can we do here to 0:07:14.160 --> 0:07:16.880 support a system that we have confidence in? And you 0:07:16.960 --> 0:07:21.040 don't put five billion dollars into the system through the 0:07:21.080 --> 0:07:23.600 generosity of your own heart. You do it because you 0:07:23.720 --> 0:07:27.000 have confidence in the system itself. You expect to get 0:07:27.000 --> 0:07:30.520 their money back eventually. Yes, okay, So Jamie Diamond is 0:07:30.560 --> 0:07:32.040 a great banker. I think he's been the head of 0:07:32.640 --> 0:07:35.960 Japan Worker for seventeen years something like that. Jamie Diamond 0:07:37.440 --> 0:07:42.200 well regarded. But why do you think it is the 0:07:42.280 --> 0:07:45.000 case that he's calling around and doing this and not 0:07:45.040 --> 0:07:47.440 the Secretary Treasury, the Chairman of the Federal Reserved, the 0:07:47.480 --> 0:07:49.440 head of the FDIC. Why is it a non government 0:07:49.480 --> 0:07:51.720 person is doing this. I want to thought a government 0:07:51.720 --> 0:07:53.680 person would do this. David, Why do you think that 0:07:53.760 --> 0:07:56.440 Janet wasn't calling around doing it? Do you believe everything 0:07:56.480 --> 0:07:59.720 you read in the newspapers? Tis because when people and 0:07:59.840 --> 0:08:02.240 who do something good, they usually have the press know 0:08:02.320 --> 0:08:05.560 about it. So but maybe she was going round. I'm 0:08:05.560 --> 0:08:07.760 sure she was. But Jamie seems to be getting all 0:08:07.800 --> 0:08:09.600 the credit if credit is the right word, or is 0:08:09.600 --> 0:08:12.200 that not fair to give him the credit? Oh? I 0:08:12.680 --> 0:08:14.800 Jamie played a role. I think we all played a role, 0:08:14.840 --> 0:08:17.400 and so did There was a very active discussion over 0:08:17.440 --> 0:08:20.640 that weekend. Which city consider buying First Republic or you're 0:08:20.640 --> 0:08:24.160 not interested in No, you're not buying? Okay, another bank, 0:08:26.000 --> 0:08:30.320 but Credit Swiss. Credit Swiss seemed to dissolve very very quickly. 0:08:31.080 --> 0:08:33.959 Were you surprised at how quickly that bank kind of 0:08:34.000 --> 0:08:36.160 went away? After about one hundred years of being around. 0:08:36.400 --> 0:08:38.640 So the nice thing, we're about three or four banks 0:08:38.640 --> 0:08:41.400 out of the thousands that are here in the States 0:08:41.400 --> 0:08:43.680 and the rest of it. So let's put that in perspective. 0:08:44.040 --> 0:08:46.480 So Credit Suis. I don't think anyone was falling off 0:08:46.480 --> 0:08:50.600 their chair. The Credit Suis ultimately ended up where it did. 0:08:50.640 --> 0:08:52.520 It was really a question of time. It's been a 0:08:52.559 --> 0:08:55.280 troubled institution for a long time. Those of you who 0:08:55.280 --> 0:08:59.480 don't know it, it's a very global bank in Swiss. 0:08:59.720 --> 0:09:02.440 It's got a very strong operation in Switzerland, good wealth 0:09:02.520 --> 0:09:06.720 management in Asia, investment bank here in the States and 0:09:06.800 --> 0:09:09.240 around the world. But it's had a lot of issues. 0:09:10.080 --> 0:09:12.640 It's had a lot of management instability, It's had a 0:09:12.720 --> 0:09:16.559 number of different crises and things that have hit it. Well. 0:09:16.600 --> 0:09:19.040 Credit Swiss has some great private bankers and they have 0:09:19.120 --> 0:09:22.400 some great clients. Are the city bankers calling up at 0:09:22.400 --> 0:09:25.319 Credit Swiss former employees and saying you should come here 0:09:25.400 --> 0:09:27.640 now or something like that, I think they're calling us 0:09:27.760 --> 0:09:30.319 they are, okay, all right, okay, growing up? What did 0:09:30.360 --> 0:09:32.400 you say wanted to be the CEO of city when 0:09:32.400 --> 0:09:34.520 you're growing up? What did you think? I want to 0:09:34.520 --> 0:09:36.400 be a doctor when I grew up? But I was 0:09:36.480 --> 0:09:40.000 really lousy at biology, So that kind of news that one. 0:09:40.480 --> 0:09:41.959 There's a lot of people who want to go to 0:09:42.040 --> 0:09:46.000 medical school. So okay, you grew up in Edinburgh area, yep? 0:09:46.080 --> 0:09:50.679 I did? And were your parents bankers? No, definitely not so. 0:09:50.800 --> 0:09:54.920 My father was a Scottish accountant, which meant you you're 0:09:54.960 --> 0:09:58.800 not really relying on parental generosity and extra pocket money 0:09:59.400 --> 0:10:02.960 from a scot Tish accountant as a father. So I 0:10:03.040 --> 0:10:05.400 used to earn my pocket money on the golf course 0:10:05.400 --> 0:10:07.560 at Saint Andrew's counting. You would not know it from 0:10:07.640 --> 0:10:10.600 my golf game, but I'm truth's better than mine. So 0:10:10.720 --> 0:10:13.400 you went to Cambridge after you graduated? What did you 0:10:13.480 --> 0:10:17.439 do after I graduate? I joined Golbyn as an analyst. 0:10:18.600 --> 0:10:20.959 That's an easy job to get, an easy job when 0:10:20.960 --> 0:10:23.040 you haven't you don't work more than thirty forty hours 0:10:23.040 --> 0:10:25.760 a week. Yes, yeah, yes, So how many years did 0:10:25.760 --> 0:10:27.480 you do that? So? I worked to Goldman for a 0:10:27.520 --> 0:10:29.959 couple of years and I was I was young when 0:10:30.000 --> 0:10:32.880 I started, and everyone was I was the boring girl 0:10:32.920 --> 0:10:37.840 from Scotland. Everyone else was European, spoke multiple languages and 0:10:38.120 --> 0:10:40.440 was a lot more exotic and interesting than me. So 0:10:40.600 --> 0:10:43.080 after I finished the Annist program, I thought I'd better 0:10:43.120 --> 0:10:45.280 make myself a bit more interesting. So I moved to 0:10:45.360 --> 0:10:49.520 Spain and speak Spanish before I didn't. So now you 0:10:49.600 --> 0:10:57.439 speak Spanish perfect amenty, Well, I know one word, maybe 0:10:57.440 --> 0:11:01.760 see or something like that. I don't ever, but I 0:11:02.400 --> 0:11:05.400 you know, my language skills are very limited, so so 0:11:05.760 --> 0:11:11.320 luckily you have other talents though, which But so you 0:11:11.320 --> 0:11:12.760 do there for a couple of years and then you 0:11:12.800 --> 0:11:15.560 decide to go where America? All right? And where did 0:11:15.559 --> 0:11:19.280 you want to go in America? I did the same again, 0:11:19.360 --> 0:11:22.199 taught my way into Harvard Business School, and I was 0:11:22.280 --> 0:11:25.440 fascinated by the American machine. And if you've spend a 0:11:25.480 --> 0:11:27.840 bit of time in Europe and growing up in the 0:11:28.000 --> 0:11:31.360 you know, the eighties, seventies and eighties, it's fascinating to 0:11:31.559 --> 0:11:35.480 America is just something you want to try and understand 0:11:35.559 --> 0:11:38.640 in the American economy and the American entrepreneurs not someone 0:11:38.679 --> 0:11:40.280 you ever wanted to bet again. So when you went 0:11:40.320 --> 0:11:43.199 to Harvard Business School, you entered in ninety two something 0:11:43.240 --> 0:11:45.880 like that? That's right? Did you entered ninety two? Were 0:11:45.880 --> 0:11:48.040 there are a lot of women in your class, probably 0:11:48.040 --> 0:11:51.400 about twenty four twenty five percent something like that, Yes, 0:11:51.480 --> 0:11:54.200 and enough of us to cause trouble? All right? You 0:11:54.240 --> 0:11:56.720 graduate from Harvard Business School and then you decide to 0:11:56.760 --> 0:12:00.880 go to McKenzie, Yes, I did. And why did you 0:12:00.880 --> 0:12:04.319 want to be a consultant? Well, first of all was 0:12:04.400 --> 0:12:06.439 why didn't Why didn't I go back into banking at 0:12:06.440 --> 0:12:08.640 that time? And I've been in banking in the eighties 0:12:08.679 --> 0:12:12.200 where there weren't many women in banking, unlike the business school, 0:12:13.320 --> 0:12:17.280 they wore suits with very big shoulder pads, and they 0:12:17.280 --> 0:12:21.120 were more scary than the men um You remember that, 0:12:21.200 --> 0:12:24.679 you remember the era. And so when I looked at 0:12:24.800 --> 0:12:30.199 the consulting, particularly McKinsey, I like partnerships. I think partnerships 0:12:30.240 --> 0:12:33.320 are great places to grow up. The apprenticeship models wonderful 0:12:33.920 --> 0:12:39.120 global institution and firm, and also it was quite strategic 0:12:39.800 --> 0:12:41.800 in what they were looking at. It was similar issues 0:12:41.840 --> 0:12:44.319 to M and A at GOUM. But I thought I 0:12:44.320 --> 0:12:47.040 would have a chance of having a family a bit 0:12:47.080 --> 0:12:50.719 more predictability met in the work schedule. So you did 0:12:50.720 --> 0:12:53.439 it for ten years, roughly ten years, and you had 0:12:53.440 --> 0:12:56.720 two children during that time. So you you go to McKinsey, 0:12:56.760 --> 0:12:58.600 you work your way up, you become a partner there 0:12:59.040 --> 0:13:01.920 and you being a partner mckinsi's a great job. Why 0:13:01.960 --> 0:13:05.280 did you decide to leave to go to city. Yeah. 0:13:05.360 --> 0:13:08.000 I became a mum at the same time as I 0:13:08.000 --> 0:13:12.079 became a partner, and I worked part time all the 0:13:12.120 --> 0:13:18.080 way through my partnership years. And McKinsey was fantastic about 0:13:18.080 --> 0:13:21.080 that because I was able to spend time with the 0:13:21.559 --> 0:13:24.719 kids before they went into school, but then when they 0:13:24.760 --> 0:13:27.760 got when they were then at school that I felt like, Okay, 0:13:27.840 --> 0:13:32.520 I can go back full time working again, and I 0:13:32.640 --> 0:13:34.480 you know, I honestly I felt like it was time 0:13:34.520 --> 0:13:36.959 that I could prove that I would I could do it, 0:13:37.080 --> 0:13:39.480 rather than just advice. All right, she went to city 0:13:39.559 --> 0:13:42.400 at the time. Did you think a woman could become 0:13:42.559 --> 0:13:44.640 or would ever become the head of city? I honestly 0:13:44.679 --> 0:13:48.240 never thought about it. It mean, at that point, it's 0:13:48.320 --> 0:13:51.000 a firm that there were quite a few women around 0:13:51.040 --> 0:13:53.640 in I'd been in an environment was always very supportive 0:13:53.679 --> 0:13:56.760 around it and fantastic mele mentors and others, and it 0:13:56.880 --> 0:13:59.240 wasn't It was just never something I thought about. This 0:13:59.280 --> 0:14:02.560 was twenty years ago, so I was just enjoying the 0:14:02.640 --> 0:14:05.200 day job. So you had a series of jobs everyone 0:14:05.240 --> 0:14:07.360 you were the CEO of this division or that division 0:14:07.360 --> 0:14:08.800 and so forth. And one time they asked you to 0:14:08.800 --> 0:14:11.880 move to Latin America to be the CEO of Latin America. 0:14:11.920 --> 0:14:13.200 Did you think that was a dead end, You're going 0:14:13.280 --> 0:14:14.800 to move to Latin America get out of the way 0:14:14.800 --> 0:14:16.560 of the succession, or did you think that was a 0:14:16.600 --> 0:14:20.120 way to get promoted. It was a big turnaround role. 0:14:20.520 --> 0:14:22.080 And it's one of those ones you say if I 0:14:22.120 --> 0:14:25.440 did a good job, then that was going to put 0:14:25.480 --> 0:14:28.600 me in good position for bigger, bigger opportunities head And 0:14:28.640 --> 0:14:31.160 if I did a bad job, then you know, so 0:14:31.320 --> 0:14:33.520 be it. You wouldn't you weren't afraid they would forget you. 0:14:33.640 --> 0:14:36.160 You're down in Brazil or something, and you weren't afraid 0:14:36.160 --> 0:14:39.200 they would forget you and everything like that. Okay, so 0:14:39.240 --> 0:14:41.320 you did a good job, you come back and you're 0:14:41.360 --> 0:14:43.560 the head of the Global Consumer Bank. What is that 0:14:43.680 --> 0:14:48.040 Global Consumer Bank in City? So that that's retail banking. 0:14:48.160 --> 0:14:50.520 That's a credit card, which I believe you are a 0:14:50.560 --> 0:14:53.600 proud owner of a City credit card. David, I am 0:14:53.720 --> 0:14:57.040 I have that in here. I can't. I'm getting I 0:14:57.040 --> 0:14:59.360 don't have enough frequent Flyer miles on it, though I'm 0:14:59.400 --> 0:15:01.760 trying to. You told me I'm not qualified for my 0:15:01.880 --> 0:15:04.120 frequent fire miles. But yeah, you've got the wrong card. 0:15:04.520 --> 0:15:07.280 Is it a it? Is this the best credit card 0:15:07.320 --> 0:15:12.640 you can get? So, David, you have the one with 0:15:12.720 --> 0:15:18.200 our wonderful partner of American Airlines and they yours is black. 0:15:18.240 --> 0:15:21.800 I can mind which is better. You've got to ask 0:15:21.840 --> 0:15:25.320 for it, David. Okay, all right, Well, although I suspect 0:15:25.320 --> 0:15:27.320 you may not be flying quite as much on the 0:15:27.400 --> 0:15:33.720 commercial airlines. Currently, many CEOs are under pressure to take 0:15:33.840 --> 0:15:38.560 positions on public policy matters, So positions are on voting 0:15:38.680 --> 0:15:42.720 rights or or um climate change. So where do you 0:15:42.760 --> 0:15:45.480 think CEO should be getting in the middle of talking 0:15:45.520 --> 0:15:47.560 about those kind of things or do you try to 0:15:47.600 --> 0:15:51.880 not do that when they matter to your business model? Um, 0:15:52.000 --> 0:15:55.680 and when they're important for progress. UM. If you're a bank, 0:15:55.760 --> 0:15:58.480 you care a little about economic growth and progress around 0:15:58.520 --> 0:16:01.360 the world, So yes, we will speak out on that. Also, 0:16:01.360 --> 0:16:04.320 if it's very important to our people the communities that 0:16:04.360 --> 0:16:06.880 we're in, it will be topics we'll talk about. We 0:16:06.960 --> 0:16:10.960 don't view that as being political, but it's about what 0:16:11.000 --> 0:16:14.040 do we stand for as a bank? Now, what about diversity, 0:16:14.200 --> 0:16:16.960 equity and inclusion. What are you doing to make sure 0:16:17.120 --> 0:16:20.560 you have other diversity standards met in the bank? It's 0:16:20.720 --> 0:16:22.800 it's a really important part of the bank because I 0:16:22.800 --> 0:16:27.320 think because we've got people from everywhere who work at 0:16:27.400 --> 0:16:30.440 City and they want to work for an American enterprise. 0:16:31.240 --> 0:16:36.600 It's a real compelling point of the bank in attracting 0:16:36.680 --> 0:16:41.520 talent from all over the world for City. My predecessor 0:16:41.880 --> 0:16:44.400 really was very focused on making sure that we had 0:16:44.440 --> 0:16:47.840 strong diversity of all types in the bank, and we 0:16:47.920 --> 0:16:52.560 worked out that radical transparency is very, very valuable. So 0:16:52.600 --> 0:16:57.360 we put out three year targets on representation and we 0:16:58.200 --> 0:17:02.440 disclose those every close exactly what they are. The targets 0:17:02.480 --> 0:17:05.959 we have on both recruiting and in retention and in 0:17:06.119 --> 0:17:10.360 promoting or in everybody's schoolcard. And we also have pay equity, 0:17:10.720 --> 0:17:13.720 so every single year we measure you have a third 0:17:13.760 --> 0:17:17.480 party come in and make sure that every woman is 0:17:17.520 --> 0:17:20.480 paid exactly the same as a man in the same 0:17:20.560 --> 0:17:23.520 job performing at the same level. When did you realize 0:17:23.600 --> 0:17:26.280 for the first time I could be or you could 0:17:26.280 --> 0:17:28.600 be the CEO of the bank. I mean, you know, 0:17:28.720 --> 0:17:30.080 there are a lot of people. You have two hundred 0:17:30.080 --> 0:17:32.399 and thirty thousand employees, a lot of them want to 0:17:32.400 --> 0:17:34.639 be When did you realize for the first time you 0:17:34.960 --> 0:17:38.160 had a chance to get that when I was made 0:17:38.240 --> 0:17:41.680 president of the bank. Because up until then you just 0:17:41.760 --> 0:17:44.280 you don't really have a sense. But that was a 0:17:44.359 --> 0:17:49.920 point when Mike and John had a conversation about being 0:17:49.960 --> 0:17:52.880 a likely successor, but no guarantees in life, and I'd 0:17:52.880 --> 0:17:56.320 better do a good job. Okay. So your predecessor was 0:17:56.359 --> 0:18:00.960 Michael Corbett. Yeah, he retired about two years ago. Succeeded him. 0:18:01.040 --> 0:18:03.639 What was the biggest challenge you had in becoming the 0:18:03.720 --> 0:18:09.800 CEO right away? It was COVID, So this was becoming 0:18:09.880 --> 0:18:12.480 CEO during COVID is not the easiest because you know, 0:18:12.680 --> 0:18:15.640 one's used to going around going to different sites, seeing 0:18:15.680 --> 0:18:19.359 our people, seeing our clients in person. And while Zoom 0:18:19.480 --> 0:18:22.240 did an amazing job, it is not the same and 0:18:22.320 --> 0:18:24.920 so I know you have to learn how to lead 0:18:24.960 --> 0:18:28.400 in a different way. Today. City is a bank that 0:18:28.560 --> 0:18:31.640 is announced it's changing its strategy and you now want 0:18:31.640 --> 0:18:35.960 to be a consumer and institutional business bank in the 0:18:36.000 --> 0:18:39.960 United States? Is that right? Yeah, and you're getting out 0:18:39.960 --> 0:18:42.520 of the consumer business outside of the United States. So 0:18:42.560 --> 0:18:44.880 what we've said we are rather than what we're not, 0:18:45.600 --> 0:18:49.560 is that it's a pretty extraordinary bank in its history 0:18:50.640 --> 0:18:55.120 and its presence globally. It's uniquely operate opens the door 0:18:55.160 --> 0:18:57.760 as a bank in a hundred different countries. So the 0:18:58.520 --> 0:19:02.000 City is to be the pre eminent banking partner for 0:19:02.160 --> 0:19:06.040 companies and for investors and for individuals across border needs. 0:19:07.240 --> 0:19:09.880 And that's the vision of the bank. That's the will 0:19:09.920 --> 0:19:15.160 serve that client base as their absolutely critical partner. Hey see, 0:19:15.160 --> 0:19:17.800 you've sold a number of your international consumer businesses and 0:19:17.920 --> 0:19:22.320 you've an Now you're trying to sell your business in Mexico, 0:19:22.440 --> 0:19:25.680 the consumer business business. Who are you going to sell 0:19:25.720 --> 0:19:29.439 that too? Oh, we've been We've been fortunate to have 0:19:29.480 --> 0:19:31.520 a lot of interest there. Look, we looked at we 0:19:31.560 --> 0:19:36.359 looked at a consumer banking and we could see that. Originally, 0:19:36.400 --> 0:19:38.359 the view had been that you would get a lot 0:19:38.400 --> 0:19:41.880 of global scale and consumer banking, and we were very 0:19:41.920 --> 0:19:45.240 strong in a number of different geographies. But the reality 0:19:45.400 --> 0:19:48.320 is you don't get as much scale globally. It's much 0:19:48.320 --> 0:19:51.160 more about local scale and those businesses. So we decided, 0:19:51.400 --> 0:19:53.639 let's focus. We want the bank to be simple. We 0:19:53.720 --> 0:19:56.440 want to be truly excellent or what we do. And 0:19:56.480 --> 0:19:59.280 that's better if you're a more focused bank around for 0:19:59.320 --> 0:20:02.359 your business life. So that's right, that's the path we're on. 0:20:02.640 --> 0:20:06.159 So the bank stock under your predecessors and to some 0:20:06.240 --> 0:20:08.840 eccenter you hasn't really moved in ten years. Is that 0:20:08.920 --> 0:20:12.440 a concern. Well, we're transforming the bank to make sure 0:20:12.480 --> 0:20:15.960 that we're in a very different position. So we're changing 0:20:16.000 --> 0:20:18.119 the strategy of the bank because we talked about and 0:20:18.160 --> 0:20:22.440 that entails selling sixty five thousand employees. It's twenty five 0:20:22.520 --> 0:20:25.280 percent of our employee base, so we can really focus 0:20:25.280 --> 0:20:29.159 and double down on the businesses that makes sense. Two 0:20:29.560 --> 0:20:32.479 thirty thousand you have, you're selling sixty five thousand. Yes, 0:20:32.920 --> 0:20:35.920 While yes, it's a lot, and I think it's under 0:20:35.960 --> 0:20:39.720 the belief that what where we truly excel. We will 0:20:39.760 --> 0:20:45.240 move every single day four trillion dollars of volume for 0:20:45.480 --> 0:20:48.960 five thousand multinational firms and there's no other bank in 0:20:49.000 --> 0:20:52.400 the world that can do that. That's an incredible asset 0:20:52.640 --> 0:20:56.400 for America. It's a strategic asset for the States because 0:20:56.440 --> 0:20:59.960 you'd much rather have American companies operating on an America 0:21:00.040 --> 0:21:03.960 and banking rails and not foreign banking rails, particularly these days. 0:21:04.280 --> 0:21:07.120 So that's what we're focusing the bank around, is that 0:21:07.240 --> 0:21:10.679 client base. And it's a big transformation. David right, This 0:21:10.840 --> 0:21:14.720 is bold. This takes some courage to do. We're making 0:21:14.840 --> 0:21:17.800 really good progress on it, and we're putting a lot 0:21:17.840 --> 0:21:21.800 of investment into modernizing the bank because we've had some 0:21:21.840 --> 0:21:24.840 regulatory orders against us as well, to make sure that 0:21:24.880 --> 0:21:27.720 we make the investments we need to and making sure 0:21:27.760 --> 0:21:32.040 the culture is there of real excellence. But also to 0:21:32.119 --> 0:21:34.760 be a human bank. We've talked about that being important 0:21:35.400 --> 0:21:38.600 or put all of that together. That's a lot of transformations, 0:21:38.640 --> 0:21:41.560 a lot of work, but we're really we're determined around it, 0:21:41.920 --> 0:21:45.280 and we're completely convinced that that puts the bank into 0:21:45.320 --> 0:21:50.040 a different profitability, different return profile and ultimately the benefit 0:21:50.040 --> 0:21:52.760 of our shareholders. Suppose I'm listening to what you say, 0:21:52.760 --> 0:21:56.359