WEBVTT - BNY CEO Robin Vince Talks US Deficit And US Election

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news, IMFN. World Bank Annual

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<v Speaker 1>Meetings are now underway in Washington, DC, and that brings

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<v Speaker 1>together finance ministers, central bankers, and a lot of big

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<v Speaker 1>policymakers to that town. And of course it also brings

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<v Speaker 1>a lot of the big bank CEOs as well, discussions

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<v Speaker 1>about the global economy, fiscal policy, as well as regulation.

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<v Speaker 1>Please to say that one of those big CEOs joins

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<v Speaker 1>us right now, Robin Vince heads be and why the

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<v Speaker 1>oldest bank in America and one of the biggest custodians

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<v Speaker 1>of assets in the world. He's sitting down right now

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<v Speaker 1>alongside our bury own Lisa Abramowitz.

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<v Speaker 2>Lisa, thank you so much.

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<v Speaker 3>Romain.

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<v Speaker 2>Yeah, this is the confab of everyone in finance and

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<v Speaker 2>politics and policymaking. And we have someone who has the

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<v Speaker 2>first loan made to the United States when it was

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<v Speaker 2>written up in seventeen eighty nine during the time of

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<v Speaker 2>Alexander Hamilton. Robin Vince, thank you so much for being here.

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<v Speaker 2>I want to start with the sort of dueling ideas here.

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<v Speaker 2>We're talking about the election, the uncertainty. Heard from Romaine

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<v Speaker 2>and Scarlett about maybe it's going to be a week

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<v Speaker 2>before we know the outcome. What does this mean is

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<v Speaker 2>the US getting more isolated, and yet people seem very

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<v Speaker 2>enthusiastic about the US and investing in this economy. Can

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<v Speaker 2>you explain how much you're hearing that?

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<v Speaker 3>Well, there's certainly been a theme here at the IMF

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<v Speaker 3>World Bank meetings, and that's been true, particularly actually from

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<v Speaker 3>foreign clients that I've been talking to foreign policymakers. There's

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<v Speaker 3>frankly a lot of envy about just how well the

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<v Speaker 3>US economy has performed over the course of the past

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<v Speaker 3>two or three years. It wasn't necessarily the expectation that

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<v Speaker 3>we would have an economy today that has actually been

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<v Speaker 3>performing quite well. Now it doesn't perform as well for everybody,

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<v Speaker 3>and that is clearly an issue that the politicians are

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<v Speaker 3>grappling with. But for those participants in the stock market,

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<v Speaker 3>it's been a boom for companies that have been investing

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<v Speaker 3>in the US. They've been able to benefit from the

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<v Speaker 3>various strengths of the US offers, energy independence, having a

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<v Speaker 3>little bit of light industrial policy in the US, labor technology,

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<v Speaker 3>those things have been a real benefit and a tailwind

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<v Speaker 3>for the US economy.

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<v Speaker 2>There's an issue here where people are talking about maybe

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<v Speaker 2>the US is going to lose its supremacy in some

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<v Speaker 2>of these areas, especially given the amount of debt that

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<v Speaker 2>the United States has and the fact that it will

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<v Speaker 2>probably have to issue more and the deficit is getting

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<v Speaker 2>a lot deeper. As someone who sees a lot of

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<v Speaker 2>the transactions, who processes the transactions of Treasury trades and

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<v Speaker 2>works with the Federal Reserve, how much are you seeing this?

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<v Speaker 3>Well? People do talk, for sure about the fact we

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<v Speaker 3>have to be humble about the fact that the world

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<v Speaker 3>can change pretty quickly, and we've had enough reminders of

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<v Speaker 3>that over the past decade that one has to plan

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<v Speaker 3>for the future, but one also has to prepare for

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<v Speaker 3>the worst, and that's good sensible approach to leading a business.

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<v Speaker 3>We talk to our clients all the time about that

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<v Speaker 3>looking around the corners. Don't assume that rates are going

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<v Speaker 3>to move in a certain direction. They could surprise us.

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<v Speaker 3>Having said all of that, the benefits that the US

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<v Speaker 3>has right now are considerable, and that is what we

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<v Speaker 3>are hearing from our clients. That is what we talk

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<v Speaker 3>to other policymakers about. Growth really matters at the end

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<v Speaker 3>of the day for a nation's prosperity. Being able to

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<v Speaker 3>grow GDP, being able to include as many people as

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<v Speaker 3>possible in that growth. But you have to have the

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<v Speaker 3>growth in order to be able to include people. And

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<v Speaker 3>so in Europe they're talking about social programs, they're talking

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<v Speaker 3>about challenges that takes growth in order to be able

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<v Speaker 3>to pay for it. And so as strong economy is

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<v Speaker 3>a really valuable benefit to be able to unlock all

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<v Speaker 3>of those other things. Now, you're right, deficits matter a lot,

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<v Speaker 3>and in the US we're going to have to confront that.

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<v Speaker 3>Other countries have already had to confront those challenges. But

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<v Speaker 3>we have certain advantages in the US, particularly the fact

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<v Speaker 3>that we're a reserve currency that we have the US treasuries,

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<v Speaker 3>is that that sort of risk free reference rate instrument

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<v Speaker 3>of choice. Those are again advantages, can't be taken for granted,

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<v Speaker 3>can't be complacent, but things that have been helpful to

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<v Speaker 3>the United States.

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<v Speaker 1>Robin Well, just to pick up on that point, with

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<v Speaker 1>the election less than two weeks away here in the US,

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<v Speaker 1>are there policy proposals, policy prescriptions that you've heard from

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<v Speaker 1>either of the candidates that you'd think that B and

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<v Speaker 1>Y needs to prepare for now rather than later.

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<v Speaker 3>Well, We're always preparing. It's our job to do that.

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<v Speaker 3>We help our clients prepare. It's our platforms that ultimately

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<v Speaker 3>our clients look to in order to be able to

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<v Speaker 3>move forward. The work that we do in the treasury

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<v Speaker 3>market is a great example. And so to be specific

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<v Speaker 3>for a second, both sides of the aisle have talked

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<v Speaker 3>about wanting to be able to spend more. It is

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<v Speaker 3>likely under both plans that deficits would raise, and so

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<v Speaker 3>with that need to be able to pay for it,

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<v Speaker 3>and so making sure that we're prepared, our platforms are

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<v Speaker 3>prepared to be able to handle more treasuries. We settle

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<v Speaker 3>twenty trillion dollars worth of treasuries earlier this week on

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<v Speaker 3>our platforms, and so that's got to be able to scale.

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<v Speaker 3>We feel comfortable we can. I think in the US

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<v Speaker 3>treasury market in particular, one of the important things is

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<v Speaker 3>going to be the question of where the buyer is

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<v Speaker 3>going to be because there are a lot of governments

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<v Speaker 3>looking to raise funds, the US among them, but not

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<v Speaker 3>the only one, and the private sector wants to fund

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<v Speaker 3>as well. Remember we've got an energy transition, to invest

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<v Speaker 3>in data centers, to pay for infrastructure, to pay for

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<v Speaker 3>the focus on the grid and all of the work

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<v Speaker 3>that's going to be required for that. Those things cost money,

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<v Speaker 3>that's financing and we need buyers for that.

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<v Speaker 1>So then circling back then to your own business and

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<v Speaker 1>the growth, particularly that we saw out of the last

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<v Speaker 1>earning support, I think you're now above fifty trillion dollars

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<v Speaker 1>in assets under custody, assuming that continues to grow. Where

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<v Speaker 1>is that growth coming from, Robin, or at least where

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<v Speaker 1>is the growth that you're targeting.

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<v Speaker 3>Well, the growth in our company ultimately comes from our

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<v Speaker 3>clients and readying our platforms to be able to serve them. Well,

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<v Speaker 3>you mentioned we are the world's largest custodian. We're also

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<v Speaker 3>the world's largest collateral manager and largest issuer services firm.

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<v Speaker 3>That helps to service all of that debt that we

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<v Speaker 3>were just talking about. With the world's largest securities lender,

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<v Speaker 3>we have two trillion dollars worth of asset management firm.

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<v Speaker 3>So all of those platforms and being able to help

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<v Speaker 3>more of those platforms helped more of our clients. That

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<v Speaker 3>for us is the growth path. That's what we've been

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<v Speaker 3>executing this year, and that so far has been able

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<v Speaker 3>to power our growth. But we also think it'll power

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<v Speaker 3>our future.

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<v Speaker 2>How much, Robin, are you looking at past ale acquisitions.

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<v Speaker 3>Well, you've got acquisitions always have to be on the

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<v Speaker 3>radar screen. We actually announced an acquisition about two months

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<v Speaker 3>ago to buy Archer, which is a specific provider of

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<v Speaker 3>managed accounts, which is one of the fastest growing areas

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<v Speaker 3>of the asset management business. We felt that our platforms

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<v Speaker 3>could benefit from that team their technology to be able

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<v Speaker 3>to speed our growth. We're very excited about that. We

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<v Speaker 3>expected to close this quarter and that's an important part

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<v Speaker 3>of the story. And so we're scanning the horizon. That's

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<v Speaker 3>a good example of it, looking for things that will

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<v Speaker 3>speed us on our growth journey and will help us

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<v Speaker 3>to serve our clients even better in areas of the

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<v Speaker 3>market that are growing and may be where the puck's going.

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<v Speaker 2>Robin Vince, thank you so much for being with us.

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<v Speaker 2>Robin Vince, the CEO of V and yat Melon