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Jane Fraser · The David Rubenstein Show

• 0:03
  Speaker 1: A major trailblazer in the financial service system is Jane Fraser.
• 0:07
  Speaker 1: Two years ago, she became the CEO of City and
• 0:09
  Speaker 1: in doing so, became the first woman to had a
• 0:12
  Speaker 1: major money center bank. Today, City and other major banks
• 0:15
  Speaker 1: in the United States are facing challenges to the banking system.
• 0:18
  Speaker 1: I sat down with Jane Fraser recently to talk about
• 0:21
  Speaker 1: these and other challenges. Anything new in the banking world.
• 0:26
  Speaker 1: It's been a quiet week, quiet week, David, So so
• 0:31
  Speaker 1: let's talk about what has been going on. Let's start
• 0:34
  Speaker 1: with the Easy Ones Silicon Valley Bank. What went wrong there? Well,
• 0:40
  Speaker 1: before we dive into that, I've worked in financial markets
• 0:45
  Speaker 1: all around the world, and I have to say we're
• 0:48
  Speaker 1: very lucky in America. This is the best financial system
• 0:51
  Speaker 1: in the world. It is the end factivally okay, but
• 0:57
  Speaker 1: despite it being the best, we have some problems time
• 1:00
  Speaker 1: to time. Yeah, but they're they're isolated problems. So when
• 1:03
  Speaker 1: you when you look at it, the financial systems is
• 1:05
  Speaker 1: broadest deep here as competitive. We've bought some large banks
• 1:09
  Speaker 1: that are well capitalized and a source of strength. At
• 1:12
  Speaker 1: the moment, we have medium sized banks, regional banks, and
• 1:17
  Speaker 1: buy a large they are equally well capitalized, serving their
• 1:21
  Speaker 1: communities play an important part in the banking system. This
• 1:24
  Speaker 1: is quite isolated, okay, but people are still interested in
• 1:29
  Speaker 1: hearing about it. So, so your bank is well capitalized.
• 1:34
  Speaker 1: Your bank, I should have said, as a bank with
• 1:36
  Speaker 1: about two hundred and thirty thousand employers and about an
• 1:39
  Speaker 1: eighty five billion dollar market capitalization. So your bank is
• 1:44
  Speaker 1: in good shape. And your bank is the fourth biggest
• 1:47
  Speaker 1: bank in the United States, that right, JP, Morgan Bank
• 1:49
  Speaker 1: of America, Wells Fargo, and then City. There is a
• 1:52
  Speaker 1: bank on the West coast called Silicon Valley Bank, or
• 1:55
  Speaker 1: there was a bank there not as well capitalized. I
• 1:58
  Speaker 1: mean that the regulator is not under seeing what was
• 2:00
  Speaker 1: going on, or are people in the banking where are
• 2:02
  Speaker 1: people like you? Were you surprised by what happened. So
• 2:04
  Speaker 1: you had a combination of two pieces. You've had the
• 2:07
  Speaker 1: macro and some idiosyncratic and factors around Silicon Valley Bank,
• 2:12
  Speaker 1: but then you also had the impact accelerated by social
• 2:15
  Speaker 1: media of what went down and the rates curve and
• 2:18
  Speaker 1: the increase in rates that's been most we've seen the
• 2:20
  Speaker 1: fastest and the steepest in forty years. So there's a
• 2:23
  Speaker 1: bit of pain that comes from that. Secondly, you did
• 2:28
  Speaker 1: have idiosyncratic factors I think is the polite British way
• 2:31
  Speaker 1: of describing them in Silicon Valley Bank. So as all
• 2:35
  Speaker 1: this played out, you saw some pretty serious holes in
• 2:37
  Speaker 1: their balance sheet management, and they had a very concentrated
• 2:40
  Speaker 1: client base, and that client base ended up burning cash
• 2:44
  Speaker 1: much faster than anticipated, and they ended up wanting to
• 2:50
  Speaker 1: raise capital and it went down pretty quick. In the
• 2:53
  Speaker 1: Greater Session in seven o eight or so, the US
• 2:55
  Speaker 1: government passed TARP legislation, and under the TARP legislation, large
• 3:00
  Speaker 1: amounts of capital were injected into banks, including City and
• 3:04
  Speaker 1: effectively that meant that the shareholders, the creditors, and the
• 3:09
  Speaker 1: depositors were all protected. This time around Silicon Valley Bank,
• 3:13
  Speaker 1: was only the depositors work protected or were decision made
• 3:17
  Speaker 1: by the bide administration others over the weekend. Do you
• 3:19
  Speaker 1: think that was the right decision to protect only the
• 3:22
  Speaker 1: depositors and say goodbye to the shareholders and goodbye to
• 3:24
  Speaker 1: the creditors. I think it's very important to protect the
• 3:28
  Speaker 1: depositors right now. The banking system everywhere around the world
• 3:32
  Speaker 1: depends on confidence, and that confidence has to be in
• 3:36
  Speaker 1: the safety and security of deposits. So in terms of
• 3:39
  Speaker 1: the most important job here they did the most important job,
• 3:43
  Speaker 1: which is making sure the depositors will whole. So in
• 3:46
  Speaker 1: the old days when there were bank runs, used to
• 3:48
  Speaker 1: see people lined up outside the street and get their
• 3:51
  Speaker 1: money out. Now you're just on your iPhone or whatever
• 3:54
  Speaker 1: phone you have, you can take your money out. So
• 3:57
  Speaker 1: money moved so quickly was at a factor as well.
• 3:59
  Speaker 1: And having the money get out of a bank so
• 4:01
  Speaker 1: quickly on the weight and line, you can just do
• 4:03
  Speaker 1: it over there. It is a complete game changer from
• 4:06
  Speaker 1: what we've seen before. David, You're absolutely right. There were
• 4:09
  Speaker 1: a couple of tweets and then this thing went down
• 4:13
  Speaker 1: much faster than has appened in history. And frankly, I
• 4:18
  Speaker 1: think the regulators did a good job in responding very quickly,
• 4:22
  Speaker 1: because normally you have longer to respond to this, so
• 4:25
  Speaker 1: they acted with quite a lot of speak even how
• 4:28
  Speaker 1: quickly this happened. So some people say you have a
• 4:31
  Speaker 1: moral hazard when you protect people. So by protecting all
• 4:35
  Speaker 1: the depositors in Silicon Valley Bank, the implication was that
• 4:39
  Speaker 1: if somebody else has a problem, will protect them and
• 4:41
  Speaker 1: so forth, And so the two hundred and fifty thousand
• 4:44
  Speaker 1: dollars limit is meaningless more or less? Or do you
• 4:46
  Speaker 1: think the federals are and the Secretary of Treasurers saying
• 4:50
  Speaker 1: we're not going to protect every depositor or we're going
• 4:53
  Speaker 1: to protect certain depositors. I don't think they need to
• 4:57
  Speaker 1: go out right now because the banking system is pretty sound,
• 5:00
  Speaker 1: and we're talking about a few banks. We had it
• 5:03
  Speaker 1: from the Chairman pal today. This is not something that
• 5:07
  Speaker 1: is spread across the entire banking system. Isn't like it
• 5:11
  Speaker 1: was last time. This is not a credit crisis. This
• 5:15
  Speaker 1: is a situation where it's a few banks that have
• 5:18
  Speaker 1: some problems and it's better to make sure that we
• 5:21
  Speaker 1: nip that in the bud. Not to pick on the
• 5:23
  Speaker 1: West Coast, but there's another West Coast bank, First Republic Bank,
• 5:27
  Speaker 1: which is around the country but based in San Francisco,
• 5:30
  Speaker 1: and they've had some problems and they've had gigantic declining
• 5:33
  Speaker 1: their market value and so forth. Do you expect that
• 5:36
  Speaker 1: somebody will bail them out or buy them? Well, I'm
• 5:41
  Speaker 1: not going to comment in depth on First Republic because
• 5:43
  Speaker 1: they are actively working through the challenges that they're facing
• 5:47
  Speaker 1: right now. What you saw last week was a number
• 5:52
  Speaker 1: of the large banks eleven of us got together to
• 5:55
  Speaker 1: put a large capital or deposit injection into them to
• 5:59
  Speaker 1: how by the time to make sure that they could
• 6:02
  Speaker 1: come up with the right solution for the restructuring that's needed.
• 6:05
  Speaker 1: So the large banks and others put in roughly thirty
• 6:08
  Speaker 1: billion dollars of the past. So I think you put
• 6:10
  Speaker 1: in roughly five billion or something like that. So how
• 6:13
  Speaker 1: did that happen? It Jamie Diamond call you up and
• 6:15
  Speaker 1: say you have five billion dollars you don't really need
• 6:17
  Speaker 1: and you can put it in. The first republican is
• 6:20
  Speaker 1: that you have to go to your board to say
• 6:21
  Speaker 1: I need to get five billion dollars somewhere. I mean,
• 6:24
  Speaker 1: how or how do you make that decision? And was
• 6:26
  Speaker 1: it you just say that, Jamie, I'll call you back,
• 6:28
  Speaker 1: I'll think about it, or how does that work? So
• 6:34
  Speaker 1: what are the great things about this? Was actually that
• 6:36
  Speaker 1: the banks did all come back together. Because you think
• 6:38
  Speaker 1: of it, we're all pretty We usually try and kill
• 6:41
  Speaker 1: each other in different deals that we're trying to do,
• 6:43
  Speaker 1: so there's a lot of competition between us. But in
• 6:46
  Speaker 1: this instance, this is one where yeah, we're in a
• 6:49
  Speaker 1: strong position. We want to stop what could have been
• 6:52
  Speaker 1: a problem. And we all know when there is a
• 6:55
  Speaker 1: confidence crisis, the logic that takes over, isn't it necessary?
• 7:00
  Speaker 1: Really rational? So we wanted to go and help protect
• 7:03
  Speaker 1: the system. It's in the interests to do so. So
• 7:05
  Speaker 1: despite this being quite a divisive environment that we're all
• 7:08
  Speaker 1: operating in, this is an instance of the bank's coming
• 7:11
  Speaker 1: together and saying, okay, what can we do here to
• 7:14
  Speaker 1: support a system that we have confidence in? And you
• 7:16
  Speaker 1: don't put five billion dollars into the system through the
• 7:21
  Speaker 1: generosity of your own heart. You do it because you
• 7:23
  Speaker 1: have confidence in the system itself. You expect to get
• 7:27
  Speaker 1: their money back eventually. Yes, okay, So Jamie Diamond is
• 7:30
  Speaker 1: a great banker. I think he's been the head of
• 7:32
  Speaker 1: Japan Worker for seventeen years something like that. Jamie Diamond
• 7:37
  Speaker 1: well regarded. But why do you think it is the
• 7:42
  Speaker 1: case that he's calling around and doing this and not
• 7:45
  Speaker 1: the Secretary Treasury, the Chairman of the Federal Reserved, the
• 7:47
  Speaker 1: head of the FDIC. Why is it a non government
• 7:49
  Speaker 1: person is doing this. I want to thought a government
• 7:51
  Speaker 1: person would do this. David, Why do you think that
• 7:53
  Speaker 1: Janet wasn't calling around doing it? Do you believe everything
• 7:56
  Speaker 1: you read in the newspapers? Tis because when people and
• 7:59
  Speaker 1: who do something good, they usually have the press know
• 8:02
  Speaker 1: about it. So but maybe she was going round. I'm
• 8:05
  Speaker 1: sure she was. But Jamie seems to be getting all
• 8:07
  Speaker 1: the credit if credit is the right word, or is
• 8:09
  Speaker 1: that not fair to give him the credit? Oh? I
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  Speaker 1: Jamie played a role. I think we all played a role,
• 8:14
  Speaker 1: and so did There was a very active discussion over
• 8:17
  Speaker 1: that weekend. Which city consider buying First Republic or you're
• 8:20
  Speaker 1: not interested in No, you're not buying? Okay, another bank,
• 8:26
  Speaker 1: but Credit Swiss. Credit Swiss seemed to dissolve very very quickly.
• 8:31
  Speaker 1: Were you surprised at how quickly that bank kind of
• 8:34
  Speaker 1: went away? After about one hundred years of being around.
• 8:36
  Speaker 1: So the nice thing, we're about three or four banks
• 8:38
  Speaker 1: out of the thousands that are here in the States
• 8:41
  Speaker 1: and the rest of it. So let's put that in perspective.
• 8:44
  Speaker 1: So Credit Suis. I don't think anyone was falling off
• 8:46
  Speaker 1: their chair. The Credit Suis ultimately ended up where it did.
• 8:50
  Speaker 1: It was really a question of time. It's been a
• 8:52
  Speaker 1: troubled institution for a long time. Those of you who
• 8:55
  Speaker 1: don't know it, it's a very global bank in Swiss.
• 8:59
  Speaker 1: It's got a very strong operation in Switzerland, good wealth
• 9:02
  Speaker 1: management in Asia, investment bank here in the States and
• 9:06
  Speaker 1: around the world. But it's had a lot of issues.
• 9:10
  Speaker 1: It's had a lot of management instability, It's had a
• 9:12
  Speaker 1: number of different crises and things that have hit it. Well.
• 9:16
  Speaker 1: Credit Swiss has some great private bankers and they have
• 9:19
  Speaker 1: some great clients. Are the city bankers calling up at
• 9:22
  Speaker 1: Credit Swiss former employees and saying you should come here
• 9:25
  Speaker 1: now or something like that, I think they're calling us
• 9:27
  Speaker 1: they are, okay, all right, okay, growing up? What did
• 9:30
  Speaker 1: you say wanted to be the CEO of city when
• 9:32
  Speaker 1: you're growing up? What did you think? I want to
• 9:34
  Speaker 1: be a doctor when I grew up? But I was
• 9:36
  Speaker 1: really lousy at biology, So that kind of news that one.
• 9:40
  Speaker 1: There's a lot of people who want to go to
• 9:42
  Speaker 1: medical school. So okay, you grew up in Edinburgh area, yep?
• 9:46
  Speaker 1: I did? And were your parents bankers? No, definitely not so.
• 9:50
  Speaker 1: My father was a Scottish accountant, which meant you you're
• 9:54
  Speaker 1: not really relying on parental generosity and extra pocket money
• 9:59
  Speaker 1: from a scot Tish accountant as a father. So I
• 10:03
  Speaker 1: used to earn my pocket money on the golf course
• 10:05
  Speaker 1: at Saint Andrew's counting. You would not know it from
• 10:07
  Speaker 1: my golf game, but I'm truth's better than mine. So
• 10:10
  Speaker 1: you went to Cambridge after you graduated? What did you
• 10:13
  Speaker 1: do after I graduate? I joined Golbyn as an analyst.
• 10:18
  Speaker 1: That's an easy job to get, an easy job when
• 10:20
  Speaker 1: you haven't you don't work more than thirty forty hours
• 10:23
  Speaker 1: a week. Yes, yeah, yes, So how many years did
• 10:25
  Speaker 1: you do that? So? I worked to Goldman for a
• 10:27
  Speaker 1: couple of years and I was I was young when
• 10:30
  Speaker 1: I started, and everyone was I was the boring girl
• 10:32
  Speaker 1: from Scotland. Everyone else was European, spoke multiple languages and
• 10:38
  Speaker 1: was a lot more exotic and interesting than me. So
• 10:40
  Speaker 1: after I finished the Annist program, I thought I'd better
• 10:43
  Speaker 1: make myself a bit more interesting. So I moved to
• 10:45
  Speaker 1: Spain and speak Spanish before I didn't. So now you
• 10:49
  Speaker 1: speak Spanish perfect amenty, Well, I know one word, maybe
• 10:57
  Speaker 1: see or something like that. I don't ever, but I
• 11:02
  Speaker 1: you know, my language skills are very limited, so so
• 11:05
  Speaker 1: luckily you have other talents though, which But so you
• 11:11
  Speaker 1: do there for a couple of years and then you
• 11:12
  Speaker 1: decide to go where America? All right? And where did
• 11:15
  Speaker 1: you want to go in America? I did the same again,
• 11:19
  Speaker 1: taught my way into Harvard Business School, and I was
• 11:22
  Speaker 1: fascinated by the American machine. And if you've spend a
• 11:25
  Speaker 1: bit of time in Europe and growing up in the
• 11:28
  Speaker 1: you know, the eighties, seventies and eighties, it's fascinating to
• 11:31
  Speaker 1: America is just something you want to try and understand
• 11:35
  Speaker 1: in the American economy and the American entrepreneurs not someone
• 11:38
  Speaker 1: you ever wanted to bet again. So when you went
• 11:40
  Speaker 1: to Harvard Business School, you entered in ninety two something
• 11:43
  Speaker 1: like that? That's right? Did you entered ninety two? Were
• 11:45
  Speaker 1: there are a lot of women in your class, probably
• 11:48
  Speaker 1: about twenty four twenty five percent something like that, Yes,
• 11:51
  Speaker 1: and enough of us to cause trouble? All right? You
• 11:54
  Speaker 1: graduate from Harvard Business School and then you decide to
• 11:56
  Speaker 1: go to McKenzie, Yes, I did. And why did you
• 12:00
  Speaker 1: want to be a consultant? Well, first of all was
• 12:04
  Speaker 1: why didn't Why didn't I go back into banking at
• 12:06
  Speaker 1: that time? And I've been in banking in the eighties
• 12:08
  Speaker 1: where there weren't many women in banking, unlike the business school,
• 12:13
  Speaker 1: they wore suits with very big shoulder pads, and they
• 12:17
  Speaker 1: were more scary than the men um You remember that,
• 12:21
  Speaker 1: you remember the era. And so when I looked at
• 12:24
  Speaker 1: the consulting, particularly McKinsey, I like partnerships. I think partnerships
• 12:30
  Speaker 1: are great places to grow up. The apprenticeship models wonderful
• 12:33
  Speaker 1: global institution and firm, and also it was quite strategic
• 12:39
  Speaker 1: in what they were looking at. It was similar issues
• 12:41
  Speaker 1: to M and A at GOUM. But I thought I
• 12:44
  Speaker 1: would have a chance of having a family a bit
• 12:47
  Speaker 1: more predictability met in the work schedule. So you did
• 12:50
  Speaker 1: it for ten years, roughly ten years, and you had
• 12:53
  Speaker 1: two children during that time. So you you go to McKinsey,
• 12:56
  Speaker 1: you work your way up, you become a partner there
• 12:59
  Speaker 1: and you being a partner mckinsi's a great job. Why
• 13:01
  Speaker 1: did you decide to leave to go to city. Yeah.
• 13:05
  Speaker 1: I became a mum at the same time as I
• 13:08
  Speaker 1: became a partner, and I worked part time all the
• 13:12
  Speaker 1: way through my partnership years. And McKinsey was fantastic about
• 13:18
  Speaker 1: that because I was able to spend time with the
• 13:21
  Speaker 1: kids before they went into school, but then when they
• 13:24
  Speaker 1: got when they were then at school that I felt like, Okay,
• 13:27
  Speaker 1: I can go back full time working again, and I
• 13:32
  Speaker 1: you know, I honestly I felt like it was time
• 13:34
  Speaker 1: that I could prove that I would I could do it,
• 13:37
  Speaker 1: rather than just advice. All right, she went to city
• 13:39
  Speaker 1: at the time. Did you think a woman could become
• 13:42
  Speaker 1: or would ever become the head of city? I honestly
• 13:44
  Speaker 1: never thought about it. It mean, at that point, it's
• 13:48
  Speaker 1: a firm that there were quite a few women around
• 13:51
  Speaker 1: in I'd been in an environment was always very supportive
• 13:53
  Speaker 1: around it and fantastic mele mentors and others, and it
• 13:56
  Speaker 1: wasn't It was just never something I thought about. This
• 13:59
  Speaker 1: was twenty years ago, so I was just enjoying the
• 14:02
  Speaker 1: day job. So you had a series of jobs everyone
• 14:05
  Speaker 1: you were the CEO of this division or that division
• 14:07
  Speaker 1: and so forth. And one time they asked you to
• 14:08
  Speaker 1: move to Latin America to be the CEO of Latin America.
• 14:11
  Speaker 1: Did you think that was a dead end, You're going
• 14:13
  Speaker 1: to move to Latin America get out of the way
• 14:14
  Speaker 1: of the succession, or did you think that was a
• 14:16
  Speaker 1: way to get promoted. It was a big turnaround role.
• 14:20
  Speaker 1: And it's one of those ones you say if I
• 14:22
  Speaker 1: did a good job, then that was going to put
• 14:25
  Speaker 1: me in good position for bigger, bigger opportunities head And
• 14:28
  Speaker 1: if I did a bad job, then you know, so
• 14:31
  Speaker 1: be it. You wouldn't you weren't afraid they would forget you.
• 14:33
  Speaker 1: You're down in Brazil or something, and you weren't afraid
• 14:36
  Speaker 1: they would forget you and everything like that. Okay, so
• 14:39
  Speaker 1: you did a good job, you come back and you're
• 14:41
  Speaker 1: the head of the Global Consumer Bank. What is that
• 14:43
  Speaker 1: Global Consumer Bank in City? So that that's retail banking.
• 14:48
  Speaker 1: That's a credit card, which I believe you are a
• 14:50
  Speaker 1: proud owner of a City credit card. David, I am
• 14:53
  Speaker 1: I have that in here. I can't. I'm getting I
• 14:57
  Speaker 1: don't have enough frequent Flyer miles on it, though I'm
• 14:59
  Speaker 1: trying to. You told me I'm not qualified for my
• 15:01
  Speaker 1: frequent fire miles. But yeah, you've got the wrong card.
• 15:04
  Speaker 1: Is it a it? Is this the best credit card
• 15:07
  Speaker 1: you can get? So, David, you have the one with
• 15:12
  Speaker 1: our wonderful partner of American Airlines and they yours is black.
• 15:18
  Speaker 1: I can mind which is better. You've got to ask
• 15:21
  Speaker 1: for it, David. Okay, all right, Well, although I suspect
• 15:25
  Speaker 1: you may not be flying quite as much on the
• 15:27
  Speaker 1: commercial airlines. Currently, many CEOs are under pressure to take
• 15:33
  Speaker 1: positions on public policy matters, So positions are on voting
• 15:38
  Speaker 1: rights or or um climate change. So where do you
• 15:42
  Speaker 1: think CEO should be getting in the middle of talking
• 15:45
  Speaker 1: about those kind of things or do you try to
• 15:47
  Speaker 1: not do that when they matter to your business model? Um,
• 15:52
  Speaker 1: and when they're important for progress. UM. If you're a bank,
• 15:55
  Speaker 1: you care a little about economic growth and progress around
• 15:58
  Speaker 1: the world, So yes, we will speak out on that. Also,
• 16:01
  Speaker 1: if it's very important to our people the communities that
• 16:04
  Speaker 1: we're in, it will be topics we'll talk about. We
• 16:06
  Speaker 1: don't view that as being political, but it's about what
• 16:11
  Speaker 1: do we stand for as a bank? Now, what about diversity,
• 16:14
  Speaker 1: equity and inclusion. What are you doing to make sure
• 16:17
  Speaker 1: you have other diversity standards met in the bank? It's
• 16:20
  Speaker 1: it's a really important part of the bank because I
• 16:22
  Speaker 1: think because we've got people from everywhere who work at
• 16:27
  Speaker 1: City and they want to work for an American enterprise.
• 16:31
  Speaker 1: It's a real compelling point of the bank in attracting
• 16:36
  Speaker 1: talent from all over the world for City. My predecessor
• 16:41
  Speaker 1: really was very focused on making sure that we had
• 16:44
  Speaker 1: strong diversity of all types in the bank, and we
• 16:47
  Speaker 1: worked out that radical transparency is very, very valuable. So
• 16:52
  Speaker 1: we put out three year targets on representation and we
• 16:58
  Speaker 1: disclose those every close exactly what they are. The targets
• 17:02
  Speaker 1: we have on both recruiting and in retention and in
• 17:06
  Speaker 1: promoting or in everybody's schoolcard. And we also have pay equity,
• 17:10
  Speaker 1: so every single year we measure you have a third
• 17:13
  Speaker 1: party come in and make sure that every woman is
• 17:17
  Speaker 1: paid exactly the same as a man in the same
• 17:20
  Speaker 1: job performing at the same level. When did you realize
• 17:23
  Speaker 1: for the first time I could be or you could
• 17:26
  Speaker 1: be the CEO of the bank. I mean, you know,
• 17:28
  Speaker 1: there are a lot of people. You have two hundred
• 17:30
  Speaker 1: and thirty thousand employees, a lot of them want to
• 17:32
  Speaker 1: be When did you realize for the first time you
• 17:34
  Speaker 1: had a chance to get that when I was made
• 17:38
  Speaker 1: president of the bank. Because up until then you just
• 17:41
  Speaker 1: you don't really have a sense. But that was a
• 17:44
  Speaker 1: point when Mike and John had a conversation about being
• 17:49
  Speaker 1: a likely successor, but no guarantees in life, and I'd
• 17:52
  Speaker 1: better do a good job. Okay. So your predecessor was
• 17:56
  Speaker 1: Michael Corbett. Yeah, he retired about two years ago. Succeeded him.
• 18:01
  Speaker 1: What was the biggest challenge you had in becoming the
• 18:03
  Speaker 1: CEO right away? It was COVID, So this was becoming
• 18:09
  Speaker 1: CEO during COVID is not the easiest because you know,
• 18:12
  Speaker 1: one's used to going around going to different sites, seeing
• 18:15
  Speaker 1: our people, seeing our clients in person. And while Zoom
• 18:19
  Speaker 1: did an amazing job, it is not the same and
• 18:22
  Speaker 1: so I know you have to learn how to lead
• 18:24
  Speaker 1: in a different way. Today. City is a bank that
• 18:28
  Speaker 1: is announced it's changing its strategy and you now want
• 18:31
  Speaker 1: to be a consumer and institutional business bank in the
• 18:36
  Speaker 1: United States? Is that right? Yeah, and you're getting out
• 18:39
  Speaker 1: of the consumer business outside of the United States. So
• 18:42
  Speaker 1: what we've said we are rather than what we're not,
• 18:45
  Speaker 1: is that it's a pretty extraordinary bank in its history
• 18:50
  Speaker 1: and its presence globally. It's uniquely operate opens the door
• 18:55
  Speaker 1: as a bank in a hundred different countries. So the
• 18:58
  Speaker 1: City is to be the pre eminent banking partner for
• 19:02
  Speaker 1: companies and for investors and for individuals across border needs.
• 19:07
  Speaker 1: And that's the vision of the bank. That's the will
• 19:09
  Speaker 1: serve that client base as their absolutely critical partner. Hey see,
• 19:15
  Speaker 1: you've sold a number of your international consumer businesses and
• 19:17
  Speaker 1: you've an Now you're trying to sell your business in Mexico,
• 19:22
  Speaker 1: the consumer business business. Who are you going to sell
• 19:25
  Speaker 1: that too? Oh, we've been We've been fortunate to have
• 19:29
  Speaker 1: a lot of interest there. Look, we looked at we
• 19:31
  Speaker 1: looked at a consumer banking and we could see that. Originally,
• 19:36
  Speaker 1: the view had been that you would get a lot
• 19:38
  Speaker 1: of global scale and consumer banking, and we were very
• 19:41
  Speaker 1: strong in a number of different geographies. But the reality
• 19:45
  Speaker 1: is you don't get as much scale globally. It's much
• 19:48
  Speaker 1: more about local scale and those businesses. So we decided,
• 19:51
  Speaker 1: let's focus. We want the bank to be simple. We
• 19:53
  Speaker 1: want to be truly excellent or what we do. And
• 19:56
  Speaker 1: that's better if you're a more focused bank around for
• 19:59
  Speaker 1: your business life. So that's right, that's the path we're on.
• 20:02
  Speaker 1: So the bank stock under your predecessors and to some
• 20:06
  Speaker 1: eccenter you hasn't really moved in ten years. Is that
• 20:08
  Speaker 1: a concern. Well, we're transforming the bank to make sure
• 20:12
  Speaker 1: that we're in a very different position. So we're changing
• 20:16
  Speaker 1: the strategy of the bank because we talked about and
• 20:18
  Speaker 1: that entails selling sixty five thousand employees. It's twenty five
• 20:22
  Speaker 1: percent of our employee base, so we can really focus
• 20:25
  Speaker 1: and double down on the businesses that makes sense. Two
• 20:29
  Speaker 1: thirty thousand you have, you're selling sixty five thousand. Yes,
• 20:32
  Speaker 1: While yes, it's a lot, and I think it's under
• 20:35
  Speaker 1: the belief that what where we truly excel. We will
• 20:39
  Speaker 1: move every single day four trillion dollars of volume for
• 20:45
  Speaker 1: five thousand multinational firms and there's no other bank in
• 20:49
  Speaker 1: the world that can do that. That's an incredible asset
• 20:52
  Speaker 1: for America. It's a strategic asset for the States because
• 20:56
  Speaker 1: you'd much rather have American companies operating on an America
• 21:00
  Speaker 1: and banking rails and not foreign banking rails, particularly these days.
• 21:04
  Speaker 1: So that's what we're focusing the bank around, is that
• 21:07
  Speaker 1: client base. And it's a big transformation. David right, This
• 21:10
  Speaker 1: is bold. This takes some courage to do. We're making
• 21:14
  Speaker 1: really good progress on it, and we're putting a lot
• 21:17
  Speaker 1: of investment into modernizing the bank because we've had some
• 21:21
  Speaker 1: regulatory orders against us as well, to make sure that
• 21:24
  Speaker 1: we make the investments we need to and making sure
• 21:27
  Speaker 1: the culture is there of real excellence. But also to
• 21:32
  Speaker 1: be a human bank. We've talked about that being important
• 21:35
  Speaker 1: or put all of that together. That's a lot of transformations,
• 21:38
  Speaker 1: a lot of work, but we're really we're determined around it,
• 21:41
  Speaker 1: and we're completely convinced that that puts the bank into
• 21:45
  Speaker 1: a different profitability, different return profile and ultimately the benefit
• 21:50
  Speaker 1: of our shareholders. Suppose I'm listening to what you say,
• 21:52
  Speaker 1: and I say, she's obviously urtic killer, she's committed. Maybe
• 21:56
  Speaker 1: I'll myyer stock. You think your stocks are goodbye? Right now? Yes,
• 22:01
  Speaker 1: very my buy it. I can get an appreciation of
• 22:04
  Speaker 1: some percent I can be happy with you think not
• 22:07
  Speaker 1: as good as private equity returns, but good Right for
• 22:11
  Speaker 1: young professionals, why should they want to work in a
• 22:14
  Speaker 1: large commercial bank. What's the appeal of it? Why if
• 22:17
  Speaker 1: somebody gets goes to Harvard Business School, why not go
• 22:19
  Speaker 1: to a private equity firm, a hedge firm, one of
• 22:22
  Speaker 1: these important organizations. And what's the how do you recruit
• 22:28
  Speaker 1: people into place like city? What is it that you
• 22:30
  Speaker 1: say is so great about being a commercial banker. America's
• 22:33
  Speaker 1: global banks are right in the center of some of
• 22:36
  Speaker 1: the biggest challenges that are going on in the world. Geopolitically,
• 22:39
  Speaker 1: we get pulled into the conversations we're supporting, we're playing
• 22:43
  Speaker 1: a critical role in supporting clients and countries, and you
• 22:48
  Speaker 1: get an opportunity to come and work and learn in
• 22:51
  Speaker 1: a team environment, in an apprenticeship model on how to
• 22:55
  Speaker 1: tackle and solve some of these pieces. What do you
• 22:57
  Speaker 1: do for relaxation and to get away from the office
• 23:02
  Speaker 1: from time to time? You are a golf or or something. Yeah, look,
• 23:06
  Speaker 1: I love spending time with my kids, so um, you know,
• 23:10
  Speaker 1: being able a chance to spend some time with them.
• 23:12
  Speaker 1: They're less enthusiastic now than they used to be, and
• 23:14
  Speaker 1: they're little about that. But I'll take what I get.
• 23:17
  Speaker 1: Did they tell him? They tell their friends who you are.
• 23:20
  Speaker 1: They don't want to tell. So when I was announced
• 23:23
  Speaker 1: the CEO, I knew it was going to happen. I
• 23:25
  Speaker 1: called up my duke son and I zip didn't pick
• 23:30
  Speaker 1: up as usual, and I said, please call me um,
• 23:33
  Speaker 1: and I get it. He didn't pick up. No, No,
• 23:36
  Speaker 1: I didn't pick up. He send a mess about I'm busy.
• 23:39
  Speaker 1: I said, didn't know. Please, I've got some news. Could
• 23:41
  Speaker 1: you could you pick up? And he's like, Mum, I
• 23:44
  Speaker 1: mean I'm on zoom calls, I'm you know, I'm really busy,
• 23:48
  Speaker 1: and he did not pick up. Did not pick you up.
• 23:50
  Speaker 1: I ended up having to text him the next morning,
• 23:53
  Speaker 1: but it was going to be announced. And then he
• 23:56
  Speaker 1: came back to me at the end of the day
• 23:58
  Speaker 1: and said, Mum, you were It was a text message,
• 24:01
  Speaker 1: it wasn't a call. I said, Mummy, you know you're
• 24:03
  Speaker 1: all lived the news today. Are you important or something?
• 24:06
  Speaker 1: Dot dot dot dot dot. Thanks for listening to hear
• 24:12
  Speaker 1: more of my interviews. You can subscribe and download my
• 24:14
  Speaker 1: podcast on Spotify, Apple, or wherever you listen.