Jane Fraser, Chief Executive Officer of Citi

foreign [Music] we're very privileged today to have Jane Fraser the CEO of city with us and we're going to have a conversation about what's going on in the financial World among other things and uh but just to introduce her very briefly we'll talk about her bio during the discussion she is from Scotland Edinburgh did her undergraduate degree and got her Master's at Cambridge later went to Harvard Business School she started her career I guess you could say at Goldman Sachs indeed and then later went to Spain for a few years then went to Harvard Business School and then joined McKinsey where she became a partner and then after doing that for a while she joined City and she had successive positions there as the CEO of its private bank the CEO of its Latin American Business the CEO of its consumer and Commercial Mortgage business and she also had the position of being the CEO of its Global consumer bank and later two years ago this month became the CEO the first woman to be the head of a major Commercial Bank in the United States anything new in the banking world so let's talk about what has been going on let's start with the easy ones Silicon Valley Bank what went wrong there well before we dive into that um I've worked in Fernando and around the world and I have to say we're very lucky in America this is the best financial system in the world it is the Envy of the world okay but despite it being the best we have some problems from time to time no but they're they're isolated problems so when you when you look at it the financial systems it's broad it's deep here it's competitive we've got some large banks that are well capitalized um and a source of strength at the moment we have medium-sized Banks Regional Banks and by and large they are equally well capitalized serving their communities play an important part in the banking system this is quite isolated okay but people are still interested in hearing about it so um so your bank is well capitalized your bank I should have said as a bank with about 230 000 employees and about an 85 billion dollar market capitalization so uh your bank is in good shape and your your bank is the fourth biggest bank in the United States is that right JP Morgan Bank of America Wells Fargo and then City there is a bank on the west coast called Silicon Valley Bank or there was a bank there not as well capitalized yes I mean did The Regulators not understand what was going on or the people in the banking world people like you were you surprised by what happened uh you so you had a combination of two pieces you've had the macro and some idiosyncratic and factors around Silicon Valley Bank but then you also had the impact accelerated by social media of what went down so we've had the we knew that when we got wind off lower for longer rates it was going to be pretty painful and the rates curve and the increase in rates has been most we've seen the fastest and the steepest in 40 years so there's a bit of pain that comes from that secondly you did have idiosyncratic factors I think is the polite British way of describing them in Silicon Valley Bank so as all this played out you saw some pretty serious holes in their balance sheet management and they had a very concentrated client base and that client base ended up burning cash much faster than anticipated and they they ended up wanting to raise capital and it went down pretty quick well do you think the Federal Reserve recognized that some banks would be really hurt by higher interest rates in a way that Silicon Valley was hurt or you think the Fed was more focused on fighting inflation and didn't worry about the impact on the banks I think the fed's job number one is fighting inflation and we want the FED to be very dependable in fighting inflation and that should be that should be their most important priority there are ramifications of it but there are certain Banks which say are an isolated few that have really been impacted very negatively that didn't necessarily manage their balance sheets that well in retrospect right in the Great Recession in 0708 or so the U.S government passed harp legislation and under the tarp legislation large amounts of capital were injected into Banks including City indeed um some banks said they didn't need it but everybody took it who was offered it or forced to take it and effectively that meant that the shareholders the creditors and the depositors were all protected this time around Silicon Valley Bank was only the depositors were protected over decision made by the by the administration others over the weekend do you think that was the right decision to protect only the depositors and say goodbye to the shareholders and goodbye to the creditors I think it's it's very important to protect the depositors right now the banking system I'm everywhere around the world depends on confidence and that confidence has to be in the Safety and Security of deposits so in terms of the the most important job here they did the most important job which is making sure the depositors were whole so in the old days uh when there were Bank runs you used to see people lined up outside the street and get their money out now you're just on your iPhone or whatever phone you have you can take your money out so money moves so quickly was out of factor as well and having the money get out of a bank so quickly on the wait in line you can just do it over there it's a complete Game Changer from what we've seen before David you're absolutely right there were a couple of tweets and then there's things this thing went down much faster than has happened in history and frankly I think The Regulators did a good job in responding very quickly because normally you have longer to respond to this so they they acted with quite a lot of speed given how quickly this happened so some people say you have a moral hazard when you when you protect people so by protecting all the depositors in Silicon Valley Bank the implication was that if somebody else has a problem will protect them and so forth and so the 250 000 limit is meaningless more or less or do you think the Federal Reserve and the Secretary of Treasurer is saying we're not going to protect every depositor or we're going to protect certain depositors uh I don't think they need to go out right now because the banking system is pretty sound and and we're talking about a few Banks we had it from the chairman pal today um this is not something that is spread across the entire banking system this isn't like it was last time this is not a credit crisis um this is a situation where it's a few banks that have some problems and it's better to make sure that we nip that in the bud okay so what about the uh the problem that uh over the weekend when this was being debated within the administration people didn't know if they were going to protect depositors shareholders creditors they decided to protect depositors but they obviously were trying to get some Bank to buy Silicon Valley Bank why do you think nobody emerged to willingness willing to buy it um only it takes you a few days to get your arms around these historically if there was a bank that had problems you had at least a week where people were looking at it because of what you said before in terms of the digital side this happened very quickly um so we'll wait and see if something if we do see a buyer in the next few days emerge we hope so not to pick on the west coast but there's another West Coast Bank First Republic Bank which is around the country but based in San Francisco and they've had some problems and they've had gigantic decline in their market value and so forth do you expect that somebody will bail them out or buy them well I'm comment in depth on phones they are active active what you saw last week was a number of the large Banks 11 of us got together to put a large Capital our deposit injection into them to help buy the time to make sure that they could come up with a the right solution for the restructuring that's needed so the large Banks and others put in roughly 30 billion dollars of deposits I think you put in roughly 5 billion or something like that so um how did that happen is Jamie Diamond call you up and say Hey you have five billion dollars you don't really need and you can put it in the first Republican is that you have to go to your board to say I need to get five billion dollars somewhere I mean how how do you make that decision and was it did you say to Jamie I'll call you back I'll think about it or how to how does that work so um you one of the great things about this was actually that the banks did all come back together because you think of it we're all pretty we usually try and kill each other and different deals that we're trying to do I mean it's you're you don't you don't want to have um someone else win a pitch over yourselves so there's a lot of competition between us but in this instance this is one where yeah we're in a strong position we want to stop what could have been a problem and we all know when there is a confidence crisis the logic that takes over isn't it necessarily rational so we wanted to go and help protect the system it's in the interest to do so so despite this being quite a divisive environment that we're all operating in this is an instance of the banks coming together and saying okay what can we do here to support A system that we have confidence in and you don't put five billion dollars into the system um through the generosity of your own heart you do it because you have confidence in the system itself um you expect to get that money back eventually yes okay so Jamie Diamond is a great Banker I think he's been the head of uh JPMorgan for 17 years something like that Jamie Diamond well regarded but um why do you think it is the case that he's calling around and doing this and not the Secretary of Treasury the chairman of the Federal Reserve the head of the FDIC why is it a non-government person is doing this I would have thought a government person would do this David why do you think that Janet wasn't calling around doing it he believes everything you read in the newspapers because when people in Washington do something good they usually have the Press know about it so uh but maybe she was calling around I'm sure she was but Jamie seems to be getting all the credit if credit is the right word or is that not fair to give him the credit oh I Jamie played a role I think we all played a role and so did it was a very active discussion over that weekend and over the week with a number of members there's a lot of Engagement there's I think people should take confidence in this there's really good engagement there's brainstorming and there's a good intent here of how do we come together and try and give some support into something that we believe in it's a good thing with City consider buying First Republic or you're not interested no no you're not buying okay um another bank uh called credit Swiss Yes Credit Suisse seems to dissolve very very quickly uh were you surprised at how quickly that bank kind of went away after about a hundred years of being around so the nice thing is we're talking about three or four Banks out of the thousands that are here in the states and the rest of it so let's put that in perspective so Credit Suisse I don't think anyone was falling off their chair the Credit Suisse um ultimately ended up where it did it was really a question of time it's been a troubled Institution for a long time those of you who don't know it it's a very global bank in Switz it's got a very strong operation Switzerland good Wealth Management in Asia an investment bank here in the states and around the world but it's had a lot of issues um it's had a lot of management instability it's had a number of different um crises and things that have hit it so no one was hugely surprised that this happened it was really a question of time in everyone's mind one issue that seems very unusual there is that when credit Swiss was taken over by UBS they in effect protected to some extent the shareholders they didn't wipe out the shareholders of Credit Suisse they got two billion dollars or something like that two billion euros perhaps or Swiss Francs in compensation smaller than the value had been before but the bondholders who issue who held a certain kind of bond they were wiped out normally bondholders get protected before the shareholders why did that happen it's an anomaly in Switzerland and we were very happy to see the Europeans come out very quickly and say in the UK as well saying that's not how they that's not how the system works under it so it was it was truly just a Swiss piece and I think all of us were quite relieved when that clarification came came out as it obviously took people by surprise okay but let's also look at this this was a very orderly process you know this is a major global bank with operations everywhere and here again that this was done extremely well over a few days um because we were quite worried about what would happen on Monday morning was it going to be complete chaos and there wasn't well credit Swiss has some great private bankers and they have some great clients uh are the city Bankers calling up the credit Swiss former employees and saying you should come here now or something like that no I think they're calling us they are okay okay all right so um as we talked today uh the Federal Reserve has announced that it's going to increase uh the federal discount rate by another 25 basis points which was probably not a surprise to the market uh do you think that was the right decision though look it I think it was a tough decision was Jay going to pause was he going to increase it by the 25 bips or more and I think what he said was frankly Jolly sensible if you're pardon the British expression um I do that occasionally um he he said we don't know how much credit tightening is going to come from what's gone on in the last couple of weeks we don't quite know what's going to happen there so but we do know that inflation is a real problem it's persistent it's starting to come off but he has to tackle this and in in Jade the markets trust and many of us do because you know he has been so clear about slaying the inflation Dragon but he's going to wait and see what the data shows as to what the impact of the next you know the last couple of weeks have been that that feels like a very sensible response he also you know let's tackle this and make sure everyone's quite clear that they're going to tackle inflation hard but let's also see what they data is and and adjust accordingly well he has said consistently I want to get inflation back to two percent where it roughly was for 25 years yeah but some people say two percent is kind of low it will produce uh unemployment up to six percent and maybe guarantee a recession do you think two percent is too low what about three percent as inflation go if we look longer as we look out longer term in the world there's a number of different that we've got to tackle if we're going to look at um moving to Greenery A Greener economy that's more inflationary if we're going to be looking at building in much more resilience into Supply chains you know that at some costs to the systems so you know two percent is going to be quite hard when we think in the longer run about some of these trends that need to be taken to count it's not impossible but it's um it could be difficult um did Jay power ever call you up for your advice does he call you or you call him or you talk to him lately or to Janet Yellen do they call you and you're the money running one of the biggest banks yes they do call and what do they say you know they will ask for opinions on things so I think it's it's great to see that we've got people that aren't just telling you what to do or just they're soliciting advice trying to understand what's happening in the economy what are we seeing what are we learning because we're a big global bank we've got operations everywhere we have a lot of information on it so they'll be testing out what they see going on they'll be asking for advice they won't necessarily take it but I'm used to that I'm a mother of teenagers if you're in a board meeting or something like that um does your assistant tell you uh that there's a call from the secretary uh treasury or chairman of the federal reserver they put that right through or do you say I'll get back to them when I'm oh I I like women sitting in front in a test that I've so um do you see any evidence in the information data that city has that we are heading for a recession a mild recession or some type of recession if so when might you think we would see the evidence of that yeah I mean we've certainly been expecting that a recession could well be could well be happening in the second half of the year if one does occur um we don't think it'll be that heavy and that harder recession because normally when you're heading into some tougher times you know the consumers not in such good health the the companies aren't the banks aren't whereas that's not the case right now the consumer is in good health um the corporate balance sheets are strong people took advantage of a low rate environment to make sure their balance sheets are in good shape and the banks are strong so the fact is that typically amplify a recession and not in the K and not in play at the moment so um you know we have to make sure there's nothing crazy it happens in the geopolitical world that would change it but we could well have a mild recession the last couple of weeks could make that a bit more likely we're doing price stability and financial stability but it's doesn't feel like it's going to be a tough one and the US economy is likely to pull out of it pretty quickly as we talked today are you worried about any other bank without mentioning one uh that might have a financial problem or you think that there's another shooter drop or you think we're basically patch this problem up by now look I think there's probably going to be a few there could well be some smaller institutions um that have similar issues in terms of they're being caught without managing the balance sheets as ably as others have done and it's quite likely there may be a few of them um we we um we certainly hope there'll be fewer rather than more but again it should be manageable within the existing toolkit that's there okay let's talk about your background for a moment so you grew up in Edinburgh area yep I did and were your parents Bankers no definitely not so my father was a Scottish accountant which meant you you you're not really relying on Parental General and extra pocket money from a Scottish accountant as a father so I used to earn my pocket money on the golf courses and Andrews carrying you would not know it from my golf game but so uh so you were a good golfer or you were a caddy or I was a cat you wouldn't think I was a golfer if you saw my golf game now but I used enjoy a lot well I'm sure it's better than mine but so you grew up you're an only child yep so um I'm an only child too so there's an advantage of that special David um there's questions and minuses but uh all right so you're growing up what did you say you wanted to be the CEO of City when you're growing up what did you think you wanted to be I want to be a doctor when I grew up but I was really lousy allows biology news a lot of people who want to go to medical school so okay so you went to Cambridge was it hard to get into Cambridge pretty good school and uh how did how did you get in were you to take exams and you get scholarships how do you go to Cambridge yeah so I my parents when I was 12 moved to Australia which I thought I died and gone to heaven because the climate difference was quite material between the two and I applied to Cambridge from Australia and I think they probably thought I was such an unusual person in terms of background they managed to walk talk my way in there David all right she got in and how did you do there you liked it what did you study oh I studied economics and in those days um it's it's a stun I mean what a privilege to go there it's the most beautiful place to go and study and um it's it's quite it's quite inspiring it is it's a wonderful University I know you have many affiliations with the US ones but that that place is special and the only thing that you had in the economics Department there is it was mainly by extreme left-wing Communists who are the the professors there so they have not proven to be that helpful when it came to uh and and they were usually very depressed because all of us who'd studied economics and they thought they converted them to their way of thinking we all then worked went and got applied for jobs in the city of London and turned into capitalists and disappointed them enormously all right so um after you graduated what did you do after I graduate I joined golden as an analyst and that's an easy job to get an easy job when you have it you don't work more than 30 40 hours a week yes yes so how many years did you do that so I went to Goldman for a couple of years and I was I was young when I started and everyone was I was the boring girl from Scotland everyone else was European spoke multiple languages and was a lot more exotic and interesting than me so after I finished the anus program I thought I'd better make myself a bit more interesting so I moved to Spain and did you speak Spanish before I didn't you didn't I didn't speak Spanish how do you think you were going to get through that um because you know you can bring those days when you're 22 and you just turn up and you go and do a crash course in Spanish for three weeks so now you speak Spanish well my I know one word maybe C or something like that I thought it was so I I you know my language skills are very limited so uh so you have other talents though Spanish isn't one of them but all right so all right so you do there for a couple years and then you decide to go where to America all right and where did you want to go in America I um I did the same again talk my way into Harvard Business School and I was fascinated by the American machine and if you've spent a bit of time in Europe and grown up in the you know the 80s 70s and 80s it's fascinating to America is just uh you know something you want to try and understand and the American economy and the American entrepreneurs not someone you ever want to bet again so when you went to Harvard Business School you entered in 92 something like that yes that's right you entered in 92 uh were there a lot of women in your class then uh probably about 24 25 something like that yes and there are enough of us to cause trouble are you graduated in 94 yes and who became the most famous person in your class other than you oh there's a there's quite a few people who are who've done some pretty extraordinary things in my in my class someone you know quite well the government the governor of Virginia class okay yes um so who was a better student you were oh no Glenn Glenn was definitely better yes okay yes all right so um all right you graduate from Harvard Business School and then you decide to go to McKinsey yes I did and why did you want to be a consultant uh well first of all was why didn't why didn't I go back into banking at that time and I've been in banking in the 80s where there weren't many women in banking unlike the business school um they wore suits with very big shoulder pads and they were more scary than the men um you remember that you remember the era and so uh when I looked at the Consulting particularly McKinsey I like Partnerships I think Partnerships are great places to grow up the apprenticeship model is wonderful Global institution and firm and also it was you know it's quite strategic in what they were looking at it was similar issues to M A at Golden but I thought I would have a chance of having a family a bit more predictability um in the work schedule so you did it for 10 years roughly 10 years and you had two children during that time and they're now in college they are in college yes um one at I can't say where they go to school they wanted to Duke uh happy to say and one is at Stanford but did you tell them it'd be easier for you if they were closer to each other to campus I've they fired me as a parent and I'm only hired as a part-time consultant on occasion all right so you uh you go to McKenzie you work your way up you become a partner there yeah and you know being a partner McKenzie is a great job why did you decide to leave to go to City yeah so when I was I became a mum at the same time as I became a partner and I was a I work part-time all the way through my partnership yes um and McKinsey was fantastic about that because I you know I was able to spend time with the kids before they went into school but then when they got when they were then at school that I felt like okay I can go back I'm full time working again and I you know I honestly I felt like it was time that I could prove that I would I could do it rather than just advice and so I thought it was time to you know okay go and see if you can put your um you know do you see if I could actually all right translate my words and advice into action all right she went to City at the time um did you think a woman could become or would ever become the head of City I honestly never thought about it it I mean at that point it's affirmed that there were quite a few women around in I'd be in an environment it was always very supportive around it and fantastic male mentors and others and it wasn't it was just never something I thought about this was 20 years ago so I was just enjoying the day job so you had a series of jobs everyone you were the CEO of this division or that Division and so forth and one time they asked you to move to Latin America to be the CEO of Latin America did you think that was a dead end you're going to move to Latin America get out of the way of a succession or did you think that was a way to get promoted um it was a big turnaround role and it's one of those ones you say if I did a good job then that was going to put me in good position for bigger bigger opportunities ahead and if I did a bad job then you know so be it you wouldn't you weren't afraid they would forget you you're down in Brazil or something and you weren't afraid they would forget you and everything like that no okay so you did a good job you come back and you're the head of the global consumer Bank what is that Global consumer bank at city so that's um that's retail banking that's a credit card which I believe you are a proud owner of a city credit card David I am I do have that in my hair I uh I can't I'm getting uh I don't have enough frequent flyer miles on it though I'm trying to you told me I'm not qualified for my frequent flyer miles but yeah you've got the wrong card is it a uh is it is this the best credit card you can get the um so David you have the one with our wonderful partner American Airlines but yours is black how come mine's gold how come I don't have this which is better you've got to ask for it David oh okay all right well I I although I just but you may not be flying quite as much on the commercial airlines [Music] I've done probably uh not as much as I used to but okay yeah um so okay so all right you're when did you realize for the first time I could be or you could be the CEO of the bank I mean you know there are a lot of people you have 230 000 employees a lot of them want to be Co when did you realize for the first time you had a chance to get that um when I was made president of the bank um because up until then you just you don't really have a sense but that was the point when um Mike and John had a conversation about being a likely successor but no guarantees in life and I better do a good job okay so your predecessor was Michael Corbett yep he retired about two years ago you succeeded him what was the biggest challenge you had in becoming the CEO right away um it was covered um so this was becoming CEO during covert is not the easiest because you know one's used to going around going to different sites seeing our people seeing our clients in person and while Zoom did an amazing job it is not the same and so I yeah you have to learn how to lead in a different way where did where were you working were you working out of your home or did you come in because you're the CEO um I came in I came into the office and worked from there I think if my husband would have not been too thrilled if I was home all of the time if I'm also honest um and your husband was a former Goldman Banker yeah that's right so uh he understands finance and do you ever consult with him and say I got this problem at City what do you think um he hears quite a few different things going on and he's you know he's a wonderful asset to have because he understands what you're going through and you know these jobs are ones where having someone who's supportive of you makes a huge difference so he's been wonderful my kids my kids not so interested they're not interested okay well they'll learn eventually that it's more you know a better thing to do maybe they'll go into something important like private Equity too maybe one day private Equity have a woman running yeah maybe um at the rate we're going it'll take a while probably I haven't seen that many uh firms that are moving in that direction but they're trying and we're trying but it's uh we're not as far ahead as the as the commercial Banks yet probably yeah so let me ask you when you're doing covid and you have to deal with that everybody's working at home when covet is over the theory was that people were going to come back to work but the large Financial Service firms in New York including mine seem to have very few people coming in five days a week what is your policy on that yeah very early on we realized that for a lot of people people the working from home was actually quite effective and we also had the view that covert was going to go on for a while we've been in Asia for a hundred and odd years you know we'd see my hand to SARS these things take a while to get over so we knew that this was going to be around for a while and that anyone speaking to any of their people who've got young kids homeschooling is you know that that was a nightmare for parents it was so hard commuting folk were worried about it so we you know we were very well aware of from our people that we were going to have be flexible in the approach and the flexibility was actually not hurting productivity in a lot of different areas so we made a call quite early on to say that you were definitely we're bet we're better together but that doesn't mean to say that it has to be all the time and so we laid out the reasons why we wanted people together as around apprenticeship it would be around collaboration um but think of Wall Street Wall Street in the 80s when I grew up you know you're doing all-nighters you're doing the culture's changed you don't need to have quite such that um you just don't need that culture anymore so we're encouraging our analysts to go home in the evening so they need to work work from home you don't have to be in the office to do it um if you've got some folk that have significant commutes um you know giving them a break so they can work from home and actually make some more productive so we're thoughtful about it it's not one size fits all um our Traders are in five days a week but you know we found that the hybrid model actually when you're in five days you're in five days a week I'm traveling a lot okay so I'm not actually in that but you're working five days a week not in from your home yeah but sometimes a bit more than that right more than that okay so um today city is a bank that is announced it's changing its strategy yes and you now want to be a consumer and an Institutional Business Bank in the United States is that right and yeah and you're getting out of the consumer business outside of the United States so what we've said we are okay with a pretty extraordinary bank and it's um and in its presence globally it's uniquely operate opens the doors a bank in a hundred different countries so the the city is to be the preeminent banking partner for companies and for investors and for individuals with cross-border needs and that's the vision of the bank that's the we will serve that client base um as their absolutely critical partner okay so you've sold a number of your International consumer businesses and you've announced you're trying to sell your business in in Mexico the consumer business consumer business um who are you going to sell that to oh we've been we've been fortunate fortunate look we looked at we looked at consumer Banking and we could see that originally this the view had been that you would get a lot of global scale in consumer Banking and we were very strong in a number of different geographies but the reality is you don't get as much scale globally um it's much more about local scale in those businesses so we decided let's focus we want the bank to be simple we want to be truly excellent at what we do and that's better if you're a more focused Bank around for your business lines so that's all right that's the path we're on so after the Great Recession um yes your bank did a 10 for One reverse split yep and the stock uh which was then maybe five or six or something uh became worth 50 or 60 I forget what it was something like that but you're still around 60 or so something like that maybe in the high 50s so the bank stock under your predecessors and to some extent are you hasn't really moved in 10 years is that a concern well we're transforming the bank to make sure that we're in a very different position so the we're changing the strategy of the bank as we talked about and that entails selling 65 000 employees it's 25 percent of our employee base so we can really focus and double down on the businesses that make sense of the 230 000 you have you're selling sixty five thousand dollars a while yes it's a lot and I think now it's under the belief that what where we where we truly Excel we will move every single day four trillion dollars of volume for five thousand multinational then there's no other Bank in the world that can do that um so we'll be helping them with their payroll with all of their suppliers with their pay where all the payments that they're making the system with their foreign exchange with their trade it's an extraordinary Network everywhere around the world that does that that's the that's an incredible asset for America it's a strategic asset for the states um because you'd much rather have American companies operating on American banking rails and not foreign banking rails particularly these days so that's what we're focusing the bank around is that client base and it's a big transformation David right this is bold um you know this takes some courage to do we're making really good progress on it and we're putting a lot of investment into modernizing the bank because we've had some regulatory orders against us as well to make sure that we make the Investments we need to and making sure the culture is there of real Excellence um but also to be a human Bank we've talked about that being important or all of that together that's a lot of Transformations a lot of work but we're really we're determined around it and we're completely convinced that that puts the bank into a different profitability different return profile and ultimately the benefit of our shareholders now under your predecessors uh the U.S Regulators weren't so happy from time to time about your regulatory controls that you had over your business is that one of your biggest concerns making The Regulators feel happier about what you're doing oh I mean one if you you're a bank you do want to make sure that Regulators feel that you are safe sound and that you're operating appropriately I found them to be very constructive and very helpful our Regulators give us good advice because you know like like every company these days everyone is trying to transform because of digitization they they have an insight into all the banks in the system and frankly they give us some um you know they're they're tough but they give us very good guidance and advice as though they want they want the banking system to be strong sound and Incredibly effective and I have to say um it's been I've had a lot of good guidance from them they've been helpful so when you here in Washington today as we talk and when people come to Washington often talk to members of Congress yep um do you always find that an uplifting experience for Congressional hearings hearings and those one those ones are a little tougher the questions are always Fair the answer always questions oh okay so today um the culture of any organization is critical so what type of culture are you trying to infuse into City it's had many CEOs over the last 10 years or four or five different people so the culture has changed a fair bit what culture are you trying to infuse into the organization I am the culture we're infusing is one of Excellence but also one of empathy and it's not a word some people start cringing when they hear that but I actually think empathy is a critical source of competitive Advantage because that means that you're actually listening to your clients and your customers and understanding what they're worried about you're in touch with your people and understanding what it is that they they care about and why they want to work or what they're looking for and then you put your value proposition around it and unsurprisingly that gives you Competitive Edge so I'm looking for a bank that has a human side to it as well as a bank that has a brain and is very very good at what they do so 230 000 employees you'll have fewer at some point when you do the divesters but how do you communicate uh with 230 000 people you send them emails from time to time or you do a zoom call what do you do yeah a lot of different pieces and actually it's one of the things it it's the most fun piece is communicating and talking to your people right it just is one of those great sources of energy it's wonderful traveling around the world now so going around listening and talking to them in person is wonderful when I first started in covid every Thursday night um I would write a note um just letting everyone know what was going on because it was so important to feel you're connected to something we're all we're all in our little home microcosm and you wanted to give people a sense of purpose and I'm really proud of what our bank and many other Banks did during covid where there's a huge amount of support to the communities to our clients who are suffering and going through a very challenging time if they're a owner of a small business or if they're an individual and that human touch was really important and it was an opportunity as a leader to try things that are very different also frankly as a woman I think it made it easier to have a different way of connecting with people and having a conversation with them so I complain about the fact my son didn't know how to stack a dishwasher and you know you talk about other things that were human that were going on in our lives and it made it much easier to connect to our people your employees they they call you Jane or what do they call you yes absolutely yes okay they don't call you miss razor or something like that no they do not I'm just Jane I and that's great because it you know it they'll tell you things that way they'll tell you what's going on they'll tell you things that we could do to improve they'll show you funny stories they'll tell you things they're proud about for young professionals why should they want to work in a large Commercial Bank what's the appeal of it why if somebody gets goes to Harvard Business School why not go to a private Equity Firm a hedge firm one of these you know important organizations and what's the how do you recruit people into a place like City what is it that you say is so great about being a commercial Banker how career um in within City and I've worked all around the world I've lived all around the world I've worked in St Louis Missouri I've lived in Miami and worked out of there in New York I've obviously worked around Europe as you can tell from the accent um and I've worked in all sorts of different businesses I've worked on really really tough problems you know America's Global banks are right at the center of some of the biggest challenges that are going on in the world geopolitically we get pulled into the conversations we're supporting we're playing a critical role in supporting clients and countries and and you get an opportunity to come and work and learn in a team environment in an apprenticeship model on how to tackle and solve some of these pieces it's a privilege I mean it's it's such it truly is a privilege it's extraordinary the different topics and challenges and opportunities you're pulled into okay at city now what is the large just most profitable part of your bank how do you divide the bank into you have it divided into consumer institutional yeah four main businesses so we have a um we have what we call services businesses so this is the four trillion dollars a day that moves around the world that's the GDP of Germany and that serves the multinational companies and also the the new emerging digital companies that go Global very quickly so these mid-market mid-market players so that in a way is almost a jewel in the crown um just because of the connectivity it provides and what it does for companies um and that's that grew last year almost by 33 so there's a very fast grade that's a low margin business relative to others heart no very high return on tangible common Equity it's a thing of beauty um it had been yes it's not available for sale David I'm sorry [Music] and our markets business most people think of trading what it you know what are you doing in trading most of our trading is for example helping companies hedge foreign exchange you can imagine when Russia happened in The Invasion into Ukraine and the the horrors of what happened there huge amount of companies trying to work out how do I hedge my foreign exchange what am I doing we we've been helping companies manage their volatility so it's a markets business our investment banking business corporate banking Business Supplies corporates on their lending needs on their financing needs and if they're in m a and very proud to serve your your company in all of those three businesses you were our first lender for sure thank you for your help um by the way the global consumer bank which you had it for a while yes today you announced that the current head of the global consumer bank is the new Chief Operating Officer so you obviously like the global consumer bank right well there's a couple of different Jesus he's incredibly talented he's been at city for 30 years so he's worked all over the world for you to follow the same career path we were talking about and he's very strong in terms of operational skills so when you look at who do you want at the right on your right hand side there you want someone who's going to be strong at that also our Global consumer business is changing we're focusing on wealth and then the US business so it's a different Hue now now what about diversity equity and inclusion what are you doing obviously you get a lot of attention for this because you're a woman what are you doing to make certain you have other diversity standards met in the bank it's it's a really important part of the bank because I think because because we've got people from everywhere who work at city and you know they want to work for an American Enterprise it's a real compelling point of of the bank in attracting Talent from all over the world um it's very attractive to women I've never worked I've only ever worked for American companies all of my career um and it is so there's a there's a huge power to this for city um my predecessor really was very focused on making sure that we had strong diversity of all types in the bank and we worked out that radical transparency is very very valuable so we put out three-year Targets on representation and we disclose those every you know we disclose exactly what they are nothing like disclosing something to make sure you pay attention to it and then the targets we have on both recruiting and in retention and in promoting are in everybody's scorecard and we also have pay Equity so every single year we measure you have a third party come in and make sure that every woman is paid exactly the same as a man in the same job performing at the same level and we disclose that so um okay so now currently many CEOs are under pressure to take positions on public uh policy matters so positions on voting rights or or climate change so forth do you think CEOs should be getting in the middle of talking about those kind of things or do you try to not do that when they matter to your business model and when they're important for Progress if you're a bank you care a lot about economic and growth and progress around the world so yes we will speak out on that also if it's very important to our people the communities that we're in there'll be topics we'll talk about we don't view this as being political but it's it's about what do we stand for as a bank so for example in in the climate Arena we don't see energy security and investing in sustainable and new technologies as being mutually exclusive and our job is to work on how do we help companies develop the new technology knowledge is this and also help companies ensure we've got energy security and we work on that we don't view it as political right suppose I'm listening to what you say and I say she's obviously articulate she's committed maybe I'll buy her stock you think your Stock's a good buy right now yes right very I buy it I can get an appreciation of some percent I can be happy with you think not as good as private Equity returns but good right um okay let me ask you about credit cards have you ever had your credit card your city card denied when you go to you know when I go to buy something yeah I think it does and I've been quite grateful because if there's been four it would much rather that someone's not using my card fraudulently um and that they're checking it is that you ever been called and said Somebody's using your card or they've never denied you credit because you're not paying your bills or something that doesn't happen um no I'm Scottish so I'm very very diligent about making sure that I can pay all my bills on time yes so today what do you do for relaxation uh to get away from the office from time to time you are a golfer or or something yeah well look but I love spending time with my kids so um you know being able to chance to spend some time with them they're less enthusiastic now than they used to be when they're little about that but I'll take what I get do they tell you they tell their friends who you are or they don't want to tell so when I was announced the CEO I knew it was going to happen I called up my duke son and I said didn't pick up as usual and I said please call me um and I get it all your son and he didn't pick up no no it didn't pick up he sent a mess about I'm I'm busy I said no no please okay I've got some news could you could you pick up and then he is like mum I mean I'm on Zoom calls I'm you know I'm really busy and and he did not pick up did not pick up I ended up having to text him the next morning that it was going to be announced and then he came back to me at the end of the day and said mum you were it was a text message it wasn't a call I said mum you know you're all over the news today are you important or something so you know was your I enjoy spending time with them they keep you keep your feet on the ground was your other son more responsive when you told him was he more responsive slightly but it was marginal so um but you can't work around the clock all the time so you must have some Hobbies other than your children yeah your son is a good golfer you're both your children are you a golfer too I I would probably kill someone off the First Tee right now with my golf game but I used I used to play a lot of golf I enjoyed it I loved I love traveling I mean you work for a global company um the fascination of traveling around the world I I really enjoy going to new places what's the greatest pleasure of being the CEO of City oh our people our people and our clients I mean they we've got people from all over the world and they've always got interesting stories as to why they join uh you know a global American company um they've they've used it you know it's taken a bit of guts in their story to come there so that and and they really Aspire they they believe in the American dream they Aspire for greater things and our clients are the same they tend to want to bank with us because of what we're able to provide them globally and they're some of the most incredible companies and entrepreneurs and innovators in the world like you David what's what's the biggest downside to being what's what's the frustration other than interviews like this lack of beauty sleep really okay so you don't you get uh it's the jet lag now that we're back off covert again jet like I'm not you know I'm three years older than I was and I definitely find the jet lag guys has taken it so if the president of the United States called you and you are for the last 20 years a U.S citizen yes said uh proudly uh eventually uh I'm going to have a new Secretary of Treasury and I'd like a woman to be Secretary of Treasury again if Jenna yelling were to step down I don't know that she is but eventually she might would you like to be Secretary of Treasury no no really why oh I I think I'm better suited to the private sector and I I'm I truly I've I've got a lot to do as we talked about in my day job it's a privilege to have this job I'm focused on this job and doing this job well um okay I don't need to worry about so you don't want to be Secretary of Treasury chairman of the Federal Reserve none of those jobs right I think there's some very good people in them right now okay so the final message that you would like people here to have are people watching what is the main message you would like to give people about City yeah Citibank cities on a mission um and we're going to get that mission done to be a bank that America is proud of that continues to play a very important role in the global economy and its shareholders will get a very good return from okay well you can't say it better than that I want to thank you very much for your time thank you thank you very much

Channel: The Economic Club of Washington, D.C.

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Id: zYyopG68LTU

Length: 51min 54sec (3114 seconds)

Published: Fri Mar 24 2023