Bloomberg Talks: HSBC CEO Michael Roberts Talks Banking Industry

Date: October 16, 2025
Host: Bloomberg
Guest: Michael Roberts, CEO, HSBC

Episode Overview

This episode features a timely conversation with Michael Roberts, CEO of HSBC, covering the current disruptions in the banking industry. The discussion spans critical topics: ongoing US-China trade tensions, the impact of tariffs and supply chain shifts, credit cycle risks, advances in AI and quantum computing in finance, the status of the US dollar as reserve currency, and the shifting geography of global financial flows. Roberts provides an insider’s perspective on how banks and multinational companies are responding to unpredictable macroeconomic challenges.

Key Discussion Points & Insights

1. US-China Trade Tensions and Supply Chain Adaptation

Timestamp: 00:29–02:16

• Trade tensions have become routine, but recent rounds are escalating unpredictability for international businesses.
• Supply chain resilience is now central to boardroom discussions—firms are actively redesigning networks and even business models to mitigate tariff impact.
• A recent HSBC survey of 5,000 clients found near-universal concern about rising prices and the unsustainability of absorbing 100% tariffs.
• Companies are searching for the “least vulnerable” or most “tariff-proof” operational bases.
• The ever-changing tariff landscape feels like “whack-a-mole,” requiring constant vigilance and strategic flexibility.

“I think supply chain has now come to be one of the probably the most discussed terms in a C-suite today… this current round [of tariffs]… tells you that they’re going to have to significantly change what that is because 100% tariffs, you can’t absorb 100% tariffs.”
— Michael Roberts [01:26]

2. Tariff Costs and Consumer Price Pressures

Timestamp: 02:16–03:09

• Typically, about 70–80% of tariff costs are being absorbed by producers or importers, but the remainder is starting to reach end consumers.
• There’s a limit to how much importers and distributors can absorb; “it will come to an end soon.”
• Delayed capital investments and a cautious approach are resulting from this cost squeeze.

“Most are saying we can’t continue to absorb that much additional cost …therefore it will start shifting more and more to the end buyer, the client or the customer.”
— Michael Roberts [02:38]

3. The Labor Market, Investment Slowdown, and AI

Timestamp: 03:09–03:58

• While companies are not yet resorting to layoffs, hiring is slowing as firms delay big investments amidst uncertainty and cost pressures.
• Predictability is critical for capital allocation; uncertainty stalls spending and hiring.

“I've seen slowing of hiring but [not] real firing today… it's the capital and the investments that you're starting to see slow down quite a lot.”
— Michael Roberts [03:37]

4. Credit Froth, Inventory Financing Fraud, and Due Diligence

Timestamp: 03:58–05:16

• Rising concern about credit cycle risks, especially regarding “inventory financing fraud”—using the same collateral multiple times.
• HSBC is leveraging technological advancements from their trade business for stricter due diligence across all lending.
• Banks must improve collateral verification to stay ahead of increasingly sophisticated fraudsters.

“We’re using technology we developed in our trade business and using it throughout all of our lending platforms… These type of financing arrangements are going to require much more due diligence, much greater technology, much more specific understanding of exactly what you’re financing.”
— Michael Roberts [04:36]

5. AI, Quantum Computing, and Trading Edge

Timestamp: 05:16–06:56

• HSBC partnered with IBM to bring quantum computing to financial markets, focusing on the bond market.
• Combining quantum and conventional computing delivered a 34% improvement in trade prediction—a significant edge in matching buyers and sellers.
• This breakthrough is “initial,” but HSBC expects rapid industry-wide adoption due to the competitive urge to reduce latency and gain predictive edge.
• The future will see traders augmented, not replaced, by quantum power.

“That led to a 34% improvement in our ability to predict a trade… I don’t know how it wouldn’t give an edge, but I think it’ll be, once we roll it out and others roll it out, there’ll be quick adoption by the industry.”
— Michael Roberts [05:57]

“Will it be less traders? Don’t know. But are they going to have powerful machines? Definitely.”
— Michael Roberts [07:06]

6. The Debate Over Dollar Dominance and Reserve Currency Status

Timestamp: 07:24–08:41

• Significant discussions in Asia about dedollarization and concerns over the US dollar’s debasement.
• Despite such conversations, the dollar remains dominant across trade flows and reserves (60–80% in key metrics).
• No viable alternative currently exists; the “twin issue” is what to move to if not the dollar.

“The mere fact that… large holders of dollars [in Asia] are talking about it… tells you something is different.”
— Michael Roberts [07:47]

“If you’re going to go away from dollars, what are you going to do? …There is no other alternative today.”
— Michael Roberts [08:17]

7. Shifting Center of Global Finance

Timestamp: 08:41–09:56

• The US remains the capital market center, but trade and financial flows are rapidly increasing between the Middle East and Asia.
• These new flows are not simply routed through the West; wealth and capital are originating and staying within those regions.
• The emerging world order is more “balanced,” and finance will no longer be as US-centric.
• HSBC is well-positioned owing to its strengths in both Asia and the Middle East.

“I think you’ll see Asia, Middle East coming together more and more, and I think you’ll have a much more balanced equation… those flows will not just go through New York as they used to in the past.”
— Michael Roberts [09:36]

Notable Quotes & Memorable Moments

• “It’s been a bit of a whack a mole because you have to constantly look at where the next tariffs will come from and that’s been a challenge for many companies.”
  — Michael Roberts [01:47]

• “We understand we could do that but it will come to an end soon.”
  — Michael Roberts on absorbing costs [02:55]

• “Companies need to understand where they’re going to put down a lot of capital, that that capital is going to produce good returns… I’ve seen slowing of hiring but real firing today.”
  — Michael Roberts [03:37]

• “The fraudsters are getting better at it. So we’re going to have to respond to being much better on due diligence.”
  — Michael Roberts on inventory debt fraud [04:52]

• “I don’t know how it wouldn’t give an edge… technology does bring a substantial edge [in trading].”
  — Michael Roberts [06:24]

• “There is no other alternative today (to the dollar). And so that’s the twin issues that you have.”
  — Michael Roberts [08:17]

Timestamps for Important Segments

• 00:29 — Episode starts; US-China trade tension discussion
• 01:26 — How firms are adapting to tariff unpredictability
• 02:38 — Tariff costs starting to hit end consumers
• 03:37 — Labor market & investment impacts
• 04:36 — Credit froth and new technology for due diligence
• 05:57 — HSBC’s quantum computing breakthrough for bond trading
• 07:47 — Asian sentiment on dedollarization
• 09:36 — The new multipolar structure of global finance

Conclusion

This episode offers a comprehensive look at the turbulence in global finance from the CEO of one of the world’s largest banks. Michael Roberts shares how top corporates are managing the shocks from geopolitics, technology upheaval, and seismic changes in global financial flows—while emphasizing the need for resilience, smarter use of technology, and a forward-looking, globally aware perspective.

For listeners interested in finance, global trade, and the frontiers of banking technology, this episode is both insightful and highly relevant.