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TEASER: Brian Moynihan - Bank Of America CEO Commits to UK
00:11:14
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- [00:00]
A
Welcome to the Master Investor Podcast, a special teaser episode with Brian Moynihan, the chairman and CEO of Bank of America. In this teaser episode, we're playing just his comments on the UK and then coming in a couple of days will be our full conversation covering his career, bank of America, the US and markets more broadly. That's coming next week. But for now, here is our teaser episode with Brian Moynihan on the UK Foreign.
- [00:34]
Let's touch on the UK for a bit, if we can. And I think I'm right in saying that you've got about 6,000 people in the UK overall, you've got another a thousand in the Republic of Ireland, 2000 across continental Europe. So the UK is very much still your stronghold for the region.
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B
And by the way, we just announced relatively a short time ago, we put 1,000 more people. We're going to build up 1,000 in Belfast.
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A
Exactly. I saw that that was announced a month or so ago, so put it to sort of 7,000 or so across the United Kingdom.
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I actually had missed the extent. I know you've increased your headcount in Europe, but clearly not that much relative to the uk. There's a lot of questions at the moment. The budget just passed, taxes went up again. Are you committed to the uk? Kind of. Regardless, or even in particular in light of the recent government changes.
- [01:27]
B
Absolutely. This is our headquarters of the world. So Bernie Menzel, our head of international, sits here. And so Brexit happened and we just have to adjust to it. So we put more people in Paris. And we went to Paris first because the talent base was there. So why do we go to Paris is instructive to why London is so important. Talent schools, places to live, city people want to go to. Remember, we're just people. We're people, buildings and computers and that talented teammates have got to want to live where we're sending them. So London is a great city for young kids to come work. People from all over the world will come work here a while and leave, and others will stay here permanently, and British citizens will be employed by us. And so it's a core thing. And when I talk to the Prime Minister and his team, I. I say, that's the advantage you have. You're built. And while other financial centers are trying to build. And there was a day when Moscow was going to build a financial center, and there's Hong Kong and its ups and downs and Japan and Tokyo. And I said, you're built, you're there. You've got to realize this is one of your best industries, you have many other good industries. But a great industry for you is financial services. Understanding the history of the financial crisis and some of that is important to understand. But remember that if you can attract these jobs that are very strong jobs, they create a lot of throughput to the jobs are an average in our company of $125,000, average pay and above. And so they're jobs that. The average pay in the UK would be much higher than that, frankly, because we don't have the consumer business. And so they're good jobs. Their jobs employ a lot of good people. Those people spend a lot of money. And if you get the rules set right and the taxation set right, fair to your citizens, but fair to the companies, you can win. And that's exactly what I'd said to the current Prime Minister and I'd say, and his team, and I'd say it over and over again. It's more upside for the UK right now than anything else.
- [03:20]
A
And do you think that, I guess your message was heard because a year ago, obviously some business taxes, national insurance contribution in particular, went up, various taxes went up last week, but perhaps with less of a focus maybe than some would have expected on banks and big businesses. Do you think he's listening?
- [03:41]
B
Well, we already had the tax from the financial crisis. It was supposed to be sunsetted. It never got sunset.
- [03:46]
A
This is the bank's levy.
- [03:47]
B
So I think it's a little hard to think that it's good to do more. But look, whether they listen to me precisely or generally, I think I'm not the only one making the same point, which is, look, you want employment to stay up of all types. We have, we have a lot of people in Chester. We're putting a thousand people in Belfast and we're just starting to deploy there. Those are places where, you know, a good 1,000 people in Belfast is a major, is a major commitment. And so you want the place to be attractive to all different types of employees. And you want it to be a good place for people to live and work and have kids and things like that. So this, this country has it, and that's the speeches. But if you make it too hard, too high taxes, you overregulate for the activity that actually goes on here. And, and that's another point which is, look, we don't run a consumer bank here, so you don't need to worry about your people being affected by our operations. We've got $300 billion of capital behind this operation that's down the street. So don't worry so much about it. It's financed in the markets, it's not financed by the deposits and stuff. So regulate it to say, I want to make sure that you're fair and that you're doing it wise, but don't over regulate it. If it's not really affecting your communities or commercial bank, you're regulated. So I think if they get the regulation right, the taxation right, they have more to win than lose. But they have to think about it. Not.
- [05:09]
For the banks that are indigenous, that serve the common people, that's one thing they got to worry about for the people who are here, because they're corporate headquarters, international corporate headquarters is here. You want to be the best to them and understand what's important to them because they can bring more and more resources and help. And if you, if you're not paying attention to that, just like the cities in the United States I talked to what will happen, we won't pull people out. We are our peers. What happens, the next person we add won't go here. And that's what you want to avoid. And so you want to be able to set tech center up in chester. We have 18,000 programmers, so it could add a lot of programming jobs. So you want to be attractive that the next job comes to you. So the point I make is keep the regulation right, keep the taxation right. You got to be fair to your people. And in its last budget, I think they did the banking system because of the prior taxation, it was okay.
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A
And I guess to round that off, obviously taxes did go up. And I don't think a business is cheering that on necessarily. But is your message ultimately that from the perspective of the CEO of Bank of America, Keir Starmer and Rachel Reeves, in light of tough we've got high debt problems. We talked about that in the US in light of those challenges, they're doing the right thing for bank of America to stay committed to Britain.
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B
This package, it was fine with bank of America, but I think I'd ask a different question, which is I think they've got to be careful of capital markets, reception of the budget. This has nothing to do with bank of America. And they've got to make sure all countries have to understand that the simple question a business asks is you want higher taxes or an individual ask higher taxes for what? If the for what is not something that makes sense, that's when you get in trouble. If it's for what is something that makes sense for growth and things like that. And I think that's the debate that countries have to have and fiscal policy has to have, what is the tax rate increase for? And then the reality of trying to keep a balanced budget in our country, we're on a trillion 8 deficit. That's like the size of most GPS. That's got to be dealt with. They try to deal and they try to have a balanced budget. And so you can argue the choices, but the principle of having a balanced budget, which spent the money in a way that they thought was consistent with their constituencies, they're in power, they get to do that. But you got to be wise in that, that you got to make sure that the taxes you're raising are actually going to produce growth and things. And that's where you got to pay attention to balance. And I think the fair dialogues around that question, are you investing enough in the future of the company country, excuse me, versus other things? And that's something that the Prime Minister and the Chancellor, the Exchequer have to make sure they sell the story on.
- [07:52]
A
Just rounding off on the UK but with a question that I think applies to the US as well. We started this interview a few minutes late, which of all of the reasons I completely understand, because you've come fresh from a meeting with His Majesty the King, because you chair this thing called the Sustainable Markets Initiative and with him, which I think is really interesting. And this is something you care passionately about. And it's trying to make capitalism work for everyone and to I guess highlight again at a time when there is a lot of inequality and therefore a lot of questions about it, that capitalism is the right way forward, but you need to make sure it works for everyone.
- [08:33]
B
Yeah. And so the discussion today was with a group of private. The thing is, the King started this before he was King and it was geared that this was a private sector convening to help figure out the way that the private sector could both make money and help the transition in emissions and reduction, things like that. So the discussion day was with a specific set of companies about methane reduction, the oil and gas companies and things like that. His power to convene and have the dialogue about this is superior. But those companies have already agreed to a reduction of methane. And the question is, can we get more companies to commit to. 40% of all of oil and gas production in the world has committed to reducing methane in its operations. Leave aside all the different scope 3 emissions and all this stuff. This is just in my stuff. Can I stop flaring and methane. And these large companies are sitting there saying we can help other companies and others do it. And so that's the kind of dialogue that the King can convene. And it's really good. So we've been doing this for a number of years. It's all private sector led, it's all volunteer army, it's all, all the employees that work for the SMI have all been seconded by the companies. But it's been great. It's 250 companies from around the world. And it really came out of the urgency from the King at Prince Charles time. King Charles now as founders saying, I want us to make progress, but it's gotta be done a way that capitalism drives it, private sector drives it because then it sticks to the ribs, then it isn't susceptible to politics, policy changes, that this year we'll do this and next year we'll do that. And I think that's the interesting thing about it. And it's been going and the team does a great job.
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A
And he's someone that impresses you every time you see him.
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B
His briefing and his knowledge and his passion about this. It not only impresses me, but I've seen it in front of so many people over the last six years. It impresses everybody. And it's about how do we make this work for society and, and for capitalism? Because it's gotta work. That's how it sustains.
- [10:32]
A
That was, of course, Brian Moynihan, the chairman and CEO of Bank of America. Specifically, his comments focused on the UK. In a couple of days, our full 30 minute conversation on everything else, the US economy, US markets, bank of America and his career. Make sure to stay tuned for that.
- [10:54]
The Master Investor podcast is sponsored by Interactive Brokers. Please do remember the views expressed in this podcast are for general informational purposes only. Nothing in the podcast constitutes a financial promotion, investment advice or a personal recommendation. More on that in the show notes.