By coinnews 
00:00 Brian Sozzi
Yahoo! Finance descending on the Milken Conference once more. Joining us now is BNY CEO Robin Vince. Robin, good to see you. Feels like I just saw you a couple of months ago at the World Economic Forum.
00:09 Robin Vince
Yeah, it wasn’t long ago, Brian. It’s great to be here. Great to be with you.
00:12 Brian Sozzi
Um, last time we talked was actually on your earnings a couple weeks ago, and you made a great point that there’s a lot of risks and uncertainty right now because of the trade war. But the market has rallied back, uh, pretty aggressively. Where’s the disconnect?
00:23 Robin Vince
Well, I think there are a few things to note. So number one, we’ve essentially made a round trip in the stock market since the election. If you look at where the S&P is today versus the S&P the day before the presidential election. And actually, it’s about the same level as it was on Liberation Day. So there’s a lot of talk about the anxiety in the stock market, it’s understandable because there’s a lot going on. But actually, in terms of actual levels, we’re sort of unchanged. Now, of course, the world’s a complicated place, uh, right now, and there is a difference between the sentiment and the economy, which is pretty poor, and the facts of the economy which have actually held up pretty well.
01:03 Brian Sozzi
Then is the market wrong? If conditions are poor, maybe the market just has this whole thing not correct.
01:12 Robin Vince
Well, the market looks through to the future. It always does. And so the question is that the market’s trying to answer, which is maybe a little different than the question you and I are answering, it’s not where are we today, but are where are we going to be. And so, Secretary Benson’s here at Milken as well, talking about the three legs of the stool of the administration’s policy. It’s about trade, including the non-tariff barriers. So it’s not just about tariffs. Also about deregulation and unlocking business potential, and then about taxes. And so what we’re seeing, I think, with the market moves is the first leg of the market down was focused on one of the three legs of the stool, but there are two other legs. And so now the question is, the market’s looking and saying, I wonder how this is going to come together. Now what would be most helpful would be a really good trade deal because that’s going to start showing the path if that can happen. And I think the market would take a lot of confidence from that. If we don’t see that over the course of next couple of months, the market’s probably going to start to question that again.
02:19 Brian Sozzi
Is the market too optimistic on a trade deal?
02:23 Robin Vince
Well, you know, the market’s looking at more than just one thing, and we all should look at more than one thing because the ultimate question here is, how’s the US economy going to do over time? And are those three legs of the stool going to come together to be successful? Now, I was just in Europe two weeks ago. I was in the Middle East last week. I was in India last week as well, really getting out there, connecting with clients, talking to our clients, understanding how they’re seeing the world. And so it also depends on where you are and who you talk to.
03:00 Brian Sozzi
A lot of, uh, of course, big international contingent here at the Milken Conference, as always. A lot of CEOs that I talk to, global CEOs, they are concerned that there has been damage done to the US brand because of everything happening on trade. Do you share that sentiment?
03:17 Robin Vince
I think it’s a little bit more complicated than that. We saw in the first Trump administration that there was just a change of approach, and some of the European allies, foreign partners just weren’t used to that. We’re seeing the same change of approach again, and this, this time there’s definitely a question on people’s minds, but it is different region by region in terms of, okay, what does that mean? What does it mean for the dollar? What does it mean for treasury markets? What does it mean for the US as a, as a reliable global partner? And, you know, you get different answers to that question as you travel around the world. There’s clearly more anxiety in Europe. That’s probably peak anxiety on this question right now. I think in the Middle East, they were a little bit more sanguine, to be honest, uh, and that reflects their place in the world both geographically and geopolitically.
04:09 Brian Sozzi
How disruptive would it be if the international community begins to lose trust in the US brand and they start to sell treasuries, for example?
04:21 Robin Vince
Well, you know, you have to remember what the treasuries represent. They represent the safest investment on the planet, and there’s a reason why they are considered to be the risk-free go-to asset. And it’s all very well to say, hey, let’s go and find another one, but there are a lot of things that underpin that US resiliency, that trust, the legal system over a long period of time. All of the big financial institutions in the world that help that market, the depth, the liquidity, the, the predictability of the process. And so there are a bunch of different legs underpinning that stool. There are many countries that would be, would love to be able to replicate that, but it’s a little easier said than done.
05:08 Brian Sozzi
Is the treasury, is the US Treasury bill, is it still risk-free? Is it still safe?
05:17 Robin Vince
So it’s always the case that any asset in the world has some element of risk or uncertainty associated with it. There’s no such thing as the absolute perfect answer. You can buy gold, but somebody could steal the gold. You can buy treasuries, people can call into question aspects of the treasury market. The right question, I think, is, what is the most risk-free asset in the world, and what is the one that offers the liquidity associated with it? We do a lot of things for the US Treasury market. We have a very good vantage point on that. We’re settling over 20 trillion dollars a day of US Treasuries on our various different platforms as a company, and I think you can see with the volumes, with the movements that the market is a very robust market. And it’s worked really well. The only thing that we’ve seen that other market participants have seen is that there has been at various times reduced liquidity because of the volatility in the markets, but that’s normal for markets, because when you have a fast-moving market, people are going to make bid offers in smaller size, the liquidity at the top of the order book, the depth at the top of the order book, that’s going to reduce. It has, did it for equities as well as for treasuries, but the underlying infrastructure, the rails of the financial system, they’ve been rock solid, and they haven’t wavered through the process at all.
06:22 Brian Sozzi
Is our things still functioning correctly? Have you seen signs of stress at all?
06:43 Robin Vince
Hundred percent.
06:45 Brian Sozzi
And of course, this week we’ll have a key Federal Reserve meeting. You’ve, of course, been in this industry for a while. You’ve seen a lot of Fed moves, things they have done and haven’t done. Do you view right now as the most challenging or one of the most challenging periods for the Federal Reserve?
07:01 Robin Vince
Yeah, I think that falls into. I think that falls into the question of it always feels more challenging to deal with a situation when you’re in the middle of it, and then with a little bit of the distance of time, you sort of forget how challenging the last one was. We’ve had a lot of challenges. You know, COVID was, I’m sure, a very challenging time for the Federal Reserve. It was only a few years ago. We’ve so we have these these periods, and each one, when you’re in it, probably feels like the worst. But the Fed’s having to navigate this. It’s clearly tricky, and there is an issue here back to this point about the facts of the economy compared to the sentiment of the economy. Sentiment is not great on the economy because the administration is taking some difficult decisions that are creating some resets, create anxiety on the expectation and hope of a future payoff from that. And if that’s successful, it could be a great strategy. But there’s an if in that statement. So the Fed’s navigating that, but the reality is, the economy’s actually been performing. And so you saw that with the jobs report last week. GDP was obviously more negative, but there’s expectation that it’ll rebound in the second quarter. So, you know, the Fed’s probably, be my expectation that the Fed will do what they’ve indicated they’re going to do, which is wait for more data and wait to see how things develop. There’s no particular advantage to them to go rush ahead of the game, although I understand that that’s a complicated question, lots of points of views.
07:05 Brian Sozzi
Outside of the Great Financial Crisis, of course.
08:38 Brian Sozzi
Uh, lastly, Robin, um, amidst this turmoil in markets, have you been able to push through with your business initiatives as a CEO? I can’t tell you how many leaders I’ve been talking to where they’ve had to put a halt on that big project they’re working on or reassess how many employees they’re having their business. I know you’re pivoting to more of a platform-based company. Have you made any changes?
09:00 Robin Vince
Well, we’ve been forging ahead. I mean, our people are excited about the change that we are on as a company. We’re serving clients. Now, clients want more things from us, actually, at times of uncertainty. They want more help. They want more advice. They want to be able to use our platforms as they challenge their own expense models. There’s outsourcing opportunities for us because we’re a platforms provider. So the short story is, we’re going through a transformation. Of course, one has to be careful. One has to prepare for the worst. We’re all risk managers at heart across all industries, but particularly in the financial services industry. But we’re plowing forward, and we’re, we’re optimistic about our business model, and we feel we’ve got the right platforms to help our clients move forwards. That’s exactly what we’re doing. We’re focused on going forward.
09:44 Brian Sozzi
All right. Well, good luck at the conference. Uh, we’ll talk to you soon. BNY CEO Robin Vince. Thanks for coming on. Appreciate it.