Name: Keycorp CEO Believes Industry's Future Hinges On Regulation Reform
Uploaded: 2019-12-18
Duration: 4 min 20 s
Description: Beth Mooney says it’s time to loosen regulations.

 Beth, you became the CEO of Keycorp at a difficult time. It was the height of the financial crisis. But now, revenues are growing, your stock has doubled during your tenure, you've made a big acquisition, and, thanks to that, you're now the 13th largest bank in the United States. So what's next? Where do you go from here? I've started talking to our team about what would it look like to be the best regional bank in the United States. Do you think getting there would be helped by doing some more acquisitions? Bigger doesn't necessarily mean that you're the best. So to me, we just did complete an acquisition. And I think it did help make us a better company, but I don't think acquisition is a precursor to being the best. It's only if it fits your strategy, benefits your shareholders, and helps create capabilities in the company. Tell us a little bit about the business environment for your bank. You have branches, now, in 13 states from Maine to Alaska, as you like to say. What are you hearing from your clients? How prepared are they to borrow more, invest more, hire more? There is a degree of optimism slash confidence in our borrowers and our business customers, but I will tell you there's also an overlay of a little bit of caution right now. So I think one of the things everyone needs to understand is the agenda in Washington, how is that going to sort out? And I've talked about it as there is somewhat of a coiled spring that folks are-- companies are holding back till they understand the environment more fully. But they still do remain generally optimistic. And I think the economy, while not growing gangbusters, is very stable, very strong, and keeps on progressing. So what do you think the impact of higher interest rates will have? Will higher rates scare off consumers from buying-- from getting a mortgage, getting a personal loan, a car loan? And the same for businesses. Are they going to hold off for the same reasons? I still see the consumer as relatively healthy. Home purchases are going to be up this year, mortgages are going to be up modestly, in terms of purchase mortgages, credit card, auto. You know, there is some slowing, but there is still this healthy pace of the consumer right now. And when I look at some of our corporate borrowers, they actually are going into the long-term capital markets expecting higher interest rates and trying to lock up, in public debt markets, very favorable rates. So again, there is a little trade there for the banks. You mentioned a moment ago about the Washington agenda. And just recently, Treasury Secretary Mnuchin was talking about some possible banking reforms, believing that this would be true economic growth. As a bank CEO, are you in favor of these moves? I do think it's time to look at a cost benefit analysis of where, if you were going to move the pendulum back without losing the core principles of the financial safety of the US economy. And I think the Treasury Secretary in the paper that was issued by Treasury is a good start to look at what is systemically important, where is the size of a bank or is it the complexity of a bank. What are the cost benefit of some of the regulations, such as stress tests and the frequency. I think all that is important. And I do think there is an opportunity for still a very responsible regulatory environment. But one that perhaps is slightly more constructive to allow the industry more latitude. Well the critics say that by easing up on these bank regulations, it could create another banking crisis, another financial meltdown. Does that worry you? It does not worry me. I think it will be positive for the economy. And I don't think anyone's proposing an environment where the regulations are such that you could repeat some of the sins of the past. So if the White House and President Trump called upon you for your advice, what kinds of regulations, if any, would you be in favor of? Let mainstream banks, other than the very large banks, have more control over their capital, how they invest it, how they lend it, how they return it to their shareholders, and not have as many regulations around how they run their business because I think it's a constraint to our economy. 

Keycorp CEO Believes Industry's Future Hinges On Regulation Reform

Leadership

Beth Mooney says it’s time to loosen regulations.

Beth, you became the CEO of KeyCorp at a difficult time. It was the height of the financial crisis. But now revenues are growing. Your stock has doubled during your tenure. You've made a big acquisition. And thanks to that, you're now the 13th largest bank in the United States. So what's next? Where do you go from here? I started talking to our team about what would it look like to be the best regional bank in the United States? Do you think getting there would be helped by doing more acquisitions? Bigger doesn't necessarily mean that you're the best. So to me, we just did complete an acquisition, and I think it did help make us a better company. But I don't think acquisition is a precursor to being the best. It's on Lee. If it fits your strategy, benefit your shareholders and helps create capabilities on the company, tell us a little bit about the business environment for your bank. You have branches now 13 states from Maine to Alaska. If you like to say, What are you doing for your client? How prepared are they? Borrow more, invest more, higher, more. There is a degree of optimism, flash confidence in our borrowers and our business customers. But I will tell you there's also an overlay of a little bit of caution right now. So I think one of the things everyone needs to understand is the agenda in Washington. How is that going to sort out? And I've talked about. It is there is somewhat of a coiled spring that folks are. Companies are holding back until they understand the environment more fully, but they still do remain generally optimistic. And I think the economy, while not growing gangbusters, is very stable, very strong and keeps on progressing. So what do you think the impact of higher interest rates will have? Will higher rates scare off consumers from buying from getting a mortgage, getting a personal loan, a car loan and and the same for businesses? Are they gonna hold off for the same reason I still see the consumer is relatively healthy? Home purchases are going to be up this year. Mortgages are going to be up modestly in terms of purchase mortgages, credit card, auto there is some slowing, but there is still this healthy pace of the consumer right now, and when I look at some of our corporate powers. They actually are going into the long term capital markets, expecting higher interest rates and trying to lock up in public debt markets. Very favorable rate. So again, there's a little tradeoff there for the bank you mentioned a moment ago about the Washington agenda. And just recently, Treasury Secretary Mnuchin was talking about some possible banking reforms, believing that this would be true economic growth as a bank CEO. Are you in favor of these? I do think it's time to look at a cost benefit analysis of where, where if you were going to move the pendulum back without losing the core principles of the financial safety of the U. S. Economy. And I think the Treasury secretary and the paper that was issued by Treasury is a good start to look at what is systemically important. You know, where is the size of a bank, or is it the complexity of a bank? You know, what are the cost benefit of some of the regulations such a stress test and the frequency? I think all that is important, and I do think there is an opportunity for still a very responsible regulatory environment, but one that perhaps was slightly more constructive to allow the industry more latitude. Well, the critics say that by easing up on these bank regulations, it could create another banking crisis. Another financial meltdown that worries it does not worry me. I think it will be positive for the economy, and I don't think anyone's proposing an environment where the regulations are such that you could repeat some of the sins of the past. So if the White House and President Trump calls upon you for your advice, what kinds of regulations, if any, would you be a favorable let mainstream banks, other than the very large banks, have more control over their capital, how they invest it, how they lend it, how they return it to their shareholders and not have many regulations around how they run their business? Because I think it's a constraint to our economy.