| | | | |  | | By Zachary Warmbrodt | | Presented by |  | | | Editor’s note: Morning Money is a free version of POLITICO Pro Financial Services morning newsletter, which is delivered to our subscribers each morning at 5:15 a.m. The POLITICO Pro platform combines the news you need with tools you can use to take action on the day’s biggest stories. Act on the news with POLITICO Pro.
| | A frequent refrain of BNY CEO Robin Vince is that America’s oldest bank, founded by Alexander Hamilton in 1784, is in the “preparedness business.” The company is crucial to the functioning of financial markets, including that of U.S. government debt, overseeing nearly $50 trillion in assets. So what does preparedness look like when U.S. political chaos has the world on edge? Vince, BNY’s top executive since 2022, spoke with MM Monday ahead of a Q&A with The Carlyle Group’s David Rubenstein this morning at the Economic Club of Washington, D.C. What follows are highlights from the conversation edited for length and clarity. This is a momentous week in Washington. I’ve heard you say that you’re in the “preparedness business.” How do you prepare for a president of the United States potentially stepping aside in his campaign for reelection? Over 240 years, we have been through a lot of different gyrations of history. And of course, we’re a global firm — 40 percent or so of our revenues come from outside of the United States. This is the year of elections. We’ve just seen a couple of pretty significant ones in Europe, across France and the U.K. as well. Each one of these different elections can create a different moment of change for a country, and that’s probably true here in the U.S. as well. You said that this is sort of a real week. It feels like in the U.S. and D.C. there are a lot of real weeks these days, in terms of interesting moments of history. There are a lot of different tail risks in the world. You’re describing some things that are going on in the U.S. right now. But we have wars in a couple of different places around the world. We’ve had all these elections, we’ve got economic inflection points. So there are a lot of different things that you've got to be prepared for, not just as an institution, but by extension, helping your clients be able to be ready for all of that as well. Do you expect any market reaction if Biden announces that he's going to step aside from the campaign this week? Markets struggle to price in tail risks of all different kinds. … I think history also shows in the United States, in politics, that markets can do quite well under lots of different circumstances and administrations. At the end of the day, what markets really want is they want administrations and they want a Congress that is going to lean into letting the United States really prosper and seeing the economy prosper.
| | | | A message from the Electronic Payments Coalition: GUARD YOUR DATA SECURITY: AMERICANS LOSE WHEN POLITICIANS CHOOSE
With cyber-attacks on the rise, protecting YOUR data security is more important than ever. So why is Congress considering a bill that puts YOUR credit card data at risk of being hacked? The Durbin-Marshall Credit Card Bill shifts billions in consumer spending to untested payment networks so corporate mega-stores can make bigger profits. Take action now to GUARD YOUR CARD! | | | Given your global view, is there anything that the Morning Money readership should be thinking about from recent elections in the U.K. and Europe? You can see if you look back in the U.K. over the course of the past few years, one lesson I think that we can take — it’s a medium-term lesson, but it's going to be important at some point — is that markets do have breaking points eventually when it comes to fiscal responsibility. The U.K. had a real brush with that a couple of years ago, with a very, very short-lived government in their particular case that really suffered as a result of, frankly, some fiscal irresponsibility that was demonstrated by that particular administration. It's a cautionary tale that fiscal responsibility really does matter. The U.S. has got a pretty high debt load. I'm not one of those people who have a magic number in my mind to say the U.S. deficit or the U.S. debt load at $35 trillion or $40 trillion is some magic number. The critical thing, and I think not all observers focus on this, but I think the critical thing is the cost of the debt service. There’s a discussion happening about the prospects of U.S. rule of law. We have a former president who’s been convicted of felonies. We had Jan. 6. How concerned are you about the role of government institutions, and why is that relevant for markets? On capital markets as a whole, the predictability and the stability and the certainty of contracts has been a critical part of U.S. law for a long time — a lot of that [was] inherited from the British legal system originally. That aspect of certainty of business has really been a foundational pillar of U.S. capital markets because it allows people to invest according to a set of terms and understand with great certainty how that will ultimately work out and result for them. I was watching a documentary not that long ago about the Founding Fathers and that turbulent period of history and, you know, people do often say, “Gosh, we've never seen anything like it, it's unprecedented how people speak to each other and how people behave.” Gosh, they were a pretty raucous and violent bunch back in the day in the 1770s and 1780s and 1790s. So, I'm not quite sure that we've never seen anything like this before. Happy Tuesday — Keep in touch at zwarmbrodt@politico.com.
| | | | Understand 2024’s big impacts with Pro’s extensive Campaign Races Dashboard, exclusive insights, and key coverage of federal- and state-level debates. Focus on policy. Learn more. | | | | | | | | | BNY CEO Robin Vince speaks at the Economic Club of Washington, D.C. at 8:20 a.m. … World Bank President Ajay Banga delivers opening remarks at the institution’s annual development economics conference at 9 a.m. … Fed Vice Chair for Supervision Michael Barr speaks at the central bank’s conference on financial inclusion at 9:15 a.m.; Fed Governor Michelle Bowman speaks there at 1:30 p.m. … Powell testifies at Senate Banking at 10 a.m. … Treasury Secretary Janet Yellen testifies at House Financial Services at 10 a.m. … CBO Director Phillip Swagel testifies at Senate Budget at 10 a.m. … GOP economic agenda takes shape — Crypto is a big winner in the Republican Party policy platform that’s circulating before next week’s presidential nominating convention in Milwaukee. As Jasper Goodman reports, the document says Republicans will “end Democrats’ unlawful and unAmerican Crypto crackdown” and oppose a central bank digital currency. (MM readers no doubt saw this coming.) The platform also calls for defeating inflation, opening federal lands for new home construction, embracing tariffs and eliminating taxes on tips. In related news, and first in MM, the Chamber of Progress, a left-leaning tech industry association, is urging President Joe Biden to support comprehensive crypto legislation. The group is pressing on the issue ahead of a roundtable involving Democrats and crypto industry representatives on Wednesday. “[Trump] has committed to courting the cryptocurrency vote and has reportedly raised millions from founders and investors,” Chamber director of financial policy Kyle Bligen writes to Biden in a new letter. “However, you can still win this issue.” In further related news, Americans for Tax Reform has a list of proposed “free market banking reforms” next year and beyond. They include rescinding M&A proposals from bank regulators and enacting legislation that would prohibit activities similar to “Operation Choke Point.” Big personnel move — Heather Slavkin Corzo, the former SEC policy director under Chair Gary Gensler, is joining government relations firm Mindset’s financial services practice as a principal. (h/t Declan Harty) Powell hearing prep — From Senate Banking Chair Sherrod Brown’s opening statement: “Keeping rates too high for too long threatens workers’ paychecks while keeping other costs high — particularly housing.” Republicans plan to use the Fed chair hearing this morning to highlight Biden's policies that they say have contributed to inflation. They’ll also press Powell for “clear answers” on the status of bank capital rules, per a spokesperson for ranking member Tim Scott. Biden money machine slows — Though the president appears determined to hang in there, CNBC reports that some of Biden’s bundlers — allies who help raise campaign cash — are hitting pause. Our POLITICO colleagues report that Biden told donors Monday he’s “done talking about the debate.”
| | | | A message from the Electronic Payments Coalition:   | | | | | Crypto’s ‘open window’ in the Senate — Senate Agriculture Chair Debbie Stabenow gathered committee Democrats for a private meeting Monday night to strategize on crypto legislation, our Eleanor Mueller reports. At least half a dozen members, including Brown, Sens. Kirsten Gillibrand, Ben Ray Luján, Tina Smith, Raphael Warnock and Peter Welch, were spotted entering the half-hour meeting. It came as Stabenow crafts legislation, which has yet to be released, that would overhaul how the CFTC regulates digital assets. She will hold a hearing Wednesday with CFTC Chair Rostin Behnam, one of her former aides, to help advance the plan. Monday’s discussion went “very well,” Gillibrand said in an interview afterward. “I’m very optimistic.” The lawmakers steered clear of details, Gillibrand said, and focused instead on “the strategy for how we can get a markup.” Stabenow has said she wants to hold a committee vote on the bill before the August recess. “We want to make progress, that’s the bottom line,” Welch said. “We’re all very much engaged.” Brown said Stabenow’s efforts probably don’t overlap much with crypto work at Senate Banking, which has jurisdiction over the SEC. Stabenow did not respond to a request for comment. Gillibrand and Sen. Cynthia Lummis want to meld their own legislation, which would address SEC oversight, with Stabenow’s. “We see the Ag Committee as an open window,” Lummis told our Jasper Goodman. Stabenow is still in talks with Senate Agriculture ranking member John Boozman regarding her proposal, Welch said. Boozman said he has yet to see the text of the bill and hasn't decided if he's supportive.
| | | | SUBSCRIBE TO GLOBAL PLAYBOOK: Don’t miss out on POLITICO’s Global Playbook, our newsletter taking you inside pivotal discussions at the most influential gatherings in the world. Suzanne Lynch delivers the world's elite and influential moments directly to you. Stay in the global loop. SUBSCRIBE NOW. | | | | | | | | Labour’s fiscal challenge — Per the FT, U.K. Chancellor Rachel Reeves says Britain’s new government has inherited “the worst set of circumstances since the Second World War.” She’s ordering a review of spending under Conservatives. The country’s fiscal situation is a challenge as Reeves vows to boost growth, make the U.K. a “safe haven” for investment and spur housing development. On a related note, Reeves’s predecessor and MM interviewee Jeremy Hunt says he will not seek to be the new leader of the Conservative Party.
| | | | A message from the Electronic Payments Coalition: CONGRESS: OPPOSE THE DURBIN-MARSHALL CREDIT CARD BILL
Credit cards are a staple for millions of Americans, providing secure payments, fraud protection, and valuable rewards helping to pay for everyday purchases. The Durbin-Marshall Credit Card Bill threatens to dismantle these benefits, forcing our credit cards onto untrusted networks. Mega-stores like Walmart and Target stand to gain billions, while Americans lose the convenience, security, and rewards millions of hardworking families rely on to pay for everyday purchases. Congress: oppose the Durbin-Marshall Credit Card Bill. Learn more and GUARD YOUR CARD! | | | | | | | Follow us on Twitter | | | | Follow us | | | | |
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