Summit Notebook

Exclusive outtakes from industry leaders

from Newsmaker:

Watch: Why Dominic Barton worries about inflation

For more videos from the Future Face of Finance Summit, click here.

Hensarling proud of fiscal conservative creds, embraces Tea Party allies

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It is clear that House Financial Services Committee Vice Chairman Jeb Hensarling is proud of his credentials as a fiscal conservative.

He may have more competition for that label after the November election swept in members of the Tea Party. But he sees that as a good thing. FINANCE-SUMMIT/HENSARLING

U.S. Treasury’s Wolin on tying debt limit to fiscal discipline debate: Don’t

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Deputy Treasury Secretary Neal Wolin is urging lawmakers not to tie the U.S. debt limit to the debate on fiscal discipline.

Arguing about the future fiscal path of the United States is fine, but playing games with the debt limit can hurt U.S. creditworthiness, he warned. FINANCE-SUMMIT/WOLIN

Can a U.S. regulator simply talk banks into lending? FDIC’s Bair is trying

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When a regulator talks, do banks listen?

FINANCE-SUMMIT/BAIRBanks are returning to profitability after the financial crisis and the head of the Federal Deposit Insurance Corp is trying to nudge them into lending again.

“You can’t force them to lend,” FDIC chairman Sheila Bair says. “But I think jawboning helps.”

from Newsmaker:

How to create a new industry

Last week, President Obama went to Cleveland to meet with small business owners to hear about their successes and setbacks. One of the prominent themes of that meeting was innovation. In his closing remarks from the forum, Obama cited multiple examples of innovation in companies he sees moving the economy forward, such as Ashlawn Energy, a company that Obama says is "poised to manufacture a next-generation energy storage system in Painesville [Ohio] that will improve efficiency."

While we wait to see which companies will shape our future, an example of one company that transformed the U.S. economy over 100 years ago is Alcoa, the world's leading producing of aluminum. The current head of that company, Klaus Kleinfeld, will be at Thomson Reuters tomorrow to discuss how to thrive in a new global economy as part of the Reuters Future Face of Finance Summit. But before we get ahead of ourselves, there's a lot to learn from Alcoa's past -- and present day -- success.

With Asia’s growth potential…who needs CDO-squareds?

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Chat among markets in the U.S. and Europe is that if the authorities clamp down on banks too hard, they’ll simply up sticks and move more of their business over to Asia.

This conjures up an image that markets in the Ealynch3.jpgst are set to become a haven for some of the now frowned-upon practices that were seen in the build-up to the financial crisis such as slicing, dicing, and re-slicing of subprime debt.

from Blogs Dashboard:

David and Goliath had an easier time of it in the comparison stakes

By Huw Jones

The planned merger of Deutsche Boerse and NYSE Euronext will create the world's biggest bourse with 90 percent of on-exchange traded derivatives in Europe.
It has certainly focused minds and boosted CEO airmiles.
Speakers at the Reuters Future Face of Finance Summit were upbeat about their chances of winning a slice of this market which shows more promise for the bottom line than share trading, where competition is as ferocious as margins are thin.
Chi-X Europe, busy finalising its merger with BATS, took time out to explain how it too is targetting derivatives -- believing that a heady brew of shares, futures, options and ETFs on one platform will turn trading heads their way.
Last week saw the London Stock Exchange unveiling plans to turn its Turquoise pan-European platform into a derivatives winner too. And LCH.Clearnet, the clearing house, also sees
derivatives as the future.

The only way is up, it seems.
"The important thing in these markets is it's not about first mover advantge," is how Chi-X Europe CEO Alasdair Haynes bravely puts it.
LCH must also be hoping that is true -- it wants to clear credit default swap trades, a niche ICE has largely to itself in Europe so far.
And the clearer's CEO Roger Liddell hopes there will be an opportunity to clear derivatives linked to the STOXX indices --which are currently cleared and partly owned by Deutsche Boerse's Eurex.
So all well and good.
If you have a killer contract everyone wants to trade, that is.
Deutsche Boerse's Eurex was able to bulk up its derivatives volume in the Bund contract. Euronext's LIFFE has short term interst rate derivatives in the bag for now.
On-exchange derivatives contracts are proprietary, unlike shares which have no patent and can be traded by any platform.
Past efforts to create new derivatives contracts have often run into the sand as turnover failed to materialise.
It may be a case on being able to bring a horse to a new derivatives platform but it will be harder to persuade it to drink unless the liquidity is there.
So far, nobody has a compelling answer to that dilemma.
Huw Jones, Reuters London

from Newsmaker:

Ask your questions here

We are less than 24 hours away from the Thomson Reuters Newsmaker event with Alcoa CEO Klaus Kleinfeld and McKinsey & Co. CEO Dominic Barton, and there's still time to post your questions.

The live interview with them will take place tomorrow, March 1, from 8:30 a.m. to 9:30 a.m. The theme of the interview is "Thriving in the New Global Economy." Topics will include:

from Newsmaker:

Barton and Kleinfeld debate at Davos

Thomson Reuters March 1 Newsmaker guests Dominic Barton and Klaus Kleinfeld shared the stage at Davos this year with Fareed Zakaria, Jamie Dimon, Eckhard Cordes and Maurice Lévy. The Davos panel, titled  "The Next Shock: Are We Better Prepared?" centered around Jamie Dimon's vigorous defense of the banking industry. Although a bit overlooked in the coverage of the event, both Barton and Kleinfeld spoke about their predictions for the global economy. Watch this video to see why Barton is concerned that a bubble is developing in emerging markets, thanks to their urbanization push, and watch Kleinfeld explain why the health care industry should be viewed as a "job engine."

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from Newsmaker:

Meet Klaus Kleinfeld

GERMANY/ On March 1, Alcoa CEO Klaus Kleinfeld sits down with Global Editor-at-large Chrystia Freeland as part of our Thomson Reuters Newsmaker event "Thriving in the New Global Economy."

WHO IS KLAUS KLEINFELD?
Kleinfeld, 53, was born in Bremen, Germany. He studied at the University of Goettingen, where he earned a master’s degree in business administration, and the University of Wuerzburg, where he gained a PhD in strategic management.

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