 Hello, everybody. Morning, is it morning? I never know what time it is in Davos. Good morning. Welcome to this panel. I'm very excited to be here. My name is Sarah Eisen. I'm a host of CNBC, where I do a show every day. I tend to noon Eastern time. We're going to talk about the global banking system with the right people. We're going to talk about whether banks are prepared for the future. We're going to talk a little bit about how banks are doing right now. So I'm very excited to introduce our distinguished panelist, Labomir Krupa. Did I say it right? CEO of Associated General Gita Gopinath. Of course, from the IMF, where she's the deputy managing director. Sergio Armani is the CEO of UBS. And Mary Erdos is the CEO of asset and wealth management at JP Morgan. So we've got a nice representation of the world and the industry. And 2023 was a weird one, because it's hard to believe back in March, we had in the US bank failures, including Silicon Valley Bank. I mean, there was a lot of drama. We had that rush shotgun acquisition between UBS and Credit Suisse. Sergio swooped into the rescue. We had higher interest rates. We have two wars around the world. I mean, a lot of headwinds. And yet it feels like Gita global banks aren't in terrible shape. How would you characterize it right now? Yes, Sarah, I think the good news is that despite the very sharp increase in interest rates and the conflicts that we have seen, the global banking system has overall held up quite well. Now that said, there is still a tale of weak banks that we see even now in the current environment. For instance, if you look at the US and if you look at the number of banks that are at risk, that make up about 9% of banking assets in the US. Now another area of exposure that we do worry about is in terms of exposure to commercial real estate. And that is a bigger deal in the US, somewhat lesser so in Europe, but still true in Europe too. And the reason I'm mentioning the fact of these tailed banks is because what the March episode taught us was that all it takes is a couple of mid-sized banks to get into trouble, that there is a very quick loss of confidence in the system as a whole. I mean, there was the risk of there being a systemic crisis and required very strong action by the Fed and by the Treasury. So I think we should keep in mind that even if the whole system looks in a good place, the tail can still wag the dog. If you look more globally, emerging markets, excluding China, have actually held up quite well. Their regulatory capitals have been quite high and that has actually helped them tide over this difficult period. China, of course, is a different story of its own, which is it has banks, very large banking sector. I mean, the top four banks of the world are in China, but also they have the issue of the exposure to the property sector, which is weak, local government financing vehicles, which are in some trouble. So the China banks, I think there are issues that one needs to worry about, especially again among some of the smaller banks, but big message, global banking system has held up well, but I don't think that is called for complacency because what the March episode taught us is that it just takes some small number of banks to have a big shock to the system. What did the March episode teach you, Sergio, besides that you're gonna have to come back in and lead the UBS? Well, that was clearly a surreal moment, but I think what has told me is that, in essence, regulators should be very happy and banks that implemented the more stringent regulation after the financial crisis were solid, broadly speaking, other than one idiosyncratic issues, which were part of the solutions and part of a save-even event. So when we saw lack of trust in the system, the large banks were placed to go. So in a sense that a focused and well-designed regulation has helped to make the system more resilient, and it's very important that we now look at the post-mortem in a very focused way. The fact that the banks that were vulnerable were not subject to stringent or more stringent regulation, which is almost elementary regulations around how you manage your interest rates, book, your liquidity. It's something to be spoke about in order to avoid further crisis. Also, I wasn't surprised to be honest that the new world, the digitalized world would translate into a faster outflows of money. I was surprised that, for example, that was not recognized ex ante by regulators. And lastly, I would say- What, a bank run in the matter of hours? Yeah, what technology and what uninsured deposit-based means in a digitalized world. And the second one is, broadly speaking, particularly in the U.S., this disconnect between monetary policy and prudential policy. So once you go into a huge and rapid hike of interest rates, not realizing what would happen to your weakest link in the banking was a little bit of a surprise for me. Can I just add on that? So the banks are a reflection of their clients. A bank is as strong as the type of clients it has and the relationships that it has with it. And it's a relationship business and who you choose as your clients and how you do that. It shouldn't be a surprise as to what happens when you get in a stressed out situation. So Sergio's point about in the U.S., in the regional banking crisis, you had 90% of the clients of Silicon Valley Bank and First Republic Bank were institutional clients who were uninsured depositors who are now in a digital world. So in a digital world, you don't have to wait even until eight in the morning. At midnight, you can say, out, I want those assets moved after a tweet. And everything goes. And so it all comes down to regulation and stress testing and making sure that you're running a proper financial institution based on the clients you have and the likelihood that they are to do A or B. So J.B. Morgan Chase, incredibly blessed to have the clients that we have. We bank half the households in the United States of America. We bank 90% of the Fortune 500 clients. We share many clients with my colleagues on stage and we're fortunate enough to work with clients where we say, we wanna lend you money but we wanna do this in the right way. We don't wanna do this in the wrong way. We wanna have a relationship with you where we're there for not just one thing. Banking is not a commodity. It's like a doctor. You don't just pick and choose whatever is the cheapest doctor because you want help on a surgery. That's not how you think about it. You think about it for a very long-term health of your own body or your own company. And that's really what this is all coming down to. So it shouldn't have surprised anybody that the regulations of small and mid-sized banks in the U.S. didn't even look like European banking regulations. They looked very different, which is why when we talk about what are the regulations that we should have going forward, they should just be sensible regulations that when you stress test the situation and you have to stress test it for the modern world that we live in with instantaneous decision-making, you can't think that people are gonna stay around because they like you and they like the relationship. They're going to act in their own best financial interest and that's exactly what happened. And neither Sergio nor we at J.B. Morgan want to have to go through those crises, weekends, where we're being asked to take on a company because it just means that the system is fragile. But thankfully, when you're a strong enough institution with a Fortress balance sheet and the ability to do that, then at least somebody is there to be able to help. All right, so let's get into regulation later because I know you have some opinions about Basel III. But, so you both ended up, I mean you ended up with Credit Suisse, you ended up with the First Republic. Were you surprised that the regulators let you acquire that? And it does feel like the big got bigger as a result of what happened in March. And I don't know if that's a good thing or not. I don't think either of us would use the word let. Let, yeah. Let, forced? We were asked. Asked. Well, you were, you were forced. Well, I wasn't there, but I guess I started to say that and which was one lessons also out of the crisis that you got into, in order to be asked to be part of a solution in addressing a crisis, you need to be credible and prepared. And the business model you pursue, leading into that moment is very important because you know, in the last few years, we saw a lot of crisis. You mentioned a few of them that we are facing or challenges and there is nothing different than what we saw in the last 10, 20 years. So that's a constant. So what you need to do is always to be prepared for the unexpected. And one of the scenario you need to play is how you take commercial advantage in organically or non-organically in a crisis. So you need to be prepared for it. So when you do that, then you need to realize that in banking, M&A happens mainly in crisis. If you look at the U.S. banking system and the dominance of the big players not only in the country but also outside the country, has happened as a big consequence of the financial crisis. The consolidation that happened during the financial crisis was the differentiating model, the moments between the U.S. and Europe. In Europe, the decision was, let's try to make them smaller and irrelevant. In the U.S., the design was, let's make them stronger. So in a case, are we larger? Yes, but are we stronger and more diversified? Yes, that's what matter. Right, I mean, a lot of people think you got the deal of the century. Salomir, I'm... That one we can't talk about. Did you not? I already mentioned it's the prize of the century not a deal of the century. In order to be the deal of the century, we need to work hard in the next two or three years and unlock the potential. You know, it's not a present, it's nothing for free. So, still hard work to be done. It wasn't free, but what was 3.8 billion dollars? It's a shell of what it once was. You are welcome to join the executive board and help us in implementing... Salomir, what about you? It doesn't make it harder to compete, right? For France's, I think, number three bank, right? You're a fairly new CEO. These guys just got bigger because they were forced to take on new banks. And it is a globally competitive business. I don't think it makes it harder to compete because, you know, in my experience, we're competing at a very granular level. And that's what's interesting in our business. There's not something like Sogden competing with JP Morgan or UBS. It's us competing with the clients that we share for the right business, for more business, et cetera. And so it's really depending on how competitive we are at a very granular level. How competitive we are in financing some energy infrastructure in the U.S. and advising how to put this together in a market where we can take, for instance, some slightly different risk on the construction period where some of our American peers, you know, have a different approach for this. So finding the right spots where our expertise matches the needs of our clients and where we can compete in a relevant way with our colleagues and friends, that's how competition happens in our industry. So it doesn't make it harder, but it makes, you know, for very good competitors and we're happy to try and match them. Where is the opportunity for you? Because a lot of people, I know you're focused on turning around the business and a lot of people were very eager to hear about your plan and the market. Didn't receive it so positively. So I'm curious how you're thinking about that opportunity now. Well, I mean, there's many, again, coming back to my point about granularity, the opportunity is wide actually in all these components. But to be specific, let's take the transition, right? And in terms of financing the transition. And it's not only about the money, right? Because, you know, we all have a lot of money to lend or to a lot of expertise to accompany the clients in financing their investments. It's also how you help the corporate and all the actors think about the strategy and how to move from point A where they have a certain business mix, a certain energy mix and a certain strategy to be, you know, prepared, you know, preparing for the future, being ready to be in point B in a certain number of years. And what does it mean from a strategic perspective? What do they have to divest? What do they have to invest in? What kind of technology should they bet on, et cetera? And we're, because of our sector expertise in the space and a reach from Indonesia to the US and obviously across the entire world in an entire value chain of natural resources and energy, how do we help them think about their transition? And for instance, there, it's a massive opportunity not only to lend to projects, although this is obviously required, but also to help our clients think about it and reach the right resolution, right? Because this path from point A to B is actually partly unknown and very complex. I didn't think we were gonna get to climate this early on in the conversation, but let's go there because Gita, we were talking earlier about how important the role is of banks to do this. Where are we in this process and what do you need to see? I mean, indeed, there's a very large need for climate finance. And if you look at the numbers, by 2030, the need is for about 40 trillion. And what we've seen from the very large banks, the so-called GTIBs, commitments of about nine trillion to finance new sustainable projects till 2030. So that's a good chunk of the 40 billion, but still, I mean, the banking sector makes up about half of the financial system, so more is certainly needed. But before we get there, and I think the point that you made, that there was certainly a demand for climate finance, but we still have all kinds of holes in terms of data, in terms of information architecture, right? I mean, concerns about greenwashing are relevant. And so I don't think we've actually managed to put together the information architecture that's needed, the kind of the transparency that's needed to get a lot of capital flowing very quickly to the climate space. And here again, since regulation is absolutely critically important, regulators are going to play a very important role. Now there's, of course, the flip side of what climate means for the banking sector, which is the transition risks and the risks to the banking system of that exposure. Again, there, we're only kind of in the early stages of trying to determine what that implies in terms of risks to the balance sheets of banks from climate exposures that they have, and much more needs to be done on the regulation and the supervision side. Is that a big risk for banks? If we have simulations, others have run simulations that you have a very disorderly adjustment of climate transition, that could be very costly. Mary, how do you think about that? I mean, therein lies a bank works for its shareholders and for its clients. And of course, its employees and its communities, but in the bulk of our job is to be a fiduciary for clients where we're helping them invest and to help for our shareholders. And so it's not like we have a target for climate investments or climate financing. We're helping our clients to do that. And so it gets to the point of regulations, which we were talking about before. Go for it. Who in their right mind would make regulations more onerous on any institution to finance a wind or a solar company than it would do to finance a social media company? The Federal Reserve? I don't understand. So a lot of this is just sort of, what is it, ready, fire, aim, think about putting these regulations out. There's sort of this sense that like, if you're big, you must be bad or I must have to sort of control you. Again, all we are is a reflection of our clients. We're just trying to help our clients. So we're trying to do the best we can. We're trying to do it in a controlled manner. We haven't even talked about technology investments. I mean, the reason that people keep turning to the institutions that are up here on this screen are because this is serious stuff. This is the safety and soundness of financial institutions, but it's the safety and soundness of your money. You want your money moving around the world in today's environment where AI is taking over and people can crack in. We have 45 billion, billion cracks into our system that don't make it through, not on an annual basis, on a daily basis. There are people trying to hack into JPMorgan Chase 45 billion times a day. That number is what it is. The worst part about that number is it's 2X what it was last year. This is your money. So you need people, we invest 15 billion dollars in technology every year. So does this panel. And you think about who's going to invest the money to protect your assets, to make sure when you're moving them around the world, when you're going to make the wind or solar investment and it's got to hop out of your bank and into a company. Is it going to make it there from point A to point B? Are you going to do it in the right way? Is someone going to be there to protect you? If somebody hacks in, can we see it? Can our systems do more than our brain can do? The AI work that we do in our company, we have 62,000 technologists in our company. We have more engineers than Google or Amazon. Why? Because we have to and we want to and you want us to. You need us to protect that. And so all of this is an ecosystem where you care deeply. Again, it goes back to a doctor or a hospital. You care deeply about who it is that's there to take care of you. And so is the point that the regulators are going to make that harder for you to do? I don't really have a sense of where they're coming from and Gita, maybe chime in here on the goal of regulations is obviously to be able to make a safe and sound system. So what is it that made us think that we would give regulations like this to high end G-SIB big banks, big financial institutions and other regulations to smaller institutions and think you weren't going to have some weird things happen in 2023? So now what happens when you take all of those institutions, financially regulated institutions and you say you can no longer lend money to this whole swath of clients without having to put up massive amounts of capital? Where's that lending going to go? It's going to go to another swath of people. You would be naive to think that we wouldn't be sitting here next year or the year after talking about the crisis that happened because of that, that played out. And so it sounds very self-serving when financial institutions get up here and say, financial regulations, and that's not really what it's about. It's just about trying to figure out how do we make a safe and sound system so that money moves around the world freely? I agree with Mary that the goal is to have a safe and sound system and not just for the banking sector but the whole financial system. So certainly we worry about regulatory arbitrage which is that if you put a lot of regulation on banks then the money goes to the non-bank financial system and that's where all the trouble comes up. But that said, Mary, I think we, of course we have to keep in mind that we did have the great financial crisis and it was thanks to the regulations that followed that we haven't had the kind of turmoil that we saw during that episode. So it is important to have the right amount of regulation and the right supervision, not just the regulation, but that was the other thing we took away from the March episode was that regulation alone is not going to cut it. You need the supervision. You need to make sure that banks are actually doing the right risk management practices and you can't take that for granted. So we need to push on that front but you're right, we have to be careful about regulatory arbitrage and it shouldn't be that we, you know, we make, we completely control one part of the system and then you have another system that's unregulated and that's where the money goes and that's where the problem comes. So we certainly need to look at the whole set of issues, not here we're talking only about banking and its future but there is much more out there. But if I can say. Please, Mr. Sergio. I'm shocked everyone wants to talk about regulation. On the transition, I want to go back for a second on the transition and the regulatory pressure that we have on from this perspective in terms of kind of risk, et cetera, just in the context actually of the panel to go back to the idea, you know, who's thinking about the future and why is it that sometimes we're portrayed to your point as the ones who need more control, who need to be, you know, really overseen because we would be the bad actors in terms of the transition or fossil fuel economy, et cetera. We at Salkton, and I'm sure my friends here have similar stories, we were financing renewable energy in the 90s. I don't remember any regulator coming to us in the 90s telling us, you know what, 30 years from now it's going to be a big deal. So why don't you start working on this? In early 2000, we had a team dedicated to ESG research on equity, same thing, right? We are doing this every day, right? We, the adaptability, which I think is the key answer to are we ready to the future? It's not so much are we ready to the future? Are we adaptable enough to deal with all the scenarios that are out there in terms of our future, right? And so the point here is we are an essential cog in the economy, and so we play a very important role in making these things happen. But we're not the ones tasked with figuring out what the entire balance of the transition should be, right? We're not setting the behavioral standards of society, right? We can be very compliant, we can accelerate the change, but we are just banks, right? We have a big responsibility, but one which is being a cog in something, in a framework that is being set by others, and frankly in democracies, by democratically elected government officials. I mean, if I can say, because this is a very important topic, because I'm touching also on your point. I do think that there is a big difference between the prudential regulation necessary to avoid the mistakes during the financial crisis to the topic of addressing the climate topic. There was a prudential issues, we address this issue, we discuss it, I don't want to discuss it any longer, because it's quite clear, and I don't think we disagree. Where I disagree is the fact to compare it to the current issue. And it's the ABC of banking. Banks are facilitators between saver and investors. And to ask us to be the driver for a topic that is clearly should be driven by political decision, and not by regulatory. Because trying to enforce a political agenda through regulatory regime without going through a democratic and public debate about it is wrong. And I'm not so convinced, with all due respect I have for regulators, that they always get it right. Yeah. Okay, so why should they be in control of dictating how we go to net zero? Our function is to help the transition. Our function is to resist the tensions that are coming clear and clear from both sides of the debate is very polarized. And what we have to do is to be able to have a reliable regulatory system that allow us to help the transition. Because the transition is the solution to that. If we try to be too binary and too quick about, not only are we gonna create consequences for banks, but also for the entire society. Because we're gonna eliminate so many people, take out access to energy and a chance to grow and create wealth. And you know in many countries in the world the topic is not about CO2 is to get food, is to get to the next level out of poverty. So we have to pay attention to what we ask banks to do. We can help, we can sustain, but we are not. We should not be seen as the driver of those debates. Please. Sergio, you should have let me go before you. Because I would have clarified. I would have clarified. Actually what I wanted to follow up with was when I referred to regulation and supervision climate related, it is not about mandating or about directing banks to do certain amounts of lending on climate. That was absolutely not what I was suggesting. There is a prudential aspect to climate risks, which is something that absolutely requires regulation and supervision. There is, I also made the point that if you want to get enough money going to climate financing, you need a good climate data architecture, clear a sense of what are the markers for what is a truly green project and what is not. I think that's where there is a role for policy to play. But just clarifying that at no point did I say that the idea is about telling banks that you've done nine trillion, but please now go to 20 trillion. I wasn't saying that. I am at a mandate. No, no, but that's, I haven't understood it that way. My point is that to front run, the real danger is not such a directed moving to what you should do, but it's front running regulation can be dangerous. Because if you let the market say, okay, in five years time, we expect you to be there, otherwise you're gonna get punitive capital. If you don't, that's where we need to pay attention. How we've implemented, how we phase in regulation in order to reduce the credit risk for banks and facilitate the transition. So, I- And again, we have a level of flexibility in the end, right? That's the point I'm trying to make due to some policymakers I'm meeting. We have a high degree of flexibility. So, watch out if there are too many mandated things from a business mix perspective, watch out because five years from now, 10 years from now, you're gonna wake up with banks being greener, much greener than you wanted, right? And this decision is not for us to make, right? This decision on figuring out what the path is, is for democratically elected officials to make these decisions. I feel like we're getting a lot out of our chest here on regulation. Yeah, and we're talking to many people who are not on stage here, just so... How much time do you guys spend with the regulators and talking about these issues in an exchange on this? Too much? Are you involved? No one wants to talk, as you can see here. No, the topic is not really how much time you spend in talking, it's the outcome of the talks. And in a sense, I do think that we need to really try to focus on fewer topics and try to deliver visible and tangible outcomes than trying to aim for unrealistic short-term objectives. So, in a sense, it's very important that at every level, also the way we communicate to the broader public influences that. So, if people keep hearing negative things about the financial system and how it's not helping and how it's not doing things, which in many cases is totally unfair, that's a problem. So, we have to also watch carefully what we say and each of us in public. You mentioned AI. I mean, this is Davos 2024. So, we've got to talk about AI. Mary, you talked about it. Implications for your clients, implications for your industry and how you bank and how you provide financial services. How are you thinking about the opportunity in front of you here? You know what I realized after a couple of days in Davos? There's no conversation about FinTechs taking over the banking sector anymore. Does that make you very happy? It's not a happy or not happy thing, but sometimes we do a lot of hand-dringing about sort of how the world is gonna change. And I think this goes back to any very smart company, sovereign wealth fund, pension fund, investor group, they're going to embrace the things that are gonna make them better. And so AI, I mean, just think about how the world has changed in the past year, just the past year and the exciting things that are ahead of us. So we're in a doom and gloom. Let's get ourselves out of the doom and gloom. There's a lot of things that could go right in the world as we move forward and AI will be an exciting part of that. AI will be an exciting part about making a lot of this stuff delightful. It'll be about putting data in your fingertips as a client, as a company. Don't you wanna see all the things you're doing and optimize it against how other people are doing rather than somebody else just having that data or you having it to do yourself and somebody else having it to do yourself? AI changes the world on all of this. And it's the curiosity that you apply to AI that gets the most out of it. And so what really we all have to go through is a conditioning of our own companies in terms of how are you embracing it each and every day? Are you the leaders using AI on a daily basis so you get your own head ingrained in it? It's becoming a mandated course next year in the Harvard Business School curriculum to learn about using AI if you're going to be a future leader. It's the same thing as technology. I always say to people, you have to take technology, you have to understand Python coding, you have to do all of that, not because you need to be a technologist in the world, but because if you don't, how are you going to have a technology group that you're going to be able to talk to and identify with and understand that? So AI is going to change all of this. It's going to make it really exciting. It has lots of dark sides to it as well. So we have over 70 major elections that are happening this year. We've already just had one in Taiwan, but we've got some really, really major ones. We've got Russia, we've got India, Pakistan, Mexico, US, the ever important European parliament regulations, elections, and all of those can go the way the voters want them to do, or AI can change that in a way that none of us have really contemplated, because none of us really understand what's happening in the psychology of how AI is hitting us in a way that we may not be in control of and there's a lot of people with a lot of bad actors. So we have to think about the bad sides of it and the good sides of it, but all of us have to embrace it on a daily basis and use it in our lives. And again, it starts with the top and it trickles all the way down. So, you know, at our institution and in the companies that we're investing in, it's one of the first questions we ask. How are you using AI? How are you embracing it for the future? Because if you don't, someone else will and they'll be eating your lunch on the next morning. How are you using AI? How are you embracing it? I mean, we're trying to do our best. It's a lot of experimentation all over the company. I think we all share this. We're trying to figure out the right way to reap the real benefits, which are the disruptive ones, right? So, because the way I see it is, and I'm glad you mentioned the fintechs, I think it's an interesting topic. The way I see AI is that it's not at the stage and I might be wrong, but that some new fintech based on AI is gonna take over anything on our end is that it makes the technological competition within the walls of us, right? Within the regulations, within the traditional banks, universal banks, et cetera, much more disruptive potentially, right? Because it's gonna come from within, right? And you can imagine from a cost perspective or client or risk management quality in the end, you may imagine profound changes that would make the competitiveness of one of us really different from the others, right? And this is the risk and the opportunity, frankly, to watch. And therefore we need to both experiment but also find ways to make sure that somebody and some buddies within the company think in a challenger way about the existing organization and the existing, like pre-existing realities of both operations or ways to approach client quality or risk management. And so that's what we're trying to figure out, like try to understand how we can, you know, focus the efforts on where it's gonna matter most from a competitiveness perspective. Gita, I mean, they're not talking about replacing analysts with AI but there are clearly productivity savings here and that's a big part of the opportunity I would think for banks where labor is what your biggest cost, right? IMF has done some recent work on this and some studies as far as jobs and replacements and this is gonna be a big societal and economic disruption. How are you guys thinking about what to do here? So I think everybody agrees that this is transformational with a lot of promise but also risks associated with it. And we have the new study that shows that about 40% of the global workforce is exposed to AI. That doesn't mean it's a bad thing. It could mean that that means that some fraction of that will benefit from it. It will raise their productivity. That fraction is about half of that 40% and the other fraction will have a harder time. You know, maybe low wages, displacement and so on. The banking sector is, you know, one of the, in the forefront of adopting this technology if you just look at where the money is being spent on AI by industry, banking is up there among the top. Clearly lots of benefits from it. Financial inclusion, even in terms of, you know, like AI driven biometric identification that makes things safer for the payment system. Lots of pluses, productivity increases and so on. But of course there are still these issues about when loans are being made, are you gonna use this technology which can then generate embedded bias, the questions of data privacy and whether you, you know, this technology accidentally reveals confidential information. Autonomous AI, we just saw one example where that happened. So those kinds of risks exist and need to be taken care of. There's another risk which is not like imminent but something that we are thinking about at the IMF which is if we enter in a world where all the major banks are using this technology, which by the way is being produced by three or four big companies in the world and then adapted, are we going to see like supercharged herding behavior? Which is are we going to see where you have AI bots or AI models that are sentiment driven and feed off of each other and you then end up with much bigger amplitudes in the financial cycle which is you can get big credit booms and big credit bust. This is something that we are looking into and it's, again, I'm not saying it's an imminent risk of any kind, but this is something that we are paying attention to. I do wanna open it up to the audience so get a question, we have a few more minutes but before I do that Sergio, I feel like we have to, when we're talking about the outlook for banks, we have to talk about, banks are cyclical, right? We have to talk about the economy, we have to talk about rates and I know you have some strong views. Don't share all of them because we have a CNBC interview coming out with you but tell us a little bit about what 2024 looks like on that front. I mentioned it briefly before so I don't think that we should expect less unexpected events. I do fear or hope I'm wrong but I do think that there is a level of complacency in the financial markets in respect of the inflation outlook. If I just look at the most recent developments in the Middle East with the shipping being diverted so translating into a 30% higher cost for goods. I mean, I can't imagine inflation won't suffer from that and therefore the outlook for four or six rate cuts for 2024, they look a little bit optimistic. Also, because I do consider that for central banks to get the timing wrong in cutting can be quite dangerous because then having to correct later on the effect of a wrong decision, I'm not so sure it will be as easy as it was and I have to say chapeau for the way they managed this first round of taking down the inflation and keeping a pretty good discipline but I think the jury's still out on that. So the expectation on rate cuts and the volatility that could come out of it in addition to the geopolitical issues that we face and the elections can be a factor. So what it tells you is only one thing. You say banks, cycles, you need to focus on what you can control and you need to stay agile and you need to stay prudent. And lastly, it is clear to me that the opportunity cost of being wrong in my outlook, in my view, at this stage is fairly limited. But it's not only exactly what Sergio said, it's so important that we just think about this for one second, when the central banks around the world start lowering interest rates, it is a circular reference. The second they do that, people feel better, they start spending more, you can have more inflation instantaneously, it was only a year ago, we sat here. Fed funds were at four and a half percent and the 10 year was at three and a half percent. That's an inverted yield curve. Two things, one of two things has to happen. Either the Fed funds has to go down or the long rate has to go up. So we were at four and a half Fed funds, we were at three and a half, guess what? We went to five percent on the 10 year. That's not surprising. What's surprising is we went from five back to four. Now we're at five and a half percent Fed funds rate and a four percent 10 year, one year later. What's going to happen? One of those two things is going to happen. But remember, when this comes down, it can be circular, exactly what Sergio's saying. And so we shouldn't have a lack of short-term memory that it took us only four months to go from a 10 year at four percent this summer to a 10 year at five percent. It only took us four weeks to go from four and a half percent to five percent. So as a person that grew up as a fixed income portfolio manager in the 90s, like, you ain't seen nothing and we just saw it. So what is making us think that it couldn't just happen? People say it's unprecedented, it just happened last year. And so we all have to be very ready for that and that has many, many ramifications for borrowing for your companies, how you're going to finance yourselves, where you're positioned in your portfolios for your asset allocation, the allocation to the fixed income markets, which is much better now starting at higher yields, but we are not living in a zero interest rate world anymore or not. There is inflation and then there's all these geopolitical issues that can cause us to fall into another spectrum. But the world recalibrated itself to live in a zero interest rate environment. We're not there, we're much higher and we're probably gonna stay much higher for longer. And I think that Sergio mentioned you could have volatility. You absolutely will have massive volatility. We just don't know, sitting here at the beginning of 2024, what we're gonna be talking about at the same time next year, but you can be sure that it will be something we haven't expected. I mean, that's a bummer. I think you're sure that what we discuss here every year turns out to be not really, so also going back if I can, just 30 seconds, the artificial intelligence and the fact that banks and the financial system has been historically in the last 30, 40 years a big user of technology, embracer of technology. One issue that we have to, although I do believe that AI will be transformational faster than any other trends we saw in the past, let's not exaggerate on how fast it's gonna change the system, right? So it's gonna be an evolution. It's not gonna be a revolution for all the reasons we mentioned before because we have to be very prudent on how we do it. And of course it's gonna make also maybe one point that we haven't touched. Of course we talk about a lot of jobs being eliminated, but we are also facing in many countries in the world demographic trends and immigration trends that are forcing us to look for talents and being able to replace some of these missing talents because of demographic effects. True efficiencies and effectiveness is also positive things for society. AI will not take someone's job. The person using AI will take somebody else's job. And therein lies the opportunity for massive shifts in finding great talent that has access to a computer and curiosity for AI and they can lead the world. Let's get some questions in our final moments. I think there was one in the back there. Yes, please. Hello, really quickly if you could. Hello, thank you. We talked about regulation and if you agree with me the ultimate objective of regulation is to actually protect depositors of money. We talked about AI and the bad ones specifically but we didn't talk about fraud. Fraud and AI, not AI, the one adopted by banks but the other AI and we didn't talk about fraud. Fraud cases, suspected digital fraud cases has increased by in 2023 by 18% and the volume increased by 27%. All of that is taken from depositors money. So do you believe regulators are paying attention to that? You as banks are doing something sufficient on that? Thank you. I mean that's our whole job is to protect and the fraudsters get smarter, savvier, quicker, more devious, more mischievous. They go in to the law firm that's sending you an email. They take over the email and they send the bank a note saying please send the money here. Who am I to question my lawyer that's responsible for the M&A transaction that I've been working on for the past six months with them? That is happening everywhere in the world on a daily basis. Don't accept emails. I mean it's just, it's so hard and it's going to become increasingly harder and that's why staying one step ahead of it is really the job of each and every one of us. I think there is, given the tremendous uncertainty including in terms of the scale of the impact of this technology and the way it's evolving, I think a general point can be made that policy could be playing catch up. And so we could risk having a big event before we actually figure out how to fix it. It's not a given, but that is a risk. Higher capital rules, just kidding. One more really quick one, cause we're over time. Anyone? Okay, real, oh sorry, last one. Thank you very much for really exciting discussion. I'd like to ask you about that private credit market. I'm running a private equity fund management company in Japan and Asia. And then I'm understanding that a private debt market has been showing really rapid growth and replacing like a reverse finance business or project finance business of conventional banks. I would like to understand why it's things that happen. You banks are giving up a private, I mean, the private finance business in the future. I would like to anticipate how it would be happening in Japan and Asia. Look, I don't think we are giving up on anything, but it's fair to say that the two effects, first of all, there is a regulated industry, a highly regulated industry, has hard time to compete with a not so regulated industry. By the way, not everything that is outside the banking system is not regulated, insurance companies are regulated, a lot of fund managers are regulated, but part of the competition that comes into banking for private credit is not regulated and therefore has an advantage. It's okay, I think that we are still complimentary, I do see the benefits of that. But if you look at, for example, in Europe, in Europe, private credit is likely to develop as a consequence of the lack of developments in the capital market union, the death of, so the banking system is not able to rely on an efficient capital markets system like in the US. And therefore, if we don't address the issue of a capital market union, a single market in Europe, what's gonna happen? Things are gonna go outside the system, which eventually, over time, could create some unintended consequences, but that's inevitable. This is the way financial system works. I think that's a whole topic, final word. Just very quickly, one thing to keep in mind is the clients, from my perspective, our clients in the banking industry, they don't only need a product, they need a relationship. All of us have had clients for 100 years. We have companies we've been for 100 years, and they need that relationship, and so in the end, I think there's a lot of complementarity between the two, and that we keep the relationship, and the advice, and the trust, and they provide some of the capital, and that's fine by me. Thanks for better. They do different things. That's what I learned today. I'm way over time, I'm gonna get in trouble. Thank you, oh, I think we got a lot done. Thank you very much, to our distinguished panelists.