Carolyn Ryan (CR): There are just an immense number of global, national and local regulatory and policy changes happening now. We're certainly in a period of rapid and significant policy change that's impacting virtually everybody, and it's impacting everybody a little bit differently. We're seeing a lot of movement nationally in the US on tax changes and related to that, our federal budget. There's a lot of early signals from the administration as far as deregulation. But the biggest one that everybody is focused on are the tariff policies or policies. Those have global impact, but that's trickling all the way down to the local level and State Street, as a global company with a local presence, we see that across the board with our clients, both in terms of direct impact on the client and then how their local governments or state governments might be responding to these policies.
Joe Barry (JB): In terms of the developments impacting our clients, I mean, you can't talk about that much without talking about the US approach to tariffs, which have been fairly disruptive to the markets. I think we all have seen a bit of a pause on that from the Trump administration. But I know our clients had a lot of worries about that as it played out, both in terms of how other jurisdictions might retaliate. Or, you know, kind of engage with the US on the tariffs. And also about the, you know, the possibility that the tariffs on goods could be extended to some similar concept around services, which would obviously be quite disruptive to our markets. I think that is past for the time being. I think, you know, there is still a lot of discussions going on around tariffs, and the Trump administration has moved on to the other two pillars of their economic plan, which are related to the tax bill, you know, legislation to address U.S taxes, of course. And then and then a bigger project, I think, related to a deregulatory approach across all the government, which will have significant impacts on financial services. But the real action, though I think will be on subjects like, crypto and digital, where we're already starting to see the barriers to engaging in those businesses for regulated companies drop, even for banks in the US. The Federal Reserve and the other agencies have the connections to make it easier for banks to get into that space. But also just, you know, a lot of, changes on the SEC side, where are you going to see a very strong agenda by the current leadership of the SEC to allow regulated funds, unregulated crypto players, all sorts of people to get into the digital and crypto space. And I think, you know, the shift even, you know, we think about crypto to start. But the shift to digital assets more generally, tokenization and all that will be going to happen much more quickly now than we would have thought in previous administrations. The second primary piece I think about, and there are others, but the second primary piece I think about is the focus on allowing more access to private assets across the board in terms of, you know, the retail space or the institutional space. There are limits in the US, for example, on how pension funds might invest in private assets, depending how they're structured. So I think we're going to see that change. And so that seems to be the biggest changes. We'll see. I think at the end of these, you know, four years of the Trump administration, you know, setting aside what else might happen to the tariffs side, I think you're going to find a regulatory system much more friendly to digital assets, crypto and private assets, across the board.
CR: At State Street, we look to engage and collaborate with policymakers at all levels - national, global and state and local governments. We do that by having conversations with them. Generally, you know, we're all searching for the same outcome, which is a safe and secure financial system. We work with these policymakers to tell them how the policies they're thinking about may impact our clients or our company, and our ability to serve our clients. We advocate for the policies that we think maintain a safe and secure financial system, but also allow us to serve our clients and to provide them the products and services they need for their own success, and for them to seize the opportunities that policy developments are allowing. Oftentimes when there's a particularly complex policy issue, we can collaborate with our peers in the industry, sometimes even clients, and express the impacts to policymakers. And when there's a really significant change in the industry can speak with a unified voice, that often will advance the policies that are best for our clients.
JB: In terms of how we engage with regulators, generally, the first step for us as State Street and State Street Global Advisors is to engage directly with the regulators as they come into place here. And we've done that already with the Trump administration. We're doing that in Brussels as well as leadership changes. We did that in the U.K. We're doing that in all these jurisdictions as the political and regulatory leadership change. So the first thing that we do is kind of evaluate what serves best for State Street and its clients, and we go and talk directly to the regulators about that. Right. But that's only one piece of how we do this, right? The other piece, you know, we spend a lot of time with our peers and competitors and clients and trade associations. You know, there's a couple of very well-known ones in the banking side, the, you know, the asset management side, the security side. So we spend a lot of time working through them because, you know, they tend to have, the technical expertise that's needed to develop fairly detailed proposals that the regulators can then adopt. Right. It's kind of beyond the resources of just one firm sometimes to kind of put this together. And they also bring their kind of the heft of the industry to it. Right. If you can kind of reach consensus in the industry on what should be done, either to support or oppose a new policy, depending on what it might be, that brings a lot to the table here. I think State Street has the benefit in a way of being, you know, many ways, more aligned in some ways on the policy side with our competitors in the asset management space, because we have State Street Global Advisors. The industry working together on things certainly has a big advantage. And that's true, both in Washington, DC, but it's true in Brussels as well, in London and Hong Kong and all these places. The collaboration that we do with our, competitors, peers and clients is what really kind of pushes things over the finish line.
CR: As new administrations come into office, we at State Street engage with them closely. We are able to, from our unique perspective, share the global, national and state and local impacts of policies they may be considering. We can also share how those impacts may affect financial markets and our clients. So we can take the information that we learned through that collaboration with policymakers and bring it back and anticipate what our client needs will be, and develop the products and solutions that our clients need to both adapt to this environment and to take advantage of the opportunities that a change in administration may bring up.
JB: Think of how are you going to communicate your priorities to new administrations, you know, there's a couple of things to do. The first thing is, you really need, things take a personal touch in many cases, right. It's really a matter of getting to know the know people, trying to figure out who's doing what in the new kind of administration, whether it's to, regardless of the jurisdiction here, and making sure that we have the right personal contacts from the CEO level all the way down to, you know, my team. I have a team of people that operate around the world and are in constant contact with regulators and people, you know, coming as they are incoming. We're still at early stages with the new Trump administration and with some of the new leadership in some, in other jurisdictions as well. After that, it becomes a bit of a more formal process where you end up writing comment letters to them, or you go and, you know, you might testify at a hearing that they're holding or something like that. That's where you spell out in much more detail the technical aspects of what you're looking for here. Right? Because what they really need, you know, you can have conversations, the conversations are usually more about, you know, what's good for our clients or what's good for the markets or how this would affect our business. Right. Kind of more conceptual, business driven, commercial kind of concerns here. What they really need, though, also is detailed, you know, they need to know of a particular rule, what words in the rules should be changed. Right. And so that's not the kind of thing you do in like a casual conversation. That's what you put in writing and send to them in terms of actual proposals. And we tend to do that in comment letters, testimony, joint submissions from the trade groups. Sometimes we'll organize, sort of a joint letter from all the custody banks together, for example, on a custody issue. And so, multiple levels there. And the other piece of it is, you have to, I think be perceived by the regulators as someone that, you know, when they have a thorny problem can help you. Right? So you want to have the kind of relationship where you bring to the table, you know, creative thoughts, rational thoughts that might be useful to them so that when something else pops up. Right? I mean, I think that, you know, a place like State Street, we spend so much time with the regulators on things like exchange traded funds, ETFs, when they're thinking of something new on exchange traded funds, they call us. Right. And some of the some of our competitors as well. And so building strong relationships and having a reputation to be someone that can be helpful, not always pitching our own book, but just helpful to the industry or gets the job done here.
