I don’t understand how rate cuts can cure one of coronavirus.
I think that the markets were off afterwards, indicating that the attempt to stimulate an economy in the context of supply chains that aren’t functioning and people who don’t want to get on airplanes or are really quasi-panicked... The US Fed used their power to basically engender confidence. On the other hand, when you lower interest rates, you make it more difficult for financial institutions and so it was an attempt at providing an underpinning of confidence, which, at least yesterday, didn’t work. Markets were down the same as if it never happened.
Thoughts on the impact of the virus...
I think there’s little doubt that there will be a significant impact on global growth. The question is how long it will continue and there doesn’t appear to be any short-term cure. There may be some existing medicines that have some impact, but almost all experts that we consult say it would be between a year and a year-and-a-quarter before a vaccine is developed. Assuming that those experts are right, then we have a problem for a limited period and the only question is how deeply does it affect the global economy? Nobody controls the population’s response in each country and so in a way it is difficult to assess how long it will panic and how deep this will drive global growth. If it drives countries into recession then it’s not so easy to get out, so it’s really an unknown economically, except there’s not much of a positive spin.
What is your take on the rise of populism around the world?
In terms of our business, one thing that is changing is that people in large companies
are being asked to join the political dialog, which wasn’t the case and you cannot comment on every issue otherwise you’d become nothing but the bad TV commentator. But it’s important that business people take a stand because it reflects the value of the people who work for you and the stand you take so that’s a big change. We have to make sure that everyone in society has the chance to do well. The outcomes of the financial crisis have affected politics in the developed world and there is an enormous move for climate change, gender equality and all kinds of things that warrant more today than 15 years ago.
What’s the secret to building a great company?
It’s all about culture. It’s a great place where everybody is honest and helpful and trust each other. We’ve all also worked with people who are nasty and those places do not tend to endure so the key is how do you get any organisation feeling small and intimate, where everyone’s dreams can be met where you’re responsible and people are excited to come to work and feel empowered. In the finance industry I’ve never seen any bigger egos other than the entertainment business and so everyone thinks they’re important. The people who work for us are super smart, everyone is smarter than me — we take 6/10 of a per cent of people who apply to us, so we hire 88 out of 22,000 people. Those who join are really bright. The way to do it is create a whole series of basic principles that have to be taught to everyone in the organisation and create an enduring institution. If I’m not around, the business will go on without pausing for one second.