June 9, 2023 • 59 mins
There have been many priceless moments during the years that I have been doing this podcast. I have talked with so many amazing people and learned so much from their journeys, and studies, and expertise. It is the wonder and beauty of being a life long learner that keeps me going in the face of the challenges we face in our modern world. My guest for this episode stands out as one of the most fascinating people I have ever talked with in my life. He is SO SMART and yet so willing to graciously share his knowledge that you never feel that he knows he is smart. We engaged in a conversation spanning continents, industries, and thought-provoking topics. Join me as I chat with global thought leader Emmanuel Daniel, whose insights will redefine how you think about the world around us. From his exposure to British colonial history to the admiration for penguins on the seventh continent, Emmanuel's unique perspective is sure to captivate your curiosity.
Discover how personalization and individualism shape our lives, including our understanding of God and the role of technology in the banking and finance industry. As we explore the concept of the 'sovereign self' and the ongoing evolution of innovation, you'll gain a new perspective on the future of banking and the impact of personalization on the way we live and interact with the world.
Don't miss this fascinating conversation with Emmanuel Daniel. By the end of our journey, you'll have been transported through his upbringing in Kuala Lumpur and Singapore, marveled at the beauty of migratory birds, and reflected on the importance of personalization in every aspect of our lives. So come along, and let's uncover new ways of thinking about the world we live in.
Thanks for listening. Please check out our website at www.forsauk.com to hear great conversations on topics that need to be talked about. In these times of intense polarization we all need to find time to expand our Frame of Reference.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:04):
Welcome to Frame of Reference informed, intelligent
conversations about the issuesand challenges facing everyone
in today's world.
In-depth interviews with SalkCounty's leaders and
professionals to help you expandand inform your Frame of
Reference Brought to you by theMAX FM Digital Network.
Now here's your host, raulLabresch.
Speaker 2 (00:25):
Well, welcome everyone to another episode of
Frame of Reference Salk Countyand beyond.
And, as you've, if you've beenlistening lately, you know that
we've gone way beyond SalkCounty, which, when this podcast
started, i was trying to talkwith leaders in our local
communities to talk aboutsubjects as broad as art and
education and economicdevelopment.
(00:45):
So, and in some ways, i look atthat now and think of it as
being a preparation time to talkwith guests like the one I have
today.
I am sitting across from avideo screen to someone who is
actually in Dubai right now aswe record this, which is a
wonderful thing that technologyhas allowed us to do.
He is a man that I have come toadmire greatly just in the few
(01:09):
days that I've had since I foundout about him.
Really literally, the peoplethat I work with at Commander
Brand suggested that I mighthave him on as a guest, and the
more I read about him, the moreI thought oh my God, why does
this man want to take time totalk with me?
And it's just wonderful.
His name is Emmanuel Daniel,and Emmanuel is a referred to as
(01:31):
a global thought leader, sothat is one of the terminology
or one of the monikers that hasbeen assigned to him And I'm
intrigued by that alone, but itjust it tells you something
about the range of our guestslately.
So I am extremely excited, mrEmmanuel, mr Daniel, sorry
Emmanuel, i'm just so pleased tohave you on the show with me
(01:54):
And thank you so much for takingthe time out of your very busy
schedule to do that.
Speaker 3 (02:00):
Even before we started, we were already rolling
, so let's keep rolling.
Speaker 2 (02:04):
Yes, we've been having a talk about everything
from the state of China to themonetization of America and the
chaos that resides here, Soperhaps I'll be able to edit
that into something that we canshare with people as well.
But, Emmanuel, as you know oneof the things in my spec sheet I
hope you had a chance to lookat it I like to try to start out
(02:25):
with something called myfavorite things.
It is a gestaltian period ofthe show where we give people
that are listening anopportunity to know something
about you as a human, which Ithink a lot of shows
unfortunately don't have a lotof time to do that, But as much
as you have expressed already,you're interested in getting to
know people and hearing from thecommon folk.
(02:45):
If you will, I'm interested inthe same thing, and I know our
listeners are as well.
So, without further ado, thisis gestaltian.
Wherever it goes, It goes.
Please try to go with the firstthing that comes to the top of
your mind.
But I will ask let's start outwith something perhaps a little
arcane What is your favoritebird?
(03:05):
Emmanuel?
You have a favorite bird.
Speaker 3 (03:10):
Oh, that's a curveball.
Favorite bird, more recently itwas penguins, right, because I
finally stepped on the seventhcontinent and I took a selfie of
myself saying this is it, i'vereached the seventh continent.
And then they made me memorizeall the three species of
(03:31):
penguins that were on theAntarctic.
So I took some things tounderstand penguins how they
look after the young, how theymade all of that.
So it's not necessarily myfavorite bird, but it's the bird
that's got my attention for awhile.
(03:52):
I grew up in Southeast Asia andsomething I learned over time
was that how Southeast Asia wasactually the transshipment point
of birds that migrate from thenorth pole to the south pole six
months in a year and then doexactly the same journey back
(04:13):
the other six months in a year.
Now I can't remember the namesof some of these birds, but if I
looked up a reference book I'llprobably remember them.
But I'll go to places likeTasmania and stand there and
then they will name those birdsand I've seen them in Malaysia
before.
And these are tiny little birdsthat make that journey six
(04:35):
months in a year.
And the way in which thedifferent species make those
journeys.
Some of them are solo, theyactually fly alone, and some
they fly on the back of eachother's wings.
So that's as much as I knowabout birds.
Speaker 2 (04:52):
No, that's fine.
Well, and penguins are.
I'm sure there are peoplelistening right now that love
penguins, so you've justingratiated yourself to penguin
lovers.
They look like they're wearingtuxedos all the time.
How can that not be enjoyable?
All right, so, and actually Iwas thinking you were born in
Kuala Lumpur, right?
(05:13):
Am I remembering that?
Speaker 3 (05:16):
Yes, and then I, right after college, or rather
in four college, i went toSingapore, which is actually
right next to Malaysia.
These two countries were onceone country and they have a
shared history.
We were both part of theBritish colony.
My mother cries when the queenspeaks because her father was a
(05:38):
high ranking official during thecolonial period.
We all learned our English fromthe British after colonialism,
whoever remained as pastors, aspriests and as teachers.
So we share that colonialhistory.
(05:58):
So when I go to a country likethe UK I feel right at home
because we learn the same poetry, the nursery rhymes stuff like
that.
Interesting.
And the interesting thing isthat today when I tell people
I'm from Singapore, becauseSingapore is 75% ethnic Chinese,
so everybody thinks thatSingapore is Chinese.
(06:22):
So I always get asked thesequestions where are you from
originally?
And then I tell them I'm fromMalaysia, or rather I was born
in Malaysia, and then they sayoh, and then I'm thinking what
do you think Malaysia is?
And it's actually the sameracial composition as Singapore.
In both countries I'm 10% ofthe population.
(06:44):
I know my ethnic group, so I'ma minority in both countries,
and an important minority,because all of us, the different
ethnic groups, contributed tothe growth of both of these
countries.
So today when I meet anAmerican I will say where are
you from?
(07:04):
And he will tell me in Ohio orin Canton, ohio or something.
And I said where are you fromoriginally?
Because you don't look NativeAmerican to me.
So I have that identity problem,and what's interesting is that
because I grew up with Chinesepeople, as my neighbors in my
family, we intermarried quitewell and so on.
(07:29):
When I went to China in the year2000 to start my business there
, i was very familiar with theChinese people already A
backstory there.
I started a business called theAsian Banker in 1996.
After, you know, i graduated asa lawyer, but then I spent 10
(07:50):
years trying to figure out whatI wanted to do And I thought the
publication business is a goodway to get to know people and
doing it cross-border gives mean excuse to travel.
And I also thought that thebanking industry why the banking
industry and not something else?
I would have liked to dopolitics, but politics would
have gotten me to jail in manyof the countries in Asia at that
(08:11):
time.
So the next largest industrythat pays the bills was banking,
and banking was also big enoughto.
I call banking a cathedralindustry in that it encompasses
all of life, from cradle tograve.
When you land in any country,if you met the top bankers, you
(08:33):
practically met everyone who'simportant.
So that's why I went intobanking, and now it's been 29
years or so And that gave me anexcuse for with the name the
Asian Banker, i was able totravel all across Asia and I
would land up in a country and Iwould say I'm from the Asian
(08:55):
Banker and they say, oh yes,we've heard of the Asian Banker,
because the name just sounds sopompous that everybody imagine
the day they knew that And inthe year 2000, the chairman of
the largest bank in China, icbc,mr Zhang Zhang Jin, came to
Singapore and insisted on havinglunch with me.
I was running a conference atthat time and I had to take time
(09:18):
out to have lunch with him, notrealizing that China had, at
that time, made that decision tojoin the WTO and to put its
largest banks on the globalcapital market to raise capital
and to build its globalframework.
(09:38):
And I was one of the peoplethat he took pains to have lunch
with me in Singapore.
And at that time I said to himthat we had just started our
business in Shanghai and he'sShanghaiese.
And then he said to me no, no,you come to Beijing.
You want to be serious aboutChina, you come to Beijing.
So because of him, i moved thebusiness from Shanghai to
(10:01):
Beijing, and it was a veryimportant decision because the
government is in Beijing Andeventually we became the best of
friends He's now retired, he'sstill good friends, and that
started my journey of meeting alot of the decision makers in
China at a time when they werecourting any overseas
(10:22):
personality they could find.
And what was really nice A nicestory of my own personal career
is this When I went to Japan,japan wasn't interested in the
Asian banker because Japan'sbanking industry was opposed to
World War II American creation.
(10:43):
If you're not from America, wedon't know why you're important
to us.
And I wasn't there in 1945 whenJapan was just starting out
after having needed to bere-applicated and all that.
But I was there when China wasstarting out in 2000.
And if you took a snapshot ofthe development of the Chinese
(11:07):
banking industry, you will seemy picture in there, because
I've had the opportunity to meeta lot of the key people.
One of my great stars, over andabove Ben Benanke or Alan
Greenspan, is Joe Sautuan, who Ithought was a tall man.
(11:30):
He's a northern Chinese, hespeaks English perfectly.
You can see him at the IMFmeeting in the corridor with Ben
Benanke as a friend.
He could carry his weight inWestern society as much as in
Chinese society And he oversawthe development of the world's
(11:51):
largest country into the marketeconomy.
For me it was like meetingAbraham Lincoln almost, for a
man who made such an incredibledifference to an entire economy.
So there were those momentswhere I thought that it really
was very fulfilling for me.
And of course, china is goingthrough its iterations right now
(12:14):
.
There's a lot of question onthe current president, xi
Jinping, and so on, and I havemy views on those.
But having that front seat viewand having many Chinese
officials as personal friends isAnd if you will notice my book,
(12:34):
the forward was written byformer congressman Barney Frank
Yeah, yeah, and so here's thedeal with my friendships in the
US, right?
So something like Barney Frank,if I was American, i would have
to take a number and weight in aqueue of the American
(12:56):
journalists and people who wantto meet him.
But because I'm from Asia andBarney Frank wanted to come to
Asia and see parts of Asia andaccepted our invitation to speak
at our conferences and so on, ihave him all to myself for
three weeks.
So that's how the friendshipswith some of the key people in
(13:18):
the US developed.
Another person who is a verydear friend is Dick Kovosovic,
the former chairman of WellsFargo.
Yeah, I read about him a bitYeah.
And I have my version of whatwent wrong with Wells Fargo and
the Wells Fargo that Dick built,because I have very great
(13:39):
respect for Dick.
But obviously he set in placecertain cultural things in the
Wells Fargo way of running itsbusiness which should have had
more structural checks andbalances in the system, which he
(14:00):
didn't have, and he was themost heartbroken when Wells
Fargo went down.
So these are people who arepersonal to me And so from a
tiny outpost in Southeast Asia,i've had the opportunity to
interact with some of the mostamazing personalities around the
(14:22):
world And I rememberconversations like Sir George
Matthewson, who was the chairmanof RBS at the time, right after
he actually handed it over tohis successor, who tried to make
that deal with ABN Emerald tobuy the retail business of ABN
(14:45):
Emerald, and RBS was justgrowing out of proportion.
And here I was in Beijing withGeorge Matthewson walking down
the financial street on a quietevening And I asked him this
question how big can a bankbecome?
And he looked at me and he saysI don't understand this
(15:06):
question.
He didn't say I didn'tunderstand the question, he just
looked at me and he showed itas if he didn't understand the
question And for me it was likewhen you have a successful run
as a chairman or a CEO, you dolose perspective, dimension of
what's sustainable And, as itturned out, eventually that
(15:29):
whole deal unraveled and thesuccessor was pillared and
vilified and so on.
So I mean, i'm just throwing inthe experiences that I've had
that have given me a front seatview of the future of finance,
which is why I'm able to writethe book that I did.
Speaker 2 (15:51):
Well, i think listening to your answer to that
question explains now what aglobal thought leader is, or how
, at least, a global thoughtleader becomes a global thought
leader.
It also explains just how farour conversation can go from the
discussion of what yourfavorite bird is.
So let's remember that.
So what another favorite?
What is your favorite kind ofmusic to listen to?
Speaker 3 (16:14):
I'm glad you asked that, because when I catch on a
general I tend to stick on itfor a while.
So until recently it was Queen,it was Freddie Mercury, all
that stuff.
Speaker 2 (16:32):
Arrowsmiths follow the classics, that kind of thing
.
So yeah.
And.
Speaker 3 (16:40):
Elton John, that genre.
Speaker 2 (16:41):
The Who.
Speaker 3 (16:42):
Maybe the Who Were you listening to the Who at all,
so right, okay, good, butrecently I listened to someone
called Christopher Tin And man,he's captured my imagination.
He actually started live, andthat's world music, by the way.
(17:04):
So Christopher Tin is acomposer, come orchestra
conductor, right, and he startedlive, live from California.
After college, his friends whostarted a gaming platform asked
him to write the musical scorefor a gaming platform Then this
is in the early 2000s and he did, and then the first of his
(17:28):
songs became very, verysuccessful.
I only discovered him recentlyand I'm now listening to all
these major songs.
You must listen to ChristopherTin, christopher Tin, and there
are two songs especially thatare incredibly infectious,
meaning that you can listen toit many times in a day.
(17:49):
And then there are others whichhe's now going into more nature
and sustainability themes, andone song is in a Ghanaian tribal
language about the rain Walo yoalo ma, something like that.
And the other one is the Lord'sPrayer in Suhaili And man.
(18:19):
This man put together thevarious cultures and gave it a
European symphonic orchestratreatment to carry the music.
So now African music is globalbecause of the treatment that
he's given it.
So now.
I'm hooked on him.
every time I get a chance Ilisten to his music So I move
(18:43):
from general to general.
So in my youth I was KarenCarpenter and all that stuff.
So I evolved over time.
Speaker 2 (18:52):
You need a jazz period.
Speaker 3 (18:54):
If you haven't listened to jazz yet, make sure
you have, And I have a big jazzband too.
Speaker 2 (19:00):
That's perpetual.
So Coltrane, phil Woods,everyone along that spectrum,
spirogyra even, that's fine,easy one and perhaps revealing
Favorite color.
Speaker 3 (19:15):
This is a very, very good question.
My favorite color is supposedto be red, but everything I wear
is blue.
So in my head, my favoritecolor is red, but in my real
life, all my colors.
You take me to a store.
I always pick up the blue shirt.
(19:37):
So that's me.
Speaker 2 (19:41):
So you have a kind of a warring factionalization
within your own personalitythere No, i'm a red, no, no, no,
you're a blue.
Speaker 3 (19:49):
And then when I was in school, very interestingly, i
was put in yellow house.
I mean, it's all for you, right?
And for all the time I was inprimary school I was never
comfortable with that.
I never came to terms with thefact that I was in yellow house.
(20:09):
So I have a big battle in myhead about colors with that one.
Speaker 2 (20:15):
But in yellow and blue combined we will make green
, and green is a very big partof your life right now, so in a
figurative way at least.
So I'm not sure how much of ityou're dealing out yourself, but
certainly you have familiaritywith green, although European
Asian currencies are all muchdifferent than our green bills
(20:35):
here in the US.
Do you have a?
I try to kind of finish up withmy quick favorites, but this is
one that I find I really enjoyhearing people's answers to, and
that's do you have a favoriteplace that you like to go to or
a favorite thing that you liketo do when you need to or just
(21:00):
feel a yearning to do, and evenwhen you need to go to that
place and cannot that?
if you find something thatreminds you of that place,
reminds you of that time, thatit centers you again, that it
brings a comfort, it brings asense of that's who I am, and I
(21:20):
find that there are places thatpeople can remember times in
their lives that they canremember their mom baking bread.
I mean there are so manydifferent things there that I'm
just curious do you have a thinglike that in your life, or a
memory like that?
Speaker 3 (21:35):
A memory and I guess we played all the time is that I
like cycling towards themountain, thank you.
And that's because when I wasgrowing up in Kuala Lumpur Kuala
Lumpur is actually in a valleyand it's surrounded by the
mountain range, And one of themountain range on the top of it
(21:55):
is a casino called GantingIslands, and it's still there
today.
But when I was growing up therewere no buildings.
Where I was growing up, in fact, right at the edge of the
housing estate in which I lived,was a disused tin mine, so it
was for miles.
It was actually wasteland withgrass on it, but it used to be a
(22:18):
tin mine, so it was actuallyclear land.
And from there I would actuallygo cycling with someone who was
my dearest friend to this day.
I grew up with it.
He's Chinese, ethnic Chinese,but his name is Chu Chongkyeong
and we were classmates.
We were the same age.
So I would take my bicycle frommy house and then I'll cycle to
(22:40):
his house and then we'll calleach other out and then we will
both cycle towards that disusedtin mine And then we would stand
at the edge of that and look atthe mountain range into the
evening until it became dark Andyou can see the light of the
casino on the top of themountain and we will be talking
about everything under the sun,about every place we wanted to
(23:03):
go.
We would be talking geopoliticsof the 1970s and so on, and
then, now that we're adults, chuChongkyeong eventually migrated
to Canada with his family, sohe now lived in Calgary and I've
(23:25):
now been to 111 countries andthese are the things we were
talking about as kids And tothis day, even where I live in
Singapore.
I live in an island which is onthe upper end of the spectrum,
but the reason I live there isbecause it's low density and I
(23:48):
can actually go for huge longwalks, like maybe 15 kilometers
I don't know what that is, butyou know and so on.
So you know about 10 miles orsomething like that And 10 miles
of walking.
You know, give me that anytime,and so I look out for places
like this to stay, to live, tomeditate.
(24:10):
You know, the funny thing isthat I am a very gregarious
person.
When I travel, i always makesure I extend myself to others.
I do several things.
I make sure I don't wear darkclothes, because I realized that
when I wear dark clothes peoplefind me not easy to relate to,
(24:33):
okay, for whatever reason.
So I always wear pastel colorswhen I travel, so that you know
and I always smile, you know,and I always make eye contact.
So I'm actually gregarious, butI'm also my very own best friend
.
People don't see this, but mybest moments are with myself,
(24:56):
and you know, i have no problemswith being alone for days, you
know, and at the same time beinggregarious.
So it's something that there'stwo sides to me that I totally
enjoy, and the thing about beingon your own is that that's
(25:16):
where I get my energy.
I grew up as a Christian, so alot of that had to do with, you
know, being at peace with Godand so on.
But my idea of God has changeddramatically.
I don't think of God as a whiteman with a beard and with a
personality and an attitude andall that.
Sorry, you know, i don't buythat anymore.
(25:37):
In fact, the more I understandabout the universe and how huge
it is and all the issues, allthe factors that define it, i
like to think of God as a forcethat we need to be at peace with
, and so these moments alonehelp me to come to terms with me
(26:01):
and the universe.
You know, don't cause trouble,just be at peace with it.
Speaker 2 (26:06):
Interesting.
Yeah, i can totally concur withyour concept of It's an
interesting.
My walk with God has been muchmore of an understanding of the
broad range of God.
You know that we try toconceptualize Him as just, you
(26:26):
know, a very finite thing,because that's the, i think, in
most minds.
That's the easiest way tocomprehend something of God.
And yet when you think of Godbeing, you know, the creator of
everything and I believe in anintelligent design there as well
that to me is so fascinatingthat it's not only that
awareness of Him as that sort offorce, but also the awareness
(26:49):
of Him is personal touch uponeach of us, which actually kind
of leads in to the thoughtframework of your book that I
just started reading, called TheGreat Translation.
The Personalization of FinanceIs Here, and when I first saw
that title and first began toread it, one of the things that
(27:11):
touched me right away was yourquotes at the beginning of
chapters are, you know,everything from European
classics to contemporaryBroadway, you know, and that, to
me, always that's the type ofauthor that I gravitate to,
because it tells me somethingabout the broad range of their
thoughts but also gives me a wayto you know, grasp right away
(27:36):
what the central core of thatchapter is going to be.
So, and I also thought about,well, personalization, are we
talking about individualism,which right now, you know,
frankly, in the US, thatindividualization and you know,
collectivization of individualsthat all believe the same way, i
(27:56):
find very factionalizing, iguess, or very disruptive.
And yet, as you pointed outbefore we even started recording
, that disruption in America is.
We should be very used to it bynow because it's our history.
You know the George Floyd event.
You know now, i believe, asyou've even talked about back in
(28:19):
the 60s and 70s, it'sinteresting to me that the LGBTQ
plus movement has become muchmore prevalent As a result, i
think, of the George Floyd, youknow, situation opened up a
Pandora's Box, if you will, orat least an awareness that well,
hey, wait a minute, it's notjust this problem.
It's this problem too, andthat's very good in a lot of
(28:45):
ways, but it's usually not verygood when you're in the midst of
it.
You know it can be verytumultuous, and it seems to me
that that's kind of what you'reseeing happening in the banking
industry, which is the primaryarea that you're exercising your
individuality right is to seethis thing and try to bring some
sense to it through the sensethat you're making of it
(29:07):
yourself.
And I found actually I shouldtell you too I found it
interesting that you were drawnto politics and realized that
that was something that wasperhaps too dangerous to be in,
very risk-oriented, at least inChina at that point.
And yet now you're in bankingand finances, which is arguably
also a very risk-orientedbusiness.
So just, they don't put you injail for it, unless, of course,
(29:29):
you do.
You know horrible things withthose finances that people
naughty naughty you know shouldnot be doing.
But what led you to that?
What happened that brought youin?
Well, let's back up too.
What is your definition of thepersonalization of banking that
is happening right now?
Can we put that into aframework that most people would
(29:51):
understand?
Speaker 3 (29:53):
Yeah, if you look at the cover of my book, there's a
picture of an ice cube.
So let's talk aboutpersonalization on two fronts,
right?
One is the personalization offinance.
In order to help peopleunderstand it And you don't need
to be a finance person tounderstand it If you think of
ice, it used to be cut out of,so on out of the lakes in
(30:17):
Michigan, in Boston, put onhorse-drawn carriages, sent to
New York where it finds its wayinto, you know, a glass gin and
tonic or something Right, andthink about how wasteful that
was and how unproductive it wasto transport ice that way.
Banking today is exactly that.
(30:37):
The money that is in yourpocket would have swore around
the world twice, being subjectto exchange rate, interest rate,
bank charges, security costs,holding costs, you know, and all
kinds of things.
In other words, you're not atall in control of the value of
the money that you carry.
Okay, now, we are now enteringa phase, because of
(31:00):
cryptocurrencies andtokenization, that it is already
possible.
It's a reality that you and Ican transact with each other
without having an intermediary.
We don't need a banking system.
We can transact with each otherimmediately, directly.
And not only that everybody you, me.
(31:22):
Anyone can design and issue ourown tokens, and that's
something that people don'trealize.
They think that tokens can onlybe issued by smart people or
financial institutions somethinglike that Now the only thing
that's left to do is that if youissue the token, you just want
to make sure that people want toaccept it and transact with it
(31:46):
and recognize its value.
So now, what made thedifference with ICE?
It was a chemical.
It's a synthetic chemicalcalled chlorofluorocarbate, cfc,
and what's going to make adifference in the
personalization of finance.
So I set out to look for theelements that will personalize
(32:08):
finance.
So the chlorofluorocarbate offinance is what I consider to be
identity, value, verificationand data and information.
Okay, i mean, that's all verytechnical, but basically, if
banking solves these fourproblems, we can all be able to
(32:28):
transact with each otherdirectly.
We don't need intermediaries.
But the way that the history ofeconomics evolves, there will
always be an intermediary.
There will always be somebodywho wants to make money by being
an intermediary of sorts, andit can be an intermediary of the
value, of the identity, of theverification process, of the
(32:49):
data that's being transmitted,and businesses will change.
So what happened to the ICEmerchants?
They ended up sellingrefrigerators, that kind of
thing.
Now, if we as individuals arecapable of transacting more and
more directly with each other,then finance doesn't become the
(33:13):
defining industry in economics.
It becomes an enabling industrythat enables people to get to
do what they want to do.
Nobody wanted a mortgage,people want a home.
Nobody wants an automobile loan, people want a sports car, that
kind of thing.
So now the thing is thatthere's a huge battle underway
(33:36):
where the intermediaries arecontinuing to try and retain
their agency, their role, andthe regulators are also afraid
of making any transitionsbecause there's a whole range of
fraud that is already underway,it stands in the way, and so on
(33:57):
, and the regulators owe it tosociety to moderate the process.
So the book is for people intraditional banking and how they
are going to make thattransition and how they're going
to redefine banks as they gothrough this transition.
(34:20):
And And the thing is that afterI wrote that book, just as he
was going to print, i had givenit to a few friends to review it
, and one of my dearest friendspopped up a book that he had
read earlier called TheSovereign Self.
Okay, you need to look that up.
And The Sovereign Self had theauthors I forget their name now,
(34:45):
but they had written a booksaying that US as a society was
becoming increasinglyindividualistic, people are
being empowered by access toinformation and so on, and the
individual is becoming importantAnd I was just going to print
(35:05):
that way at that time.
So I flipped through the bookquite quickly and I said is
there any overlap or somethinglike that?
We are both parallel books.
So I was intrigued that I wasnot the only one thinking about
the idea of the sovereign self,but from a finance perspective,
(35:28):
And they had no financeperspective in the book at all.
Now, the idea of individualismand individuality I'm not sure
what the phrase should be insociety.
Now I've dealt with it as afinancial concept in banking.
Just one other point is thiswhenever I say the
(35:51):
personalization of finance,every banker imagines he
understands what it means.
He thinks that personalizationof finance is providing such a
personalized service to thecustomer that you love your bank
for it, where you can package amortgage and put it in a ribbon
bound wrapping and give it tohim as a gift And you think that
(36:16):
the bank loves me very much.
Speaker 2 (36:18):
In red.
He'd give it to you, a red box.
For you, it's a box.
Speaker 3 (36:25):
So bankers need to be taught that personalization
means you don't exist anymore,you're not part of the story
anymore.
Speaker 2 (36:32):
You're a data point.
Speaker 3 (36:33):
That's what the you know, And so that's one
misconception that I have tokeep explaining to traditional
bankers who, the moment you saythe personalization of finance,
they imagine they understandthat.
But there's anotherpersonalization that is so
important and so fundamental,and actually this is the subject
(36:54):
of my next book, which I called, you know, which I've entitled
the winning civilization, aboutcountries that define the future
and societies that define thefuture.
So the theory I have is thisthat you know, when civilization
post Bronze Age, you know,bronze Age ended about 1170 BC
(37:21):
And then we, you know, then wemoved into the Roman Empire
period and so on, as long ascivilization was predicated in
the Mediterranean region, it wasincredibly communal.
You know, the Jewish culturewas communal, the Egyptians were
communal, the Greeks werecommunal, the Roman society was
(37:44):
originally very communal, and soon.
But the more north it moved,when it moved to Germany, you
know, and then further up northnorthern Europe, it became
incredibly increasinglypersonalized.
You know, there were theCalvinists who preached or
taught that religion is apersonal relationship with God,
(38:08):
and then there was Martin Lutherwho put that 99th thesis on the
door, saying that you know thatthe church, you know that
religion, again, is a personalrelationship with God.
The church shouldn't be, youknow, claiming peace and all
that.
(38:28):
And then it went up north And bythe time it reached north the
Scandinavian countries and alsothe Netherlands and so on it had
reached a high level ofpersonalization, you know, and
the protestant movementemphasized personalized religion
And the English exported itglobally.
(38:51):
And I call the Americans likethe descendants of the
personalization of religion, youknow, and in the period of the
Calvinists the idea ofpersonalization is personal
accountability, but by the timeit reaches the US, where it is
today, it's actually personalgratification, you know.
(39:12):
So you've seen how thepersonalization of society, of
the individual, had evolved overtime, you know, and into what
America is today.
And America is like the lastchild of that journey, you know.
And America is exporting a formof personalization which is
(39:34):
actually predicated ongratification and consumption
rather than personalresponsibility, you know.
And that, coupled withinformation, where information,
you know, it, empowers theindividual even more to be even
more personalized.
And if you, if you then add thepersonalization of finance,
(39:58):
where you don't needintermediaries and institutions,
that people increasingly dealdirectly with each other, you
actually have society that isevolving so dramatically that it
really needs new institutionsand new structures to hold it
together.
The existing structure justdoesn't hold, doesn't carry
(40:22):
society, and I think that'swhere we are today.
Speaker 2 (40:25):
Well, that opens up to me, boy, in a just a miasma,
i guess, of potential issues,one of which is just the
responsibility.
You touched on that.
You know, in America we're veryadamant about our rights.
I have a right to this, i havea right to that.
I have a right to free speech,i have the right to own my own
(40:47):
guns.
And where we seem to alwaysmiss the boat in my mind is but
with each of those rights comesa responsibility you know with,
with the right to representpeople, as our Congress is right
now, the legislature isrepresenting us right now in the
potential default on our debt.
It strikes me that one of thethings they are forgetting or
(41:10):
trying to use as a bargainingcard is their right to insist on
their agenda And withoutrecognizing and really saying
but we're also responsible forthe financial well being of our
people and our economy and theworld's economy.
So to behave so irresponsiblyis just an abysmal way of being.
(41:33):
So.
The personalization appeals tome from the standpoint of
perhaps, just perhaps, we cantake away some of that power to
cause chaos and, to you know,enlist people in the fear of the
day club Instead of you know.
Instead of that, we can chooseto say whoa, whoa, wait a minute
.
You know, children, children,let's, let's behave for a moment
(41:56):
here, let's stop the smoke andmirrors and let's just try to
deal with things.
The other, the other point thatstrikes me is, as you talk about
this personalization, do yousee, i wonder, the existing
structures, the existing bankingculture and structure,
financial structures that are inplace?
Thank you.
Just as the oil industry isresistant to renewable energy
(42:20):
sources, how do you see theresistance of the existing
banking structures, financialstructures resisting to this
personalization?
Because certainly they have alot to lose.
The power brokers within thatculture have a ton to lose And
they have the power.
One of the things that I'vealways worried about with
cryptocurrencies, for example,is that the people behind the
(42:41):
scenes they can say, oh, that'svery nice, play with that people
, that's just fine, you go aheadand play with your
cryptocurrency, but they'rereally pulling the strings on it
all.
Is there a best strategy forthat transition or are we going
to have to just make it up as wego along?
Speaker 3 (43:01):
The US is a laggard in the very technologies that it
has created itself.
If you want to see the futureof finance, you need to go to
Africa, where the paymentsindustry has now been
revolutionized by any number oftechnology companies that are
(43:21):
able to transact money acrossseveral borders in Africa on the
back of a message, of a textmessage.
Now just think about this Ifmoney is information and if
information can be transmittedfor free, money can be
transmitted for free.
So the technology exists foryou and I to transact with each
(43:44):
other on the back of a WhatsAppmessage.
So the only reason we're notdoing it is because WhatsApp
itself doesn't want to providean infrastructure, because it's
afraid of getting intoregulatory problems in several
countries.
But there are WhatsApp paymentsinitiatives in India and Brazil
(44:05):
already, so the innovations aretaking place outside of the US.
China started off by puttingpayments on its super apps, and
then India started, went on tocreate identities from which you
can make payments to anybody onany platform, so it's a little
(44:28):
bit different from the Chinesemodel.
So today in the US, the Fed isabout to introduce something
called FedNow, which is aninstant payment infrastructure,
and the distractions that I'mreading about people were
claiming that FedNow is aprecursor to the CBDC in the US,
which is totally not true.
(44:49):
It's very interesting that thepushback, the theories and stuff
like that, the conspiracytheories and all that, and to
think that the US is the lastcountry to introduce instant
payment.
The UK was the first.
(45:11):
We have that in many SoutheastAsian countries, now South
Africa and so on.
Speaker 2 (45:17):
Well, paypal has been there all along, and yet that
didn't quite get there, did it?
Speaker 3 (45:23):
Yeah, and the back end of PayPal is still the
credit card industry and it'sstill the back end.
So the US is okay with buildingsomething that looks like an
innovation when actually underthe carpet it's still the same
old thing And being the pioneerthat means that credit cards
(45:44):
were invented in 1967 orsomething like that with Visa
and Diners card.
Speaker 2 (45:49):
Bank of America.
Speaker 3 (45:51):
Bank of America and so on, and then they put the
technology behind it.
Now, and during that period,the US was a leader, but from
that period they built anincredible layers of dependence
on the program and beneficiariesthat they can't dismantle it.
(46:11):
So the story I used as anallegory is that of the Codec.
In 1995, codec invented digitalfilm together with some of the
research organizations inCalifornia, and Codec was the
(46:33):
last to make the transition todigital film, and right into the
2000s, you would still seeadvertisements for the 35mm film
.
2001, sony introduced CyberShot, the digital camera.
2007, the iPhone was invented.
And 2010, codec went intoliquidation and bankruptcy.
(46:56):
So now is it possible for banksto go through the same
experience?
Now, that's what I say in mybook.
Somewhere towards the end Isaid if the product doesn't
change, nothing changes Andthat's my clarion call to the
banking industry that you cantalk about innovation for all
(47:18):
you want, but you're actuallyjust circling around your own
label, but if the productdoesn't change, nothing changes.
Now, when I came up with theCodec story, that was 2017.
And then I spent a few yearsthinking what is the most
beloved of the bankingindustry's product, and I
(47:42):
couldn't see it for a while Itwas right in front of me the
deposit business And I finallywrote it down in my book.
I said that the business thatyou need to unravel is the
deposit business And when Iwrote it I was really afraid
because I thought that bankerswould think I'm dumb or an idiot
, because I also come from thebanking industry and I know that
(48:06):
the best run banks are the onesthat are able to gather
deposits in the cheapestpossible form, because that
gives them the margins in orderto lend, and also the customer
base, who are secure, and allthat And one of the best deposit
story banks in the US there wasWerden Hill, someone who ran a
(48:28):
bank share commerce bank thebest story on the deposit
business I could think of.
But then I could see that thedeposit business was being
digitized, that the digitalwallet players were just as
important as traditional banksin the deposit business And the
(48:51):
name of the game was changingfrom net interest margin to
utility.
In other words, i would trustan institution to carry my
deposits if I can use iteffectively, if I can use it to
pay, if I can pay peopleinstantly and increasingly
paying into digital platforms,including gaming and all that,
(49:14):
and the digital wallet businessis growing dramatically, and I
can see that transition goinginto digital tokens eventually.
And so I've made an assertionin my book and even now in this
conversation, that it's notinconceivable that we will come
to a point that when banks willbe the biggest issuers of stable
(49:35):
coins going forward.
Okay, now, the reason I come upwith these lines of thinking is
that I think through thetransitions and I think through
the logical flows, and then Icome to the conclusion that you
know what this is, where it'sheading.
As a futurist, what I do withthat is I test every current
(50:03):
development against the theorythat I've set out for myself.
If it varies or there's anaberration, then if I'm wrong,
I'm willing to accept it.
I'm saying okay, i'm wrong, iwill stand corrected As long as
I haven't been countered.
I don't need to listen to allthe noise that happens in the
(50:23):
industry Today.
There's so much noise in the USthat you cannot figure out
where this is going.
But if you have come to aconclusion that this is where
it's probably heading, youreduce the amount of noise that
you need to pay attention to.
So, like the SEC makegrandstanding on
cryptocurrencies and the Fedissuing papers and so on.
(50:48):
I go back into US history to seehow the US eventually makes
policy, and then I come to thisdramatic realization that the US
never had a financial policy.
It always had it in reaction tosomething.
The reason Bretton Woodshappened in the first place was
(51:13):
to solve some of the problemspost-war Europe.
The reason the Bretton Woodsagreement unraveled in 1971 was
because the US just couldn'thold on to the price of gold and
then floated its currency,despite all of the US most
(51:34):
important economists, andincluding Keynes and some of the
others including Meishez, bythe way were adherents to the
gold standard.
And yet there comes a pointwhere the US just walks away
from it And just extrapolatedinto everything else.
(51:55):
The reason the dollar is theworld's reserve currency is not
because there was a white paperfrom the Fed saying that we want
to make this a global currency.
It's precisely because the USdidn't care what happened to the
dollar outside of the US.
In fact, it didn't even want itto come back.
(52:15):
Today, if you came back fromsomewhere back into the US, the
first question they ask you iswhether you are carrying $10,000
, some more.
And this is from the 1970s,where there were restrictions on
bringing capital back into theUS.
Right.
Speaker 2 (52:34):
So, the point being that we've always been adapting,
and do you see the bankingindustry continuing to adapt or
becoming the ICE company of thefuture?
Is that the prognosis?
Speaker 3 (52:47):
So what I see the banking industry doing is
resisting as far as it can untilit cannot, because there's more
money to be made in thatresisting ultimately, which
would make sense.
And the thing is that sometimeswhen we talk about the banking
industry, we think of it as agiant.
(53:09):
It's like the biggest buildingin town or something.
It no longer is The largestbank in the world the Chinese
bank, icbc or even JP Morgan.
They're like $2 trillion insize, $3 trillion in size.
There are fund managers nowBlackRock, for example, which is
(53:29):
like $10 trillion in size, $11trillion in size, $6 trillion to
$7 trillion in managed funds,and then there's discretionary
funds.
So there are industries, thecorporate lending business.
The commercial banking paper ofthe business is larger than
bank lending, even in the US.
(53:49):
So banking is just one ofseveral financial intermediaries
in the financial infrastructure.
So, and it's shrinking, it'slike the horse drawn carriage.
What I like very much is aphotograph of New York In 1901,
(54:11):
there was like, if you pull outpictures of New York Street in
1901, you would see 200carriages how close one
carriages and one motor vehicle.
And the motor vehicle is a hugenuisance to the street because
it's heavy, it's noisy, itdamages the street, it stumbles
(54:32):
the horses, it's slow and it'scumbersome and all that.
Speaker 2 (54:37):
My mom used to talk about being a kid in Marinette,
Wisconsin, and a car would comedown the street when the kids
were playing in it and the kidswould chase after the car going
get a horse.
So things are always the same,aren't they?
So we ridicule the new thing intown.
Speaker 3 (54:58):
And just in three years by 1903, it was just the
opposite.
It was like 20 cars and threeor four horse drawn carriages.
In the early years of theautomobile vehicle in New York,
all the rules were stacked upagainst the automobile.
It wasn't stacked against thehorse carriages which speaks.
(55:20):
you can drive on how much noiseyou can make, right.
Speaker 2 (55:24):
Where you could buy gas.
You had to go to a drug storeto buy gas because it was a
cosmetic product, right?
So yeah, that's right.
Speaker 3 (55:32):
And by the year 1920, there were about 2,000
automobile manufacturers in theUS 2,000.
It wasn't just Ford and GM.
That's how they consolidatedeventually into the 1990s and it
became only several players.
So the same type of evolutionwill take place in finance,
(55:57):
where right now the rules arestacked up against the new
innovations coming in, and thenthey'll become faster, quieter,
more convenient and easier touse and cheaper And the rules
just not make sense anymore Andthen you'll see the incumbents
crumbling.
Speaker 2 (56:17):
I think you touched on it even in our pre-discussion
about America is quite good atadapting or dying, and we have
transmitted that thinking, whichI honestly believe it's part of
the melting pot of America isthat we have so many.
My daughter is big on talkingabout the difference in
(56:37):
multiculturalism The Europeanmodel of what that looks like,
versus the American model ofthat, and they're very different
.
Our multiculturalism is more afunction of the melting pot
attitude, whereas in theEuropean model it appears to be
more of a allowing each of thefactions to exist with integrity
and respect, but there's not asmuch mixing in of the melding
(57:00):
of the things together.
Emanuel, we have so much moreto talk about and I am at a hard
stop myself, unfortunately, isthere.
I hope we can somehow figureout a way to continue our
conversation in the future,because I suspect it will be
like John Stewart's show wherehe consistently brings in the
same experts regularly to justkind of continue the
(57:21):
conversation, because I wouldjust be fascinated to do that.
I hope you would feel it wouldbe worth your time as well.
Is that possible?
Speaker 3 (57:30):
Actually.
No, i mean, this firstconversation is us jellying with
each other.
I also feel like we're not evenstarted and we could have gone
in many different directions.
So I want to say thank you forgiving me the chance to lay out
the first principles of how Ithink, and then let's build this
conversation.
And it's a two ways treat,because sometimes when I throw
(57:53):
out an idea, you remember ametaphor, experience it, and
that enriches me as well.
So I really appreciate theconversation Excellent.
Speaker 2 (58:02):
Well, i feel the same way.
I have that warm, tinglyfeeling inside that says here is
a lifelong learner that we canshare a journey together with,
and that would be wonderfulFolks.
My guest today has been EmanuelDaniel, who has two first names
Emanuel That's very difficult,i don't know what Daniel Emanuel
, emanuel Daniel.
I guess we can be right eitherway right, i tell you passport
(58:24):
stories and immigration.
Very good.
Especially, a very suspiciousimport agent would be.
what is going on here?
Which are you So?
but Emanuel is the author of awonderful book called The Great
Translation of Pers.
Transition of Personalizationof Finance is here, which I find
a fascinating title in and ofitself.
(58:45):
That it's saying you know, guys, it's here, learn about it.
And before we talk again, iwill do everything I can to
finish the book, because Isuspect that that will give us
at least a hundred years worthof conversation to have.
So, as the questions come tomind, and I take notes, and I
did write down both thesovereign self and Christopher
Kidd, so I'll be able to speakintelligently about those two
(59:07):
subjects as well.
So thank you so much, emanuel.
Welcome to Frame of Reference informed, intelligent
conversations about the issuesand challenges facing everyone
in today's world.
In-depth interviews with SalkCounty's leaders and
professionals to help you expandand inform your Frame of
Reference Brought to you by theMAX FM Digital Network.
Now here's your host, raulLabresch.
Speaker 2 (00:25):
Well, welcome everyone to another episode of
Frame of Reference Salk Countyand beyond.
And, as you've, if you've beenlistening lately, you know that
we've gone way beyond SalkCounty, which, when this podcast
started, i was trying to talkwith leaders in our local
communities to talk aboutsubjects as broad as art and
education and economicdevelopment.
(00:45):
So, and in some ways, i look atthat now and think of it as
being a preparation time to talkwith guests like the one I have
today.
I am sitting across from avideo screen to someone who is
actually in Dubai right now aswe record this, which is a
wonderful thing that technologyhas allowed us to do.
He is a man that I have come toadmire greatly just in the few
(01:09):
days that I've had since I foundout about him.
Really literally, the peoplethat I work with at Commander
Brand suggested that I mighthave him on as a guest, and the
more I read about him, the moreI thought oh my God, why does
this man want to take time totalk with me?
And it's just wonderful.
His name is Emmanuel Daniel,and Emmanuel is a referred to as
(01:31):
a global thought leader, sothat is one of the terminology
or one of the monikers that hasbeen assigned to him And I'm
intrigued by that alone, but itjust it tells you something
about the range of our guestslately.
So I am extremely excited, mrEmmanuel, mr Daniel, sorry
Emmanuel, i'm just so pleased tohave you on the show with me
(01:54):
And thank you so much for takingthe time out of your very busy
schedule to do that.
Speaker 3 (02:00):
Even before we started, we were already rolling
, so let's keep rolling.
Speaker 2 (02:04):
Yes, we've been having a talk about everything
from the state of China to themonetization of America and the
chaos that resides here, Soperhaps I'll be able to edit
that into something that we canshare with people as well.
But, Emmanuel, as you know oneof the things in my spec sheet I
hope you had a chance to lookat it I like to try to start out
(02:25):
with something called myfavorite things.
It is a gestaltian period ofthe show where we give people
that are listening anopportunity to know something
about you as a human, which Ithink a lot of shows
unfortunately don't have a lotof time to do that, But as much
as you have expressed already,you're interested in getting to
know people and hearing from thecommon folk.
(02:45):
If you will, I'm interested inthe same thing, and I know our
listeners are as well.
So, without further ado, thisis gestaltian.
Wherever it goes, It goes.
Please try to go with the firstthing that comes to the top of
your mind.
But I will ask let's start outwith something perhaps a little
arcane What is your favoritebird?
(03:05):
Emmanuel?
You have a favorite bird.
Speaker 3 (03:10):
Oh, that's a curveball.
Favorite bird, more recently itwas penguins, right, because I
finally stepped on the seventhcontinent and I took a selfie of
myself saying this is it, i'vereached the seventh continent.
And then they made me memorizeall the three species of
(03:31):
penguins that were on theAntarctic.
So I took some things tounderstand penguins how they
look after the young, how theymade all of that.
So it's not necessarily myfavorite bird, but it's the bird
that's got my attention for awhile.
(03:52):
I grew up in Southeast Asia andsomething I learned over time
was that how Southeast Asia wasactually the transshipment point
of birds that migrate from thenorth pole to the south pole six
months in a year and then doexactly the same journey back
(04:13):
the other six months in a year.
Now I can't remember the namesof some of these birds, but if I
looked up a reference book I'llprobably remember them.
But I'll go to places likeTasmania and stand there and
then they will name those birdsand I've seen them in Malaysia
before.
And these are tiny little birdsthat make that journey six
(04:35):
months in a year.
And the way in which thedifferent species make those
journeys.
Some of them are solo, theyactually fly alone, and some
they fly on the back of eachother's wings.
So that's as much as I knowabout birds.
Speaker 2 (04:52):
No, that's fine.
Well, and penguins are.
I'm sure there are peoplelistening right now that love
penguins, so you've justingratiated yourself to penguin
lovers.
They look like they're wearingtuxedos all the time.
How can that not be enjoyable?
All right, so, and actually Iwas thinking you were born in
Kuala Lumpur, right?
(05:13):
Am I remembering that?
Speaker 3 (05:16):
Yes, and then I, right after college, or rather
in four college, i went toSingapore, which is actually
right next to Malaysia.
These two countries were onceone country and they have a
shared history.
We were both part of theBritish colony.
My mother cries when the queenspeaks because her father was a
(05:38):
high ranking official during thecolonial period.
We all learned our English fromthe British after colonialism,
whoever remained as pastors, aspriests and as teachers.
So we share that colonialhistory.
(05:58):
So when I go to a country likethe UK I feel right at home
because we learn the same poetry, the nursery rhymes stuff like
that.
Interesting.
And the interesting thing isthat today when I tell people
I'm from Singapore, becauseSingapore is 75% ethnic Chinese,
so everybody thinks thatSingapore is Chinese.
(06:22):
So I always get asked thesequestions where are you from
originally?
And then I tell them I'm fromMalaysia, or rather I was born
in Malaysia, and then they sayoh, and then I'm thinking what
do you think Malaysia is?
And it's actually the sameracial composition as Singapore.
In both countries I'm 10% ofthe population.
(06:44):
I know my ethnic group, so I'ma minority in both countries,
and an important minority,because all of us, the different
ethnic groups, contributed tothe growth of both of these
countries.
So today when I meet anAmerican I will say where are
you from?
(07:04):
And he will tell me in Ohio orin Canton, ohio or something.
And I said where are you fromoriginally?
Because you don't look NativeAmerican to me.
So I have that identity problem,and what's interesting is that
because I grew up with Chinesepeople, as my neighbors in my
family, we intermarried quitewell and so on.
(07:29):
When I went to China in the year2000 to start my business there
, i was very familiar with theChinese people already A
backstory there.
I started a business called theAsian Banker in 1996.
After, you know, i graduated asa lawyer, but then I spent 10
(07:50):
years trying to figure out whatI wanted to do And I thought the
publication business is a goodway to get to know people and
doing it cross-border gives mean excuse to travel.
And I also thought that thebanking industry why the banking
industry and not something else?
I would have liked to dopolitics, but politics would
have gotten me to jail in manyof the countries in Asia at that
(08:11):
time.
So the next largest industrythat pays the bills was banking,
and banking was also big enoughto.
I call banking a cathedralindustry in that it encompasses
all of life, from cradle tograve.
When you land in any country,if you met the top bankers, you
(08:33):
practically met everyone who'simportant.
So that's why I went intobanking, and now it's been 29
years or so And that gave me anexcuse for with the name the
Asian Banker, i was able totravel all across Asia and I
would land up in a country and Iwould say I'm from the Asian
(08:55):
Banker and they say, oh yes,we've heard of the Asian Banker,
because the name just sounds sopompous that everybody imagine
the day they knew that And inthe year 2000, the chairman of
the largest bank in China, icbc,mr Zhang Zhang Jin, came to
Singapore and insisted on havinglunch with me.
I was running a conference atthat time and I had to take time
(09:18):
out to have lunch with him, notrealizing that China had, at
that time, made that decision tojoin the WTO and to put its
largest banks on the globalcapital market to raise capital
and to build its globalframework.
(09:38):
And I was one of the peoplethat he took pains to have lunch
with me in Singapore.
And at that time I said to himthat we had just started our
business in Shanghai and he'sShanghaiese.
And then he said to me no, no,you come to Beijing.
You want to be serious aboutChina, you come to Beijing.
So because of him, i moved thebusiness from Shanghai to
(10:01):
Beijing, and it was a veryimportant decision because the
government is in Beijing Andeventually we became the best of
friends He's now retired, he'sstill good friends, and that
started my journey of meeting alot of the decision makers in
China at a time when they werecourting any overseas
(10:22):
personality they could find.
And what was really nice A nicestory of my own personal career
is this When I went to Japan,japan wasn't interested in the
Asian banker because Japan'sbanking industry was opposed to
World War II American creation.
(10:43):
If you're not from America, wedon't know why you're important
to us.
And I wasn't there in 1945 whenJapan was just starting out
after having needed to bere-applicated and all that.
But I was there when China wasstarting out in 2000.
And if you took a snapshot ofthe development of the Chinese
(11:07):
banking industry, you will seemy picture in there, because
I've had the opportunity to meeta lot of the key people.
One of my great stars, over andabove Ben Benanke or Alan
Greenspan, is Joe Sautuan, who Ithought was a tall man.
(11:30):
He's a northern Chinese, hespeaks English perfectly.
You can see him at the IMFmeeting in the corridor with Ben
Benanke as a friend.
He could carry his weight inWestern society as much as in
Chinese society And he oversawthe development of the world's
(11:51):
largest country into the marketeconomy.
For me it was like meetingAbraham Lincoln almost, for a
man who made such an incredibledifference to an entire economy.
So there were those momentswhere I thought that it really
was very fulfilling for me.
And of course, china is goingthrough its iterations right now
(12:14):
.
There's a lot of question onthe current president, xi
Jinping, and so on, and I havemy views on those.
But having that front seat viewand having many Chinese
officials as personal friends isAnd if you will notice my book,
(12:34):
the forward was written byformer congressman Barney Frank
Yeah, yeah, and so here's thedeal with my friendships in the
US, right?
So something like Barney Frank,if I was American, i would have
to take a number and weight in aqueue of the American
(12:56):
journalists and people who wantto meet him.
But because I'm from Asia andBarney Frank wanted to come to
Asia and see parts of Asia andaccepted our invitation to speak
at our conferences and so on, ihave him all to myself for
three weeks.
So that's how the friendshipswith some of the key people in
(13:18):
the US developed.
Another person who is a verydear friend is Dick Kovosovic,
the former chairman of WellsFargo.
Yeah, I read about him a bitYeah.
And I have my version of whatwent wrong with Wells Fargo and
the Wells Fargo that Dick built,because I have very great
(13:39):
respect for Dick.
But obviously he set in placecertain cultural things in the
Wells Fargo way of running itsbusiness which should have had
more structural checks andbalances in the system, which he
(14:00):
didn't have, and he was themost heartbroken when Wells
Fargo went down.
So these are people who arepersonal to me And so from a
tiny outpost in Southeast Asia,i've had the opportunity to
interact with some of the mostamazing personalities around the
(14:22):
world And I rememberconversations like Sir George
Matthewson, who was the chairmanof RBS at the time, right after
he actually handed it over tohis successor, who tried to make
that deal with ABN Emerald tobuy the retail business of ABN
(14:45):
Emerald, and RBS was justgrowing out of proportion.
And here I was in Beijing withGeorge Matthewson walking down
the financial street on a quietevening And I asked him this
question how big can a bankbecome?
And he looked at me and he saysI don't understand this
(15:06):
question.
He didn't say I didn'tunderstand the question, he just
looked at me and he showed itas if he didn't understand the
question And for me it was likewhen you have a successful run
as a chairman or a CEO, you dolose perspective, dimension of
what's sustainable And, as itturned out, eventually that
(15:29):
whole deal unraveled and thesuccessor was pillared and
vilified and so on.
So I mean, i'm just throwing inthe experiences that I've had
that have given me a front seatview of the future of finance,
which is why I'm able to writethe book that I did.
Speaker 2 (15:51):
Well, i think listening to your answer to that
question explains now what aglobal thought leader is, or how
, at least, a global thoughtleader becomes a global thought
leader.
It also explains just how farour conversation can go from the
discussion of what yourfavorite bird is.
So let's remember that.
So what another favorite?
What is your favorite kind ofmusic to listen to?
Speaker 3 (16:14):
I'm glad you asked that, because when I catch on a
general I tend to stick on itfor a while.
So until recently it was Queen,it was Freddie Mercury, all
that stuff.
Speaker 2 (16:32):
Arrowsmiths follow the classics, that kind of thing
.
So yeah.
And.
Speaker 3 (16:40):
Elton John, that genre.
Speaker 2 (16:41):
The Who.
Speaker 3 (16:42):
Maybe the Who Were you listening to the Who at all,
so right, okay, good, butrecently I listened to someone
called Christopher Tin And man,he's captured my imagination.
He actually started live, andthat's world music, by the way.
(17:04):
So Christopher Tin is acomposer, come orchestra
conductor, right, and he startedlive, live from California.
After college, his friends whostarted a gaming platform asked
him to write the musical scorefor a gaming platform Then this
is in the early 2000s and he did, and then the first of his
(17:28):
songs became very, verysuccessful.
I only discovered him recentlyand I'm now listening to all
these major songs.
You must listen to ChristopherTin, christopher Tin, and there
are two songs especially thatare incredibly infectious,
meaning that you can listen toit many times in a day.
(17:49):
And then there are others whichhe's now going into more nature
and sustainability themes, andone song is in a Ghanaian tribal
language about the rain Walo yoalo ma, something like that.
And the other one is the Lord'sPrayer in Suhaili And man.
(18:19):
This man put together thevarious cultures and gave it a
European symphonic orchestratreatment to carry the music.
So now African music is globalbecause of the treatment that
he's given it.
So now.
I'm hooked on him.
every time I get a chance Ilisten to his music So I move
(18:43):
from general to general.
So in my youth I was KarenCarpenter and all that stuff.
So I evolved over time.
Speaker 2 (18:52):
You need a jazz period.
Speaker 3 (18:54):
If you haven't listened to jazz yet, make sure
you have, And I have a big jazzband too.
Speaker 2 (19:00):
That's perpetual.
So Coltrane, phil Woods,everyone along that spectrum,
spirogyra even, that's fine,easy one and perhaps revealing
Favorite color.
Speaker 3 (19:15):
This is a very, very good question.
My favorite color is supposedto be red, but everything I wear
is blue.
So in my head, my favoritecolor is red, but in my real
life, all my colors.
You take me to a store.
I always pick up the blue shirt.
(19:37):
So that's me.
Speaker 2 (19:41):
So you have a kind of a warring factionalization
within your own personalitythere No, i'm a red, no, no, no,
you're a blue.
Speaker 3 (19:49):
And then when I was in school, very interestingly, i
was put in yellow house.
I mean, it's all for you, right?
And for all the time I was inprimary school I was never
comfortable with that.
I never came to terms with thefact that I was in yellow house.
(20:09):
So I have a big battle in myhead about colors with that one.
Speaker 2 (20:15):
But in yellow and blue combined we will make green
, and green is a very big partof your life right now, so in a
figurative way at least.
So I'm not sure how much of ityou're dealing out yourself, but
certainly you have familiaritywith green, although European
Asian currencies are all muchdifferent than our green bills
(20:35):
here in the US.
Do you have a?
I try to kind of finish up withmy quick favorites, but this is
one that I find I really enjoyhearing people's answers to, and
that's do you have a favoriteplace that you like to go to or
a favorite thing that you liketo do when you need to or just
(21:00):
feel a yearning to do, and evenwhen you need to go to that
place and cannot that?
if you find something thatreminds you of that place,
reminds you of that time, thatit centers you again, that it
brings a comfort, it brings asense of that's who I am, and I
(21:20):
find that there are places thatpeople can remember times in
their lives that they canremember their mom baking bread.
I mean there are so manydifferent things there that I'm
just curious do you have a thinglike that in your life, or a
memory like that?
Speaker 3 (21:35):
A memory and I guess we played all the time is that I
like cycling towards themountain, thank you.
And that's because when I wasgrowing up in Kuala Lumpur Kuala
Lumpur is actually in a valleyand it's surrounded by the
mountain range, And one of themountain range on the top of it
(21:55):
is a casino called GantingIslands, and it's still there
today.
But when I was growing up therewere no buildings.
Where I was growing up, in fact, right at the edge of the
housing estate in which I lived,was a disused tin mine, so it
was for miles.
It was actually wasteland withgrass on it, but it used to be a
(22:18):
tin mine, so it was actuallyclear land.
And from there I would actuallygo cycling with someone who was
my dearest friend to this day.
I grew up with it.
He's Chinese, ethnic Chinese,but his name is Chu Chongkyeong
and we were classmates.
We were the same age.
So I would take my bicycle frommy house and then I'll cycle to
(22:40):
his house and then we'll calleach other out and then we will
both cycle towards that disusedtin mine And then we would stand
at the edge of that and look atthe mountain range into the
evening until it became dark Andyou can see the light of the
casino on the top of themountain and we will be talking
about everything under the sun,about every place we wanted to
(23:03):
go.
We would be talking geopoliticsof the 1970s and so on, and
then, now that we're adults, chuChongkyeong eventually migrated
to Canada with his family, sohe now lived in Calgary and I've
(23:25):
now been to 111 countries andthese are the things we were
talking about as kids And tothis day, even where I live in
Singapore.
I live in an island which is onthe upper end of the spectrum,
but the reason I live there isbecause it's low density and I
(23:48):
can actually go for huge longwalks, like maybe 15 kilometers
I don't know what that is, butyou know and so on.
So you know about 10 miles orsomething like that And 10 miles
of walking.
You know, give me that anytime,and so I look out for places
like this to stay, to live, tomeditate.
(24:10):
You know, the funny thing isthat I am a very gregarious
person.
When I travel, i always makesure I extend myself to others.
I do several things.
I make sure I don't wear darkclothes, because I realized that
when I wear dark clothes peoplefind me not easy to relate to,
(24:33):
okay, for whatever reason.
So I always wear pastel colorswhen I travel, so that you know
and I always smile, you know,and I always make eye contact.
So I'm actually gregarious, butI'm also my very own best friend
.
People don't see this, but mybest moments are with myself,
(24:56):
and you know, i have no problemswith being alone for days, you
know, and at the same time beinggregarious.
So it's something that there'stwo sides to me that I totally
enjoy, and the thing about beingon your own is that that's
(25:16):
where I get my energy.
I grew up as a Christian, so alot of that had to do with, you
know, being at peace with Godand so on.
But my idea of God has changeddramatically.
I don't think of God as a whiteman with a beard and with a
personality and an attitude andall that.
Sorry, you know, i don't buythat anymore.
(25:37):
In fact, the more I understandabout the universe and how huge
it is and all the issues, allthe factors that define it, i
like to think of God as a forcethat we need to be at peace with
, and so these moments alonehelp me to come to terms with me
(26:01):
and the universe.
You know, don't cause trouble,just be at peace with it.
Speaker 2 (26:06):
Interesting.
Yeah, i can totally concur withyour concept of It's an
interesting.
My walk with God has been muchmore of an understanding of the
broad range of God.
You know that we try toconceptualize Him as just, you
(26:26):
know, a very finite thing,because that's the, i think, in
most minds.
That's the easiest way tocomprehend something of God.
And yet when you think of Godbeing, you know, the creator of
everything and I believe in anintelligent design there as well
that to me is so fascinatingthat it's not only that
awareness of Him as that sort offorce, but also the awareness
(26:49):
of Him is personal touch uponeach of us, which actually kind
of leads in to the thoughtframework of your book that I
just started reading, called TheGreat Translation.
The Personalization of FinanceIs Here, and when I first saw
that title and first began toread it, one of the things that
(27:11):
touched me right away was yourquotes at the beginning of
chapters are, you know,everything from European
classics to contemporaryBroadway, you know, and that, to
me, always that's the type ofauthor that I gravitate to,
because it tells me somethingabout the broad range of their
thoughts but also gives me a wayto you know, grasp right away
(27:36):
what the central core of thatchapter is going to be.
So, and I also thought about,well, personalization, are we
talking about individualism,which right now, you know,
frankly, in the US, thatindividualization and you know,
collectivization of individualsthat all believe the same way, i
(27:56):
find very factionalizing, iguess, or very disruptive.
And yet, as you pointed outbefore we even started recording
, that disruption in America is.
We should be very used to it bynow because it's our history.
You know the George Floyd event.
You know now, i believe, asyou've even talked about back in
(28:19):
the 60s and 70s, it'sinteresting to me that the LGBTQ
plus movement has become muchmore prevalent As a result, i
think, of the George Floyd, youknow, situation opened up a
Pandora's Box, if you will, orat least an awareness that well,
hey, wait a minute, it's notjust this problem.
It's this problem too, andthat's very good in a lot of
(28:45):
ways, but it's usually not verygood when you're in the midst of
it.
You know it can be verytumultuous, and it seems to me
that that's kind of what you'reseeing happening in the banking
industry, which is the primaryarea that you're exercising your
individuality right is to seethis thing and try to bring some
sense to it through the sensethat you're making of it
(29:07):
yourself.
And I found actually I shouldtell you too I found it
interesting that you were drawnto politics and realized that
that was something that wasperhaps too dangerous to be in,
very risk-oriented, at least inChina at that point.
And yet now you're in bankingand finances, which is arguably
also a very risk-orientedbusiness.
So just, they don't put you injail for it, unless, of course,
(29:29):
you do.
You know horrible things withthose finances that people
naughty naughty you know shouldnot be doing.
But what led you to that?
What happened that brought youin?
Well, let's back up too.
What is your definition of thepersonalization of banking that
is happening right now?
Can we put that into aframework that most people would
(29:51):
understand?
Speaker 3 (29:53):
Yeah, if you look at the cover of my book, there's a
picture of an ice cube.
So let's talk aboutpersonalization on two fronts,
right?
One is the personalization offinance.
In order to help peopleunderstand it And you don't need
to be a finance person tounderstand it If you think of
ice, it used to be cut out of,so on out of the lakes in
(30:17):
Michigan, in Boston, put onhorse-drawn carriages, sent to
New York where it finds its wayinto, you know, a glass gin and
tonic or something Right, andthink about how wasteful that
was and how unproductive it wasto transport ice that way.
Banking today is exactly that.
(30:37):
The money that is in yourpocket would have swore around
the world twice, being subjectto exchange rate, interest rate,
bank charges, security costs,holding costs, you know, and all
kinds of things.
In other words, you're not atall in control of the value of
the money that you carry.
Okay, now, we are now enteringa phase, because of
(31:00):
cryptocurrencies andtokenization, that it is already
possible.
It's a reality that you and Ican transact with each other
without having an intermediary.
We don't need a banking system.
We can transact with each otherimmediately, directly.
And not only that everybody you, me.
(31:22):
Anyone can design and issue ourown tokens, and that's
something that people don'trealize.
They think that tokens can onlybe issued by smart people or
financial institutions somethinglike that Now the only thing
that's left to do is that if youissue the token, you just want
to make sure that people want toaccept it and transact with it
(31:46):
and recognize its value.
So now, what made thedifference with ICE?
It was a chemical.
It's a synthetic chemicalcalled chlorofluorocarbate, cfc,
and what's going to make adifference in the
personalization of finance.
So I set out to look for theelements that will personalize
(32:08):
finance.
So the chlorofluorocarbate offinance is what I consider to be
identity, value, verificationand data and information.
Okay, i mean, that's all verytechnical, but basically, if
banking solves these fourproblems, we can all be able to
(32:28):
transact with each otherdirectly.
We don't need intermediaries.
But the way that the history ofeconomics evolves, there will
always be an intermediary.
There will always be somebodywho wants to make money by being
an intermediary of sorts, andit can be an intermediary of the
value, of the identity, of theverification process, of the
(32:49):
data that's being transmitted,and businesses will change.
So what happened to the ICEmerchants?
They ended up sellingrefrigerators, that kind of
thing.
Now, if we as individuals arecapable of transacting more and
more directly with each other,then finance doesn't become the
(33:13):
defining industry in economics.
It becomes an enabling industrythat enables people to get to
do what they want to do.
Nobody wanted a mortgage,people want a home.
Nobody wants an automobile loan, people want a sports car, that
kind of thing.
So now the thing is thatthere's a huge battle underway
(33:36):
where the intermediaries arecontinuing to try and retain
their agency, their role, andthe regulators are also afraid
of making any transitionsbecause there's a whole range of
fraud that is already underway,it stands in the way, and so on
(33:57):
, and the regulators owe it tosociety to moderate the process.
So the book is for people intraditional banking and how they
are going to make thattransition and how they're going
to redefine banks as they gothrough this transition.
(34:20):
And And the thing is that afterI wrote that book, just as he
was going to print, i had givenit to a few friends to review it
, and one of my dearest friendspopped up a book that he had
read earlier called TheSovereign Self.
Okay, you need to look that up.
And The Sovereign Self had theauthors I forget their name now,
(34:45):
but they had written a booksaying that US as a society was
becoming increasinglyindividualistic, people are
being empowered by access toinformation and so on, and the
individual is becoming importantAnd I was just going to print
(35:05):
that way at that time.
So I flipped through the bookquite quickly and I said is
there any overlap or somethinglike that?
We are both parallel books.
So I was intrigued that I wasnot the only one thinking about
the idea of the sovereign self,but from a finance perspective,
(35:28):
And they had no financeperspective in the book at all.
Now, the idea of individualismand individuality I'm not sure
what the phrase should be insociety.
Now I've dealt with it as afinancial concept in banking.
Just one other point is thiswhenever I say the
(35:51):
personalization of finance,every banker imagines he
understands what it means.
He thinks that personalizationof finance is providing such a
personalized service to thecustomer that you love your bank
for it, where you can package amortgage and put it in a ribbon
bound wrapping and give it tohim as a gift And you think that
(36:16):
the bank loves me very much.
Speaker 2 (36:18):
In red.
He'd give it to you, a red box.
For you, it's a box.
Speaker 3 (36:25):
So bankers need to be taught that personalization
means you don't exist anymore,you're not part of the story
anymore.
Speaker 2 (36:32):
You're a data point.
Speaker 3 (36:33):
That's what the you know, And so that's one
misconception that I have tokeep explaining to traditional
bankers who, the moment you saythe personalization of finance,
they imagine they understandthat.
But there's anotherpersonalization that is so
important and so fundamental,and actually this is the subject
(36:54):
of my next book, which I called, you know, which I've entitled
the winning civilization, aboutcountries that define the future
and societies that define thefuture.
So the theory I have is thisthat you know, when civilization
post Bronze Age, you know,bronze Age ended about 1170 BC
(37:21):
And then we, you know, then wemoved into the Roman Empire
period and so on, as long ascivilization was predicated in
the Mediterranean region, it wasincredibly communal.
You know, the Jewish culturewas communal, the Egyptians were
communal, the Greeks werecommunal, the Roman society was
(37:44):
originally very communal, and soon.
But the more north it moved,when it moved to Germany, you
know, and then further up northnorthern Europe, it became
incredibly increasinglypersonalized.
You know, there were theCalvinists who preached or
taught that religion is apersonal relationship with God,
(38:08):
and then there was Martin Lutherwho put that 99th thesis on the
door, saying that you know thatthe church, you know that
religion, again, is a personalrelationship with God.
The church shouldn't be, youknow, claiming peace and all
that.
(38:28):
And then it went up north And bythe time it reached north the
Scandinavian countries and alsothe Netherlands and so on it had
reached a high level ofpersonalization, you know, and
the protestant movementemphasized personalized religion
And the English exported itglobally.
(38:51):
And I call the Americans likethe descendants of the
personalization of religion, youknow, and in the period of the
Calvinists the idea ofpersonalization is personal
accountability, but by the timeit reaches the US, where it is
today, it's actually personalgratification, you know.
(39:12):
So you've seen how thepersonalization of society, of
the individual, had evolved overtime, you know, and into what
America is today.
And America is like the lastchild of that journey, you know.
And America is exporting a formof personalization which is
(39:34):
actually predicated ongratification and consumption
rather than personalresponsibility, you know.
And that, coupled withinformation, where information,
you know, it, empowers theindividual even more to be even
more personalized.
And if you, if you then add thepersonalization of finance,
(39:58):
where you don't needintermediaries and institutions,
that people increasingly dealdirectly with each other, you
actually have society that isevolving so dramatically that it
really needs new institutionsand new structures to hold it
together.
The existing structure justdoesn't hold, doesn't carry
(40:22):
society, and I think that'swhere we are today.
Speaker 2 (40:25):
Well, that opens up to me, boy, in a just a miasma,
i guess, of potential issues,one of which is just the
responsibility.
You touched on that.
You know, in America we're veryadamant about our rights.
I have a right to this, i havea right to that.
I have a right to free speech,i have the right to own my own
(40:47):
guns.
And where we seem to alwaysmiss the boat in my mind is but
with each of those rights comesa responsibility you know with,
with the right to representpeople, as our Congress is right
now, the legislature isrepresenting us right now in the
potential default on our debt.
It strikes me that one of thethings they are forgetting or
(41:10):
trying to use as a bargainingcard is their right to insist on
their agenda And withoutrecognizing and really saying
but we're also responsible forthe financial well being of our
people and our economy and theworld's economy.
So to behave so irresponsiblyis just an abysmal way of being.
(41:33):
So.
The personalization appeals tome from the standpoint of
perhaps, just perhaps, we cantake away some of that power to
cause chaos and, to you know,enlist people in the fear of the
day club Instead of you know.
Instead of that, we can chooseto say whoa, whoa, wait a minute
.
You know, children, children,let's, let's behave for a moment
(41:56):
here, let's stop the smoke andmirrors and let's just try to
deal with things.
The other, the other point thatstrikes me is, as you talk about
this personalization, do yousee, i wonder, the existing
structures, the existing bankingculture and structure,
financial structures that are inplace?
Thank you.
Just as the oil industry isresistant to renewable energy
(42:20):
sources, how do you see theresistance of the existing
banking structures, financialstructures resisting to this
personalization?
Because certainly they have alot to lose.
The power brokers within thatculture have a ton to lose And
they have the power.
One of the things that I'vealways worried about with
cryptocurrencies, for example,is that the people behind the
(42:41):
scenes they can say, oh, that'svery nice, play with that people
, that's just fine, you go aheadand play with your
cryptocurrency, but they'rereally pulling the strings on it
all.
Is there a best strategy forthat transition or are we going
to have to just make it up as wego along?
Speaker 3 (43:01):
The US is a laggard in the very technologies that it
has created itself.
If you want to see the futureof finance, you need to go to
Africa, where the paymentsindustry has now been
revolutionized by any number oftechnology companies that are
(43:21):
able to transact money acrossseveral borders in Africa on the
back of a message, of a textmessage.
Now just think about this Ifmoney is information and if
information can be transmittedfor free, money can be
transmitted for free.
So the technology exists foryou and I to transact with each
(43:44):
other on the back of a WhatsAppmessage.
So the only reason we're notdoing it is because WhatsApp
itself doesn't want to providean infrastructure, because it's
afraid of getting intoregulatory problems in several
countries.
But there are WhatsApp paymentsinitiatives in India and Brazil
(44:05):
already, so the innovations aretaking place outside of the US.
China started off by puttingpayments on its super apps, and
then India started, went on tocreate identities from which you
can make payments to anybody onany platform, so it's a little
(44:28):
bit different from the Chinesemodel.
So today in the US, the Fed isabout to introduce something
called FedNow, which is aninstant payment infrastructure,
and the distractions that I'mreading about people were
claiming that FedNow is aprecursor to the CBDC in the US,
which is totally not true.
(44:49):
It's very interesting that thepushback, the theories and stuff
like that, the conspiracytheories and all that, and to
think that the US is the lastcountry to introduce instant
payment.
The UK was the first.
(45:11):
We have that in many SoutheastAsian countries, now South
Africa and so on.
Speaker 2 (45:17):
Well, paypal has been there all along, and yet that
didn't quite get there, did it?
Speaker 3 (45:23):
Yeah, and the back end of PayPal is still the
credit card industry and it'sstill the back end.
So the US is okay with buildingsomething that looks like an
innovation when actually underthe carpet it's still the same
old thing And being the pioneerthat means that credit cards
(45:44):
were invented in 1967 orsomething like that with Visa
and Diners card.
Speaker 2 (45:49):
Bank of America.
Speaker 3 (45:51):
Bank of America and so on, and then they put the
technology behind it.
Now, and during that period,the US was a leader, but from
that period they built anincredible layers of dependence
on the program and beneficiariesthat they can't dismantle it.
(46:11):
So the story I used as anallegory is that of the Codec.
In 1995, codec invented digitalfilm together with some of the
research organizations inCalifornia, and Codec was the
(46:33):
last to make the transition todigital film, and right into the
2000s, you would still seeadvertisements for the 35mm film
.
2001, sony introduced CyberShot, the digital camera.
2007, the iPhone was invented.
And 2010, codec went intoliquidation and bankruptcy.
(46:56):
So now is it possible for banksto go through the same
experience?
Now, that's what I say in mybook.
Somewhere towards the end Isaid if the product doesn't
change, nothing changes Andthat's my clarion call to the
banking industry that you cantalk about innovation for all
(47:18):
you want, but you're actuallyjust circling around your own
label, but if the productdoesn't change, nothing changes.
Now, when I came up with theCodec story, that was 2017.
And then I spent a few yearsthinking what is the most
beloved of the bankingindustry's product, and I
(47:42):
couldn't see it for a while Itwas right in front of me the
deposit business And I finallywrote it down in my book.
I said that the business thatyou need to unravel is the
deposit business And when Iwrote it I was really afraid
because I thought that bankerswould think I'm dumb or an idiot
, because I also come from thebanking industry and I know that
(48:06):
the best run banks are the onesthat are able to gather
deposits in the cheapestpossible form, because that
gives them the margins in orderto lend, and also the customer
base, who are secure, and allthat And one of the best deposit
story banks in the US there wasWerden Hill, someone who ran a
(48:28):
bank share commerce bank thebest story on the deposit
business I could think of.
But then I could see that thedeposit business was being
digitized, that the digitalwallet players were just as
important as traditional banksin the deposit business And the
(48:51):
name of the game was changingfrom net interest margin to
utility.
In other words, i would trustan institution to carry my
deposits if I can use iteffectively, if I can use it to
pay, if I can pay peopleinstantly and increasingly
paying into digital platforms,including gaming and all that,
(49:14):
and the digital wallet businessis growing dramatically, and I
can see that transition goinginto digital tokens eventually.
And so I've made an assertionin my book and even now in this
conversation, that it's notinconceivable that we will come
to a point that when banks willbe the biggest issuers of stable
(49:35):
coins going forward.
Okay, now, the reason I come upwith these lines of thinking is
that I think through thetransitions and I think through
the logical flows, and then Icome to the conclusion that you
know what this is, where it'sheading.
As a futurist, what I do withthat is I test every current
(50:03):
development against the theorythat I've set out for myself.
If it varies or there's anaberration, then if I'm wrong,
I'm willing to accept it.
I'm saying okay, i'm wrong, iwill stand corrected As long as
I haven't been countered.
I don't need to listen to allthe noise that happens in the
(50:23):
industry Today.
There's so much noise in the USthat you cannot figure out
where this is going.
But if you have come to aconclusion that this is where
it's probably heading, youreduce the amount of noise that
you need to pay attention to.
So, like the SEC makegrandstanding on
cryptocurrencies and the Fedissuing papers and so on.
(50:48):
I go back into US history to seehow the US eventually makes
policy, and then I come to thisdramatic realization that the US
never had a financial policy.
It always had it in reaction tosomething.
The reason Bretton Woodshappened in the first place was
(51:13):
to solve some of the problemspost-war Europe.
The reason the Bretton Woodsagreement unraveled in 1971 was
because the US just couldn'thold on to the price of gold and
then floated its currency,despite all of the US most
(51:34):
important economists, andincluding Keynes and some of the
others including Meishez, bythe way were adherents to the
gold standard.
And yet there comes a pointwhere the US just walks away
from it And just extrapolatedinto everything else.
(51:55):
The reason the dollar is theworld's reserve currency is not
because there was a white paperfrom the Fed saying that we want
to make this a global currency.
It's precisely because the USdidn't care what happened to the
dollar outside of the US.
In fact, it didn't even want itto come back.
(52:15):
Today, if you came back fromsomewhere back into the US, the
first question they ask you iswhether you are carrying $10,000
, some more.
And this is from the 1970s,where there were restrictions on
bringing capital back into theUS.
Right.
Speaker 2 (52:34):
So, the point being that we've always been adapting,
and do you see the bankingindustry continuing to adapt or
becoming the ICE company of thefuture?
Is that the prognosis?
Speaker 3 (52:47):
So what I see the banking industry doing is
resisting as far as it can untilit cannot, because there's more
money to be made in thatresisting ultimately, which
would make sense.
And the thing is that sometimeswhen we talk about the banking
industry, we think of it as agiant.
(53:09):
It's like the biggest buildingin town or something.
It no longer is The largestbank in the world the Chinese
bank, icbc or even JP Morgan.
They're like $2 trillion insize, $3 trillion in size.
There are fund managers nowBlackRock, for example, which is
(53:29):
like $10 trillion in size, $11trillion in size, $6 trillion to
$7 trillion in managed funds,and then there's discretionary
funds.
So there are industries, thecorporate lending business.
The commercial banking paper ofthe business is larger than
bank lending, even in the US.
(53:49):
So banking is just one ofseveral financial intermediaries
in the financial infrastructure.
So, and it's shrinking, it'slike the horse drawn carriage.
What I like very much is aphotograph of New York In 1901,
(54:11):
there was like, if you pull outpictures of New York Street in
1901, you would see 200carriages how close one
carriages and one motor vehicle.
And the motor vehicle is a hugenuisance to the street because
it's heavy, it's noisy, itdamages the street, it stumbles
(54:32):
the horses, it's slow and it'scumbersome and all that.
Speaker 2 (54:37):
My mom used to talk about being a kid in Marinette,
Wisconsin, and a car would comedown the street when the kids
were playing in it and the kidswould chase after the car going
get a horse.
So things are always the same,aren't they?
So we ridicule the new thing intown.
Speaker 3 (54:58):
And just in three years by 1903, it was just the
opposite.
It was like 20 cars and threeor four horse drawn carriages.
In the early years of theautomobile vehicle in New York,
all the rules were stacked upagainst the automobile.
It wasn't stacked against thehorse carriages which speaks.
(55:20):
you can drive on how much noiseyou can make, right.
Speaker 2 (55:24):
Where you could buy gas.
You had to go to a drug storeto buy gas because it was a
cosmetic product, right?
So yeah, that's right.
Speaker 3 (55:32):
And by the year 1920, there were about 2,000
automobile manufacturers in theUS 2,000.
It wasn't just Ford and GM.
That's how they consolidatedeventually into the 1990s and it
became only several players.
So the same type of evolutionwill take place in finance,
(55:57):
where right now the rules arestacked up against the new
innovations coming in, and thenthey'll become faster, quieter,
more convenient and easier touse and cheaper And the rules
just not make sense anymore Andthen you'll see the incumbents
crumbling.
Speaker 2 (56:17):
I think you touched on it even in our pre-discussion
about America is quite good atadapting or dying, and we have
transmitted that thinking, whichI honestly believe it's part of
the melting pot of America isthat we have so many.
My daughter is big on talkingabout the difference in
(56:37):
multiculturalism The Europeanmodel of what that looks like,
versus the American model ofthat, and they're very different
.
Our multiculturalism is more afunction of the melting pot
attitude, whereas in theEuropean model it appears to be
more of a allowing each of thefactions to exist with integrity
and respect, but there's not asmuch mixing in of the melding
(57:00):
of the things together.
Emanuel, we have so much moreto talk about and I am at a hard
stop myself, unfortunately, isthere.
I hope we can somehow figureout a way to continue our
conversation in the future,because I suspect it will be
like John Stewart's show wherehe consistently brings in the
same experts regularly to justkind of continue the
(57:21):
conversation, because I wouldjust be fascinated to do that.
I hope you would feel it wouldbe worth your time as well.
Is that possible?
Speaker 3 (57:30):
Actually.
No, i mean, this firstconversation is us jellying with
each other.
I also feel like we're not evenstarted and we could have gone
in many different directions.
So I want to say thank you forgiving me the chance to lay out
the first principles of how Ithink, and then let's build this
conversation.
And it's a two ways treat,because sometimes when I throw
(57:53):
out an idea, you remember ametaphor, experience it, and
that enriches me as well.
So I really appreciate theconversation Excellent.
Speaker 2 (58:02):
Well, i feel the same way.
I have that warm, tinglyfeeling inside that says here is
a lifelong learner that we canshare a journey together with,
and that would be wonderfulFolks.
My guest today has been EmanuelDaniel, who has two first names
Emanuel That's very difficult,i don't know what Daniel Emanuel
, emanuel Daniel.
I guess we can be right eitherway right, i tell you passport
(58:24):
stories and immigration.
Very good.
Especially, a very suspiciousimport agent would be.
what is going on here?
Which are you So?
but Emanuel is the author of awonderful book called The Great
Translation of Pers.
Transition of Personalizationof Finance is here, which I find
a fascinating title in and ofitself.
(58:45):
That it's saying you know, guys, it's here, learn about it.
And before we talk again, iwill do everything I can to
finish the book, because Isuspect that that will give us
at least a hundred years worthof conversation to have.
So, as the questions come tomind, and I take notes, and I
did write down both thesovereign self and Christopher
Kidd, so I'll be able to speakintelligently about those two
(59:07):
subjects as well.
So thank you so much, emanuel.
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