On book tv on cspan2. Next, citigroup Ceo Michael Corbat talks about the Banking Industry, Global Economy and brexit. He spoke at the detroit Economic Club. [applause] thank you very much, steve. Good afternoon to all the members and guests today. It is my privilege to be your presiding officer today and introduced todays participants. Mike corbin, the ceo of citigroup, as steve mentioned, the worlds global bank with 200 million customers and accounts and within 160 countries. Huge from anybodys measure. He has focused on leveraging network with an emphasis on strong execution and. He highest ethical standards he has been at citi since his graduation from harvard in 1983. Prior to his current role, he has held a variety of ceo positions for citigroup, including ceo of europe, middle east and africa, ceo of citi holdings, the Global Wealth management unit, and the Global Corporate and commercial bank. He is actively involved with several civic and cultural organizations, including his role as executive Committee Member of the partnership for new york city, and is a board of trustee of the United States ski and snowboard association. Introduce dustin walsh who was moderating. Hes an awardwinning Senior Reporter for crane. Many of us his articles on a regular basis. He has covered the Automotive Industry collapse and resurgence , several bankruptcies and multibilliondollar mergers and acquisition deals. Things many of us are familiar with over the years. He served as an expert source on National Local television and radio programs. Hes also won several awards including the alliance of Area Business publications best local coverage of a National Economic story award for his coverage of in sourced manufacturing from overseas in 2012. He attended grand Valley State University and studied journalism. Cup to like to bring my the stage mike up to the stage. If you want to come up and we will hear some remarks. Thank you. [laughter] [applause] thank you for that very warm welcome. Thank theke to leadership of the joint Economic Club for the opportunity to speak to such an influential group. When business and government leaders found this forum during the depression our nation faced tensions and challenges that were exacerbated by both the social and political environment. I think the same in many way can be said of our country today. Americans have lived through the financial crisis, while the governments response was the right one. The crisis left many feeling as if the system is stacked against them and absolves wrongdoers of accountability. To many people it feels like our eras defining Economic Trends include things like globalization which effort them economically. While we have historically low unemployment, wage growth has been stubborn and many live at the anxiety of having their jobs disrupted by technology. Widened. H gap is too many believe their children will have fewer opportunities than they had. Many in our country have lost faith in the american dream. Caused some to question whether our capitalist system is in fact the right one. For my part i believe in capitalism. I believe in free markets. I believe in the right of Free Enterprise to conduct their business. I believe in responsible and reasonable regulation. We would not be the country we are today without these. I also believe for our business to strive and thrive in Todays Society we need to help solve the societal challenges we all face. We cannot be on the sidelines. We need to have Business Models that have a positive impact on society and dont rely solely on philanthropy to show we are solid corporate citizens. Creating shareholder value, in my opinion, will always be necessary, but creating stakeholder value is critical. Today these two goals are more closely connected than ever before. People increasingly are demanding that private enterprise play a role in finding solutions to the challenges we face. Atloyees want to Work Companies that reflect their values and priorities. Atproach is that our core in our best we solve problems. With significant Financial Resources to deploy, we are scaled to serve clients and help them compete in the economy. The clients could be anything from a Multinational Company like ford, where i had the pleasure of spending time this morning. It could be one of our commercial banking clients, like edward leavy, a legend in Road Construction founded on a handshake between its namesake and henry ford. It could be a Public Sector client, including local governments like the state of michigan. Our commitment to solutions can be seen through three decisions we make every day. Who we work with, how we work with them, and how we treat the people who work for us. Think about one of the Biggest Challenges facing our nation today. That is our failing infrastructure. The American Society of Civil Engineers today estimates we short of 1. 5 trillion the required Infrastructure Investment needed by 2025. Not only are the implications for Public Health and safety, theres an Economic Cost to the status quo. The estimated annual cost of highway congestion, 120 billion. Airport congestion and delays, another 35 billion. That is where a bank like ours can help. Our Balance Sheet allows us to finance projects that would be out of the reach of some smaller institutions. Provided year citi financing for 26 billion in u. S. Infrastructure projects, including bridges, hospitals, airports, water and public power. Id like to mention one project we did in detroit which we are particularly proud of. That was during the bankruptcy. Citi committed 60 million and underwrote another 200 billion in bonds on behalf of the Public Lighting Authority of detroit. Thee funds financed installation of over 65,000 efficient streetlights, improving the quality of life throughout the city. [applause] another challenge, Affordable Housing. I mentioned the economic pressure to Many Americans feel acutely. Over 11 million lowincome households in the u. S. Today comprise over a quarter of all rental households. 70 spent more than half their income on rent and utilities. To address this urgent need, last year citi provided 6 billion in financing for the construction and reconstruction of more than 36,000 Affordable Housing units. That level of support not only set a new record for us it citi, it maintained our ranking as the leading financier of Affordable Housing in the u. S. For the ninth year in a row. Have about Climate Change . While some may doubt its existent, we believe it is real and its accelerating and our collective efforts to address it are the greatest combination of opportunity and risk we face. The most some of recent compelling scientific assessments, we cant afford to take action. He goes beyond extreme weather events like the devastating hurricanes we have been experiencing in the past few years. At the same time we need to onognize many people depend the fossil fuel industry for their livelihood. We have clients in this sector and we are not going to walk away from them. We are working to support their transition to a low carbon rconomy, creating green colla careers in the process. 10year, 100de a billion Environmental Finance commitment Funding Clean Energy and other sustainable projects, including the first offshore wind farm in the country. There is great demand for this capital. As a result of that we will meet our goal this year, which will be four years ahead of our plans. Let me be clear. None of these projects are transactions i have described up to this point are primarily rooted in ultra stick, philanthropic or idealistic content. They are core banking activities conducted on behalf of city clients, and they all contribute to our bottom line. There value and benefits accrued to many stakeholders, including our communities, society, our economy, or the Global Economy. In addition, our core activities advance our economy and society by supporting nonprofit organizations that tackle such challenges head on. We have focused on the need to close the widening gap between the skills of young people and what they need to be able to compete in todays workforce. The u. S. Department of labor released a report last fall that found there are 7 million jobs at any one time today that employers still cannot fill. Our pathways to Progress Initiative is designed to help close the job Skills Mismatch by providing 200,000 young people over six years with the tools they need through training, Work Experience and entrepreneurial opportunities. At 100 million it is the largest philanthropic commitment and our companys history. I hope it shows our willingness to put profits back into the communities we serve. We broadened the scope to help 10,000 Older Workers who feel as if they have been on the wrong side of globalization or Digital Innovation to secure employment and Growth Industries like health care, transportation, technology and construction. Several organizations in detroit are involved in this 10 million effort. Is launching a Robotics Program to support people looking to build careers in automation, advanced manufacturing and information technology, feels all helping to grow our economy right here at home. Beyond philanthropy we also accept we have a responsibility to have a point of view on certain issues affecting our colleagues and our communities. When is the epidemic of gun violence. Colleaguesal citi were impacted by the park and massacre we decided we needed to think about where our clients intercepted intersected with this issue. We dont seek to take the place of government and we never intended to offer the perfect solution, much less a new form of gun control. I own guns for recreational purposes. Im a friend believer in the second amendment. Firm believer in the second of emmett. Our policy asks our Retail Sector clients to use accepted best practices if they sell firearms. These include aid restrictions, completed backgrounds checks, and no sale of bump stocks are high complexity magazines capacity magazines. This is followed by retailers including walmart and have strong public support, even among gun owners. We recognize how we operate as a company is an opportunity to demonstrate our values. We focus on building a better, fairer culture at citi, making it is free of racial, gender and other biases as we can. This year we were the first u. S. Company to disclose what we call our unadjusted or raw pay gap. Our analysis revealed our medium pay for women globally is 71 of the median pay for men, showing we have a significant issue with the representation of women in senior roles at our firm. Great, itsparency is is what you do with your data where the rubber hits the road. We have set a goal to have 40 of our mid and seniorlevel leaders in our firm globally filled by females by the end of 2021. We measure our progress against that quarterly. While i focused on citi, im happy to say these issues are increasingly infecting affected by our clients and the Business Community more broadly. In august, the business roundtable, an organization of ceos of major u. S. Companies announced it had revised its principles of corporate governance. Saidevised statement responsible business should also take into account the interest of other stakeholders, such as colleagues, clients, suppliers and communities. It is notided to show just the case with other stakeholders win or shareholders lose. Business is not or should never be a zerosum game. Up until recently business did not have enough credibility to take on social issues. Earlier this year some evidence emerged of a new attitude when the Public Affairs firm edelman published its annual trust barometer. The results revealed a profound shift in the degree of trust that people have for one class of company, and that is that employers. For three out of every four people interviewed globally said they trusted their employers to do what is right for them and for society. That is a welcome shift in perception and development that business should take pride in. I believe it company continue to see their role as creating value for stakeholders as well as shareholders, our country will be stronger, our system will continue to show white creates more opportunity than any other why it creates more opportunity than any other anywhere. I look forward to our discussion and i would like to invite dustin on stage. Thank you. [applause] thank you. That was delightful. I dont to show you where media placed on the trust list. Before i want to do a deeper dive into social topics that you spoke of. I would like to kind of get your barometer on the economy and where it is going. When the Global Economy or National Economy stumbles, detroit fall down a well. What are you seeing in the economy that is seeing recessionary indicators . What is the longterm . In myave talked publicly 36 years of being in the industry, being around companies and the economy more broadly i have never seen a time like this. When you think about where we are today, we are 10 years into a recovery from the great financial crisis. Some people say by historical standards that as long. True, but we have to remind ourselves recoveries have no memory. As my friends in australia remind me 26 years into their recovery. Second, as we look at the economy it cant be looked at three single lens. That is only look at the world, we have a combination of social, economic and political. We have the strata of what we would think of as the consumer, business and government. To understand where the u. S. Economy at the Global Economy is today, we need to take those apart. When you look at the United States today, two thirds of our economy is dictated by the consumer. The consumer is in pretty good shape. We go back to the crisis and think about how intervention was done and where stabilization came from. To the consumer two things matter most. One is their job. Secondary around wages, etc. As we saw last week we have to go back to 1969 to find a job market with lower unemployment than we have today. The second piece is housing. We can argue things but people feel pretty good about their house. Certainly in america and many consumers around the world their home is their largest investment. If you feel good about your job and about, your home the consumer will be engaged. That is what we see. Business has been a bit flighty. Throughout these 10 years business has been engaged, disengaged on the back of tax reform are other things. Business has probably been more conservative. The other piece is we are 10 years into this unprecedented, Massive Science fair project called quantitative easing. In terms ofd trillions of dollars around the world. The things we cant escape in this economy is the impact it had on Interest Rates. Did we ever think any of us with seasoning in the room would look right and find several Major Economies in the world with negative Interest Rates . We operate in those places. It is a strange phenomenon. When you go to someone and say give us your deposit, and by the way you will pay to put your deposit in our bank, it redefines the traditional paradigm of how people think about things. And we haveeve, heard out of the Federal Reserve but is not necessarily transmitted as well. For now we are saying were not a believer in negative rates. You have to look at the other pieces. You wake up, its china. Its brexit. It is usmca and what will happen. Volatility has been destabilizing to business, but fortunately we had the backbone of a healthy, strong, engaged consumer. Dustin i am running short on time so i want to get into this idea of corporate americas role in solving societys ills. Historically it has been the governments role to provide wellbeing to its constituents. Beingw see the role is taken on by corporate america. Does that mean the government is failing us or something has changed . What is the fundamental change where your company does the things you talked about . Michael as we look at some of these issues i talked about guns but if you look at issues we choose to get involved with, in many ways it goes back and starts at home around our employees and the expectation of our employees. Of wanting to come to work for company they can be proud of. Stances we take car very internally focused around ourselves and our clients. We dont go out in Public Forums to speak about them. In the war for talent in the world we live in, taking the stances