Welcoming Remarks by Japanese Prime Minister Yoshihide Suga

Prime Minister Yoshihide Suga's Address

• Japan's economic strategy prioritizes coronavirus containment and post-pandemic recovery while inheriting previous economic reforms.
• The government is supporting the "GoTo" travel campaign to revitalize the tourism and rural sectors despite 20+ infections among over 1,600 participants.
• A new Digital Agency will be established next year to remove barriers to teleworking and boost national productivity.
• Japan aims to become a global financial hub by accepting overseas capital and urgently considering tax, legal, and visa reforms.
• Corporate governance reforms will be implemented to ensure management diversity, including women, foreigners, and mid-career hires.
• The Tokyo Summer Olympic Games are scheduled for next summer, with a primary focus on ensuring a safe event to trigger inbound tourism revival.

Panel Overview and Economic Context

• The panel "Staying the Course" features leaders from BNY Mellon, Credit Suisse, Goldman Sachs, and Wellington Management, all navigating the 2020 pandemic.
• The conference theme assesses organizational leadership and reaction during the worldwide health crisis, noting the delay of the Olympics.
• The Milken Institute has categorized its pandemic response efforts into six areas: education, testing, prevention, treatment, solution research, and financial assistance.

Bank of New York Mellon (BNY Mellon) Strategies

• BNY Mellon is not a traditional consumer bank but a leading asset servicer and manager with $38.6 trillion in custody and $2 trillion in assets under management.
• The firm acts as the sole clearing agent for US Treasury securities and manages approximately $3.6 trillion in the repo market.
• During the pandemic, BNY Mellon facilitated liquidity for dealers through the Primary Dealer Credit Facility, Municipal Liquidity Facility, and CARES Act extensions within two days.
• The company has invested in technology at a 10% compounded annual growth rate over the last three years, maintaining flat expenses.
• BNY Mellon is launching an ESG analytics app in partnership with data providers like MSCI to help clients manage sustainable investment portfolios.
• The firm has committed to increasing senior leadership diversity for Black and Latinx employees by 30% within three years.
• Todd emphasized that while remote work was effective, "time decay" is a concern, prompting a shift toward in-person aggregation and enhanced onboarding.

Credit Suisse Performance and Adaptation

• Credit Suisse led a $20 billion Swiss SME lending facility established within three weeks of the lockdown to support small and medium enterprises.
• The bank achieved its highest net income in a decade and a 12% return on tangible equity in the first six months of 2020.
• Credit Suisse successfully transitioned 90% of its 50,000 global employees to remote work with minimal operational disruption.
• The firm faces ongoing risks from potential second lockdowns in Europe and has implemented measures to protect capital and liquidity ratios.
• Credit Suisse is developing Sustainability Research and Investment (SRI) solutions to meet rising client demand for green, blue, and transition bonds.
• The bank is integrating sustainability overlays into single-stock research and setting clear diversity targets for its global divisions.

Goldman Sachs Capital Markets and Digital Shift

• Goldman Sachs experienced a significant spike in capital raising volumes for retail, SME, and corporate clients, supported by central bank facilities.
• Online banking usage surged by 40% year-over-year, driven by both retail and institutional clients purchasing equity and fixed income instruments digitally.
• The firm reports a "high tech, high touch" model, combining digital platforms for standard activities with advisory services for complex client needs.
• Private equity and private debt are seeing strong growth as investors seek returns in a low-yield, negative interest rate environment.
• Goldman Sachs employs over 10,000 engineers, leveraging APIs to allow clients direct access to risk management and research platforms.
• The company is accelerating the digitization of traditionally analog processes, including capital raising and consumer banking.
• Leadership maintains that while technology adoption has accelerated, human interaction remains critical for business relationships post-pandemic.
• Goldman Sachs is addressing employee demands for sustainability by integrating it into a broad nine-theme sustainability platform, driven by the values of its younger workforce.

Wellington Management and Investment Innovation

• Wellington Management manages nearly $1.2 trillion in assets, grown organically since its founding in 1928 as the first balanced mutual fund.
• The firm has established an "Investment Science Group" to hire data scientists and integrate AI into fundamental research for idea generation and risk analytics.
• Wellington is utilizing natural language processing tools to allow investors to query large datasets, reducing analysis time for thousands of 10-K filings.
• The firm is expanding into alternative assets, currently managing $27 billion in alternatives, with a growing footprint in private markets.
• Wellington partners with the Woodwell Climate Research Institute to create climate impact maps, such as heat and drought maps, for market analysis.
• The firm employs a "triple edge" research approach, combining credit, equity, and ESG perspectives on every investment.
• Wellington engages with approximately 15,000 companies annually, using shareholder meetings to drive long-term corporate change on sustainability.

Common Themes and Future Outlook

• All panelists confirmed that technology deployment was critical to maintaining operations during the rapid shift to remote work in early 2020.
• Environmental, Social, and Governance (ESG) factors are no longer viewed as a fad but as a central driver of capital allocation and client demand.
• Diversity and inclusion initiatives are being formalized with specific, time-bound targets to better reflect the societies financial institutions serve.
• The consensus among leaders is that the pandemic has permanently accelerated the digital transformation of financial services.
• Private markets and private equity are expected to continue growing as investors seek yield in a low-interest-rate global environment.
• Biotechnology and health innovation remain critical areas for investment, with experts predicting significant breakthroughs in the next 20 to 30 years.