GMM Panelists Share Tips on Strengthening Cybersecurity

Cybersecurity gained prominence as a topic of discussion at ICI’s General Membership Meeting (GMM), held last week in Washington, DC. “Hugely important,” said Mary John Miller, the Treasury Department’s under secretary for domestic finance, in her GMM remarks. Likewise, Securities and Exchange Commission Chairman Mary Jo White told GMM attendees that addressing online vulnerabilities must be “a constant focus for both the regulators and the broader business community.”

That focus also was on display May 3 at the Operations and Technology Conference, where a panel of technology experts explored the origins and implications of cyberattacks. Panelists also provided the audience with cybersecurity advice, including the following pointers.

1. Check Every Link in the Chain

“Any of your service providers could be attacked and could leak data,” said Stewart A. Baker, a partner at Steptoe & Johnson LLP. Baker, who helped formulate U.S. cybersecurity policy as assistant secretary for policy at the Department of Homeland Security and as general counsel of the National Security Agency, urged attendees to get assurances from all service providers about data security arrangements.

Panelist Avivah Litan, vice president and distinguished analyst at Gartner Research, agreed that understanding the security of service providers was essential. “We’re only as strong as the weakest link,” she said.

Full story at ICI Viewpoints

Operations and Technology Leadership Roundtable

Superstorm Sandy and the April 15 terrorist attack in Boston rattled assumptions and recalibrated thinking about disaster management, agreed panelists at the Leadership Roundtable of ICI’s 2013 Operations and Technology Conference on May 2 in Washington.

“One of the lessons we’ve learned is that no two events are identical,” said Stephen C. Neff, Enterprise Chief Technology Officer at Fidelity Corporate Services. Fidelity, he noted, was forced by Sandy to take unprecedented steps, including sending a fuel tanker to aid employees hit by shortages in the wake of the storm. Neff said firms should prepare themselves by having “a set of building blocks” that can be configured in response to unfolding events.

Full story at ICI Viewpoints

Luncheon with Keynote Speaker: Lloyd C. Blankfein in Conversation with Paul Schott Stevens

If Lloyd Blankfein were in charge of the U.S. economy, what would he be most afraid of? Blankfein, Chairman and CEO of The Goldman Sachs Group, gave his answer in a conversation with ICI President and CEO Paul Schott Stevens at ICI’s General Membership Meeting.

“I’d be most afraid of the economy sliding back into a deflationary period,” said Blankfein, who has held the top job at Goldman Sachs since 2006. “In some ways, we are in a deflationary mindset.”

While saluting the Federal Reserve’s policies, Blankfein questioned whether its extraordinarily accommodative monetary approach in recent years can remain effective. “What’s the value at this point of taking mortgages down another 3 basis points?” he asked. “Is that going to make people do something they weren’t going to do before?”

Full Story at ICI Viewpoints

GMM Policy Forum

Addressing America’s fiscal challenges will require both raising revenue and cutting government spending, said Mary John Miller, the U.S. Treasury Department’s Under Secretary for Domestic Finance, at the Policy Forum of ICI’s 55th annual General Membership Meeting (GMM).

“I don’t think that we can balance the budget over the long term and meet the obligations that we have without some revenue,” said Miller, who made her remarks as part of a wide-ranging colloquy with ICI President and CEO Paul Schott Stevens. “When people come to talk to me about the Administration’s proposals, I say, ‘Look, everything has to be on the table’,” she added.

Full story at ICI Viewpoints.

Managing Global Funds in Challenging Times

Immense opportunities lie ahead for global fund managers, agreed panelists at a session at ICI’s 54th General Membership Meeting.

“We are only seeing the tip of the iceberg,” said Vijay C. Advani, Executive Vice President, Global Advisory Services at Franklin Resources, Inc. Advani, whose firm draws half of its flows from outside the United States, cited a recent survey predicting the population of individuals defined as middle class will increase from 1.5 billion currently to 5 billion by 2030.

Full story at ICI Viewpoints.

Pushing Bankers On Climate Change

WASHINGTON, D.C. – There’s no shortage of scary stats on the world’s energy needs, particularly for poorer folk. Some 1.6 billion people have no access at all to modern energy services, and 2.5 billion still rely on burning wood and the like for cooking and heating. Developing countries, reckons the International Energy Agency, will need $10 trillion worth of energy investment from here to 2030.

For those worried about global warming, the nightmare is that those trillions will get spent on low efficiency, high pollution technology.

“The investment that takes place in the next ten to 20 years could lock in very high greenhouse gas emissions for the next half-century,” notes the British government’s recently released Stern Review Report on the Economics of Climate Change, “or move the world onto a more sustainable path.”

Pushing for the latter scenario is the International Finance Corporation, the private sector development arm of the World Bank Group. One the IFC’s prime targets at the moment: commercial banks, particularly those in developing economies such as China, India and Central Europe.

Full story at Forbes.com

A Value Line Pro Stands Pat On Stocks

Amidst the wartime market’s nervous swings, Philip Orlando, chief investment strategist with Value Line Asset Management ($4 billion in assets), stays steady with a bullish outlook.

“There is a lot of pent-up demand among both businesses and consumers that will release itself once the geopolitical clouds lift,” Orlando says. If the situation in Iraq calms down, he suggests that such factors could push gross domestic product growth into the 3% to 4% (annual) range for the second half of 2003.

Adding to Orlando’s confidence: He sees the right ingredients for economic recovery in the fiscal and monetary policies being pursued in Washington, namely low interest rates, tax cuts, and–despite the recent hubbub–deficit spending. “These things shouldn’t happen ad infinitum,” he says, “but they are the appropriate near-term policy choices to get an economy out of recession and on to a proper growth path.”

Full story at Forbes.com

Good Deals At Local Banks

Falling interest rates and investor flight from the stock market have, so far, worked to the advantage of regional banks and thrifts. Take GreenPoint Financial, whose GreenPoint Bank has offices throughout metropolitan New York. In the past two years, the thrift has seen its net profit margin widen to 24% from 16%, and its stock price nearly doubled.

With such runups, has the sector gotten too richly priced? Not according to bulls, who argue that although investors might be eager for a stock market rebound, it’s unlikely they’ll pile their assets into equities with abandon anytime soon. On the other hand, deposit accounts are likely to remain attractive. The same goes for real estate–provided home values don’t collapse.

“I think we’re going to see stronger-than-anticipated overall loan growth for the next two to three quarters,” says Thomas Monaco, who covers savings banks for Keefe, Bruyette & Woods, a New York-based brokerage and investment banking concern.

Low short-term interest rates are also a boon for thrifts. Savings banks thrive on the spread between what they pay on deposits versus what they earn when they lend money at higher rates.

Full story at Forbes.com

Going For Brokers

NEW YORK – The S&P financial sub-index may be up 20% since Sept. 11, but many brokerage stocks haven’t fully recovered. In fact, the six brokerages listed below are down an average 32% relative to their 52-week highs and seem cheap by other fundamental measures.

Example: Goldman Sachs (nyse: GS – news – people ), which traded as high as $120 a year ago. At a recent $84, the stock goes for 2.4 times book value versus a three-year average multiple of 3.5.

Based on earnings estimates gathered by Thomson Financial/IBES, Goldman Sachs is expected to earn $4.93 per share this year and $5.90 per share in 2003. Goldman sells for 17 times its 2002 forecast, 14 times the 2003 number and 20 times latest 12-month earnings per share.

Another plus: Despite talk of “synergies” between commercial and investment banking operations, larger financial conglomerates such as Citigroup (nyse: C – news – people ) and J.P. Morgan Chase (nyse: JPM – news – people ) aren’t likely to steal away Goldman’s lucrative work in equity underwriting and mergers and acquisitions. David Trone, brokerage analyst at Prudential Securities, points out that independent investment banks remain the top firms in the industry in these areas.

Full story at Forbes.com