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July 2011 Newsletter

Regulatory Reform - Are you ready?

Shift in Economic Power - As the World Moves East

Annual Meeting, Committee Recognition and Scholarship Award Ceremony

"Off to College Shower" at UASBYW

Merit Award Dinner

Tips for Delegating and Communication

Regulatory Reform - Are you ready?
By Denise Byrd

On April 14, 2011, Thomson Reuters and Bank of New York Mellon sponsored a Women's Bond Club event to discuss regulatory reform and its associated complexities. The event was held as a panel discussion moderated by Chrystia Freeland, Global Editor-at-Large for Reuters News. The thought leaders on the panel included Kathleen Casey, SEC Commissioner, U.S. Securities and Exchange Commission; Nancy Gardner, EVP and General Counsel, Thomson Reuters Markets; Richard Hoey, Chief Economist, BNY Mellon; and Karen Peetz, Vice Chairman and CEO, Financial Markets and Treasury Services, BNY Mellon.

The session began with a macro overview of the sustainability of economic expansion. The impact of the Japanese disaster is thought to be a disruption for the worldwide economy, not devastation, given that Japan and many global corporations have strong balance sheets. An increase in the Fed funds rate is not expected for another year barring any unexpected major increase of inflation. The budget deficit is not viewed as a huge issue. There is no demand for additional credit. Washington is no longer denying that there is a problem, but it will be early November or the end of December 2012 (post elections) before any deal is worked out. For the consumer, the labor market has made an inflection to the upside with steady growth expected in business services and an overall decrease in the fear of losing jobs.

The panel then provided an overview on the Dodd-Frank Act. This is landmark legislation with many encompassing changes to be implemented in a very short period of time. There is a greater responsibility for regulators to focus on systemic risk while ensuring they do not stymie the market and the economy. The oversight from Congress has been helpful. The U.S. is ahead of the rest of the world in many regulations. The financial crisis had allowed the SEC Chairman to make changes that predecessors could not, even though they saw structural issues/weaknesses. The focus is to do the right thing and not to play the short game despite political pressures.

Financial service institutions and the vendors that support them do feel that regulators want to hear their views. The interactive dialogue/comment period has been healthy. There is no question that running a bank will be more expensive, but change is needed. The mix of complying with regulations while being able to run business has to be taken into account. The impact relative to global competition also has to be considered to avoid companies and markets moving to other countries. Rules do not have to be the same globally -- just consistent.

According to the panel, two major lessons have been learned from the financial crisis. First, crisis can equal opportunity for firms looking for unique roles to play. Second, as Dodd-Frank was being crafted, most bankers were MIA from Washington due to the negative press but that was exactly the time they should have been there to discuss potential unintended consequences.

In their closing comments, the panel concluded that the silver lining to the financial crisis has proven to be increased transparency and better systemic functionality.

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Shift in Economic Power - As the World Moves East
By Anne T. Hamilton

On March 22nd, 2011, at One Bryant Park, NYC, Bank of America Merrill Lynch hosted a Women's Bond Club event focusing on the Shift in Economic Power as the world moves East.

Sara Eisen, Reporter and co-host of "Bloomberg on the Economy" on Bloomberg Radio, moderated the session. The panel of experts consisted of:

  • Mary Ann Bartels, Managing Director, Head of Technical & Market Analysis, Bank of America Merrill Lynch
  • Nicholas Consonery, Analyst, Eurasia group
  • Jeff Rosenberg, Head of Global Credit Strategy, Bank of America Merrill Lynch
  • John J. Clark JR, Senior Vice President in the Development Studies, Federal Reserve Bank of New York

The panel discussion centered around China's fiscal strategy and the effects of China and other emerging markets on the global economy. In direct correlation are the recent events which have unfolded within the U.S. and what the impact has been to the positioning of the U.S. in global markets.

China is a fantastic growth story. China has now overtaken Japan to become the 2nd largest economy in the world, sporting an impressive 10% economic growth rate. This rapid growth masks unsustainable pressures that are politically difficult to reconcile and which carry high environmental costs. Increasing socio-economic and regional disparities within China require a more successful approach to sustainability which China is addressing through its Five Year economic development plans. On March 13th China launched its 12th Five Year Plan, addressing social and environmental management and indicating a harder and more conservative tone in years to come.

China's rapid growth has seen an increase in the standard of living with the emergence of a new wealth class demanding a change in methods of communication and a seat at the table, causing a change to the status quo.

China's 'Vendor Financing' model - where China purchases U.S. Treasury Bonds which allows the U.S. in turn to purchase Chinese exports at a low borrowing cost - has been instrumental in China's emergence as an industrialized nation. The benefits include lower-priced imports for U.S. consumers and businesses, expanding export opportunities to China, and the economy-wide benefits of Chinese capital flowing to the United States. Urbanization is happening in China at 15M per year creating a high level of development spurring an enormous upsurge in the demand for commodities.

On the supply side, unrest in the Middle East is causing a slow-down in production of commodities such as oil. A cycle of growth occurring in other emerging markets is adding to the demand for energy and materials, making commodities a good investment while corruption becomes an issue in emerging market economies, particularly in the Middle East and North Africa.

Unrest in the Middle East has created fiscal pressures in Asia which may prompt a willingness in China to intervene as a facilitator of peace. With oil over $100 per barrel we can expect inflationary prices around energy, wages and other assets/commodities. Transfer of payments issues in Middle Eastern countries require reform in order for stabilization to be restored to the region. Egypt, for example, has seen 10 years of falling real wages and declining standards of living, which has lead to the current push for change.

Real Estate in China has also boomed. With 700 million citizens contributing to rapidly raising property prices, analysts have pondered whether China is in the middle of an Asset Bubble. As we know from the U.S. experience, bubbles can grow for prolonged periods of time. Once an asset bubble gains momentum however, even a more restrictive monetary policy may not be able to curtail the growth. Despite growing concerns, however, real estate is still very attractive to Chinese investors, due in part to the fact that alternative investments are not readily available inside of China to match the abundance of newly created wealth.

The West wants China to revalue their currency, while China prefers to let their currency appreciate internally through inflation. This leads to the major currencies (e.g. USD, CHF, Yen) not being able to depreciate, meaning that China now exports inflation as their policies spur rising inflation around the globe, resulting in increasing interest rates.

U.S. liquidity and economic management are not perceived to be as strong as it once was. Critical to restoring faith will be how the U.S. addresses lessons learned from the crisis. While U.S. assets and the dollar still have a lot of strength in credit quality and the U.S. economy is still perceived to be a dynamic one, perception of the U.S. government's ability to manage money has diminished. Continuing to run a large budget deficit will reduce the attractiveness of the U.S. market to investors. So how does the U.S. up its game?

Unfortunately China's Vendor Financing model does not compel the U.S. government to do too much about the fall-out issues arising from the financial crisis. Cheap, affordable goods continue to sustain a high standard of living for U.S. consumers, despite structural deficits that are looming on the horizon and the imminent threat of looking at the bottom of the bond market. Only a significant rise in interest rates is expected to give impetus to a correction.

From China's perspective, it will remain in Treasuries for as long as it wants to supply U.S. demand, which is expected to continue for a long time to come. China in turn has the ability to absorb massive FX imbalances. In the long-term China's success will force the U.S. to re-address its competition strategies and ask the question: how will the U.S. compete against China's massive manufacturing policy? Will the demand for manufacturing competitiveness in the United Stated increase based on American and not Chinese advantages going forward?

On the bright side, the series of recent asset bubbles and financial crises are expected to create an ultra-conservative class of baby-boomers, growing our public finance and fixed income business throughout the U.S. Already the private sector has improved its net savings position. Q1/11 is the first quarter since Q2/08 that economic growth was reported for the U.S.

Other things that the U.S. can do to restore its global standing are:

  • Preserving confidence in the dollar and being vigilant against inflation.
  • Stimulating the economy with jobs
  • Monitoring the surge in commodity prices (potentially a new complication)
  • Contain insipient financial excess

In order for the U.S. to maintain its current status and for citizens to continue to maintain their standard of living, America needs to find ways to remain competitive in global markets while practicing fiscal responsibility at home.

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Annual Meeting, Committee Recognition and Scholarship Award Ceremony
By Anne T. Hamilton

The Women's Bond Club Annual Meeting and Scholarship Awards Ceremony was held at Barclays Capital at 745 Seventh Avenue, NYC, on Wednesday, June 8th.

Liz Byrnes, outgoing Women's Bond Club Co-President, opened the Annual Meeting and was followed by Treasurer, Cynthia Nutini, who provided a financial summary for the year and the budget for next year. After reviewing the board nomination process, Liz introduced the incoming Board of Directors and facilitated the election process. Here is the 2011 – 2013 slate:

Women's Bond Club Executive Committee/Board Members:

  • Co-President, Fran Tutone Kapner, J.P. Morgan
  • Co-President, Mary Caracappa, Morgan Stanley
  • Vice President, Andrea Ianniello
  • Treasurer, Cynthia Nutini, Bank of America Merrill Lynch
  • Secretary, Mayra Sacco, BNY Mellon

Women's Bond Club Board Members:

  • Siobhan Dunn, Morgan Stanley
  • Anna Ewing, NASDAQ OMX Group
  • Vicky Hayes, Goldman Sachs & Co.
  • Karen Lorentz, NYSE Euronext
  • Margaret Morrison, Ernst & Young
  • Suzanne O'Connell, IBM
  • Diana Sinti, Deloitte Consulting LLP
  • Linda Wittich, Broadridge Financial Solutions

After Fran Kapner, Women's Bond Club Co-President, thanked the outgoing board, she recognized the committee volunteers and expressed the board's gratitude for their contributions and work.

The second half of the program was dedicated to the 2011 scholarship winners. Following a pre-ceremony reception, the scholarship winners and their guests and mentors joined the main group. Our host, Lauren Malafronte, Managing Director and Head of Client Service, Americas, for Prime Services at Barclays Capital, welcomed everyone and provided some insight into her career and Barclays' commitment to leadership and development.

Janis Elfving, representing the Women's Bond Club Community Outreach Committee, awarded six young women with $20,000 scholarships:

Annual Scholarship Winners:

  • Kay-Chelle Waterton, A. Philip Randolph High School
  • Sabrina Williams, Frederick Douglass Academy
  • Amy Tran, Manhattan Center for Science and Math
  • Heidi Ng, Manhattan Hunter Science High School
  • Renee Black, Norman Thomas High School
  • Katherine Martinez, The Young Women's Leadership School

After the ceremony a networking reception was held for all participants, allowing the scholarship winners and their families to meet with Women's Bond Club members and for the members to converse amongst themselves before the summer hiatus. A big Thank You goes to Barclays for their gracious hospitality and to the event organizers for orchestrating such an enjoyable evening.

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"Off to College Shower" at UASBYW

The Women's Bond Club Community Outreach Committee hosted an 'Off to College Shower' for the 58 members of the Urban Assembly School of Business for Young Women's 2011 graduating class on June 10th. The UASBYW prepares students for business leadership roles by exploring different areas of business and a variety of career options and teaching them how to succeed in a diverse, ever-changing business environment. All of the graduating seniors have been accepted to college and the 'Off to College Shower' was a wonderful way for the Women's Bond Club to congratulate them.

A big thank you to Women's Bond Club Co-President, Fran Kapner, for speaking about her career experiences and motivating the students to continue to believe in themselves. Thanks to Svenja Freckmann, Verena Detmer, Rebecca Hammond and Eleanor Weille, who coordinated the event and assembled the totes full of wonderful travel items, coffee mugs, alarm clocks, ID holders and various other goodies. Thank you to Invesco for their generous donation, which enabled us to send the seniors off with books, memory disks and journals. Thank you also to Commerzbank for purchasing the great totes to hold all of the gift items and finally, thanks to Rosa Alaimo and Michele Tomic for their generous donations and help towards making the college shower a success.

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Merit Award Dinner

The Women's Bond Club held its Annual Merit Award Dinner on May 5th at New York's Pier Sixty. The Club recognized Sylvia Ann Hewlett, Center for Work-Life Policy Founding President, with the Isabel Benham Award and gave Sarah Diamond, IBM Financial Services Managing Partner, its prestigious Merit Award. Additionally twenty-nine women across the Women's Bond Club were given the Rising Stars Award.

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Tips for Delegating and Communication

Delegating Effectively

Most workers need to communicate, track and manage delegated task items. It is particularly important for project managers as well as supervisors who not only have to manage their own tasks but also need to make sure their direct reports get things done, too.

Whoever is responsible and accountable for an action item or project should delegate clear guidelines on completing a task as well as follow-through with others to ensure success of an action or project.

The following are key points to remember for effective delegation that can be used with both small tasks and large projects:

Communicate desired results. Make sure to provide the overall goal and purpose of the task or project along with the intended benefits and consequences if the action is not performed correctly. Providing this information supports decision-making for the delegatee during the course of a task or project.

Provide clear guidelines. Provide clear and concise instructions either verbally or via e-mail. Be clear on timeframes, budget, resource allocation and expectations in completing the task or project. Although some workers feel providing clear guidelines can be perceived as micro-managing, it is important to define the boundaries and be clear on assignment details.

Determine communication plan. Identify others or resources to contact in case there are questions or issues that arise during the task. This saves others time when they get stuck to know exactly who to reach out to for assistance. Also, determine the method and frequency in which follow-up will occur. This will eliminate confusion as to who contacts whom when a task is completed.

Reprinted from the Motivational Manager, 800-878-5331, www.managementresources.com

Perception vs. reality: What are you communicating? Your best efforts to motivate a workforce can fall through if you don't pay attention to the details. Once perceptions of unfair treatment take root, you'll have a hard time maintaining the level of morale and productivity you need.

Don't let these mistakes smother your hard work:

  • Inequitable wages. If senior employees discover that new hires make more than they do, or college grads realize that they're being paid less than colleagues who lack their credentials, trouble will follow. Create a pay scale that takes into account such factors as training, experience, and company seniority. Then make sure everyone understands how the rules apply.
  • Disorganized management. Chaotic business practices that leave workers confused about their role—and yours—will alienate employees who want to do their best work, but can't. Review your organization's operations, eliminate red tape, and provide your workforce with clear direction so they don't waste on the wrong tasks.
  • Unconstructive criticism. Constructive feedback inspires improved performance, but constant nitpicking creates resentment and the feeling that management is out to get employees. Be generous with praise and selective with criticism, and urge your fellow managers to do the same. If you need to correct mistakes, be sure your negative comments are job-related, not personality-focused, and include clear, practical suggestions for improvement.
  • Unappreciated efforts. If employees think no one notices their hard work or that managers don't care, they'll stop putting out their best effort. Tell workers how much you value their contributions, and show them with tangible rewards. Even a small bonus, like a gift card, can have a big impact on morale and future productivity.

-Adapted from the Microsoft bCentral UK website

Reprinted from the Motivational Manager, 800-878-5331, www.managementresources.com

Be prepared for employee pushback to your feedback

When you've got an employee whose performance needs some adjustment, delivering feedback is only one part of the process. You need to be prepared for pushback—excuses, blame, etc. Here's how to respond:

  • Denial. Claims like “That didn't happen,” or “I never do that” shouldn't throw the conversation off track. Be sure you've got the facts, and stay focused on them, even if you have to repeat yourself once or twice. If the employee refuses to accept the truth, feedback may not be enough to resolve the situation.
  • Blame. Don't let employees evade their own responsibility. It may be true that Sandra in accounting didn't deliver the numbers, but that doesn't let Simon off the hook for not following up. Emphasize behavior that you and the employee can control: “Next time, you could pick up the phone and talk to Sandra directly.”
  • Excuses. Often employees make excuses because they think you're only interested in blaming them for their mistakes. Let them know that you only want to solve the problem—you don't need to punish anyone as long as the mistake doesn't get repeated. Focus on helping the employee identify more effective ways of getting the job done in the future.
  • Fear. You don't want your feedback to paralyze employees with anxiety. As before, emphasize that your goal is to prevent future mistakes, not to place blame on anyone. Reassure the employee of your confidence, and discuss what to do differently.

-Adapted from the Perdido website

Reprinted from the Motivational Manager, 800-878-5331, www.managementresources.com

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