Name: The geopolitical and financial landscape of late 2024
Uploaded: 2024-10-09T16:49:46.711Z
Duration: 616.92

RMA.INT.01 - Chawla.mp4

RMA.INT.01 - Chawla.vtt

English

{{00:00:04}}
Manas, thank you so much for joining
me at RiskMinds America this year.

{{00:00:08}}
Tell me, in the last stretch of
2024, what events should financial

{{00:00:12}}
institutions have on their radar?

{{00:00:14}}
Absolutely.

{{00:00:15}}
I mean, we've got just a few months
to go before the end of the year, but

{{00:00:17}}
it's a packed geopolitical calendar.

{{00:00:20}}
I think the one thing that's already
on everyone's minds, and rightfully

{{00:00:23}}
so, should be the American elections.

{{00:00:25}}
We're about 60 days to go.

{{00:00:27}}
And this race has been possibly
more uncertain than any race we've

{{00:00:31}}
ever seen with 60 days to go.

{{00:00:33}}
I think, you know, financial
institutions should be watching

{{00:00:36}}
carefully for two things, right?

{{00:00:37}}
One, there should be scenario mapping.

{{00:00:40}}
What does each candidate's
victory mean for them?

{{00:00:43}}
But two, and I think this is overlooked,
there should be scenario mapping.

{{00:00:46}}
What are some of the sort of, you know
black swan events that could happen?

{{00:00:50}}
Some of the third possibilities that might
pose risk and trouble for them, right?

{{00:00:54}}
One example, which I think is
increasingly likely with how close

{{00:00:57}}
this election will inevitably be is
what happens when one side doesn't

{{00:01:02}}
agree on who won the election, right?

{{00:01:04}}
What happens when some state takes
hours or days longer to count its vote?

{{00:01:11}}
And, you know, one political party uses
that to claim falsely that it's won the

{{00:01:15}}
election to dispute election results.

{{00:01:16}}
We've seen this happen before.

{{00:01:18}}
And thankfully we averted sort
of the worst consequences.

{{00:01:20}}
But we've seen what
happens in January 6th.

{{00:01:23}}
And a rerun of that is
increasingly likely.

{{00:01:26}}
Particularly as we edge towards a
political situation in the United States.

{{00:01:29}}
Where winning the national sort of
popular vote isn't nearly enough.

{{00:01:33}}
In fact, you could win that by a
margin of up to 7 million people now.

{{00:01:37}}
7 million people because there's
so many excess votes piled up of

{{00:01:40}}
Democrats in New York and California.

{{00:01:42}}
And you could still lose the
electoral college, right?

{{00:01:44}}
And what implications does this
have for American foreign policy?

{{00:01:47}}
Does it turn more inwards?

{{00:01:49}}
Does it turn more isolationist?

{{00:01:50}}
Second thing is this race has
been so dominated as a race of

{{00:01:53}}
personalities that we're forgetting
that there's also an election for,

{{00:01:57}}
for Senate and the House, right?

{{00:01:59}}
There's also an election in Congress.

{{00:02:01}}
And what the makeup, sort of the
makeup of that turns out to be will

{{00:02:04}}
shape significantly how much leeway
either candidate has in terms of

{{00:02:08}}
implementing its policies primarily also.

{{00:02:11}}
In the case in Ukraine, right?

{{00:02:12}}
Even if Harris wins, it's still to be seen
if she has enough support in Congress to

{{00:02:16}}
pass another massive military aid package.

{{00:02:19}}
And speaking of Ukraine, I think one
event that can that, you know, financial

{{00:02:22}}
institutions should look out for, for
the future of that country and for

{{00:02:24}}
the future of Europe is what happens
next in its invasion of Russia, right?

{{00:02:28}}
Ukraine has now captured about
500 square miles of land in

{{00:02:32}}
the Kursk region of Russia.

{{00:02:33}}
However, those supply lines are
really, really stretched right across

{{00:02:37}}
hundreds and hundreds of miles, right?

{{00:02:39}}
How Russia responds to this?

{{00:02:41}}
Does it divert some more
of its troops there?

{{00:02:43}}
Does it keep pressuring on in the Donbas?

{{00:02:45}}
What is the understanding on either
side about the possibility of a

{{00:02:48}}
negotiated political settlement?

{{00:02:50}}
All of these things will define where this
conflict is headed in the next few months.

{{00:02:54}}
And I think it will be a really important
resolution, not just for Ukraine and

{{00:02:58}}
Europe, but for the rest of the world.

{{00:03:00}}
Amazing.

{{00:03:01}}
So, So we've just talked about
foreign policy and the potential

{{00:03:04}}
outcomes for either of the candidates,
but what about things like tech

{{00:03:09}}
development and AI development?

{{00:03:11}}
What about how the regulations
for that, what do you think

{{00:03:13}}
will happen on that front?

{{00:03:14}}
Yeah, absolutely.

{{00:03:15}}
I mean, artificial intelligence is
the buzzword on everyone's lips, not

{{00:03:18}}
just at this conference, at every
conference I've been to, right?

{{00:03:21}}
But the really interesting thing
is I think people overlook the

{{00:03:24}}
political dimensions of AI development
of deployment of regulation.

{{00:03:29}}
And I think that's where a lot of
the really interesting trends are

{{00:03:31}}
happening and also where a lot of
the hurdles and challenges will be to

{{00:03:34}}
industries adopting and deploying AI.

{{00:03:37}}
If you look at the election
cycle, we've seen something

{{00:03:39}}
really interesting happen, right?

{{00:03:41}}
For years we thought of San Francisco,
of California, of these tech elite as

{{00:03:45}}
squarely within the Democrat camp, right?

{{00:03:47}}
Now you see a faction where
that's not so much the case.

{{00:03:50}}
You see people like Peter Thiel, right?

{{00:03:52}}
Notable sort of Silicon Valley
investor and tech mogul.

{{00:03:56}}
That is playing a really
key role in this election.

{{00:03:57}}
Elon Musk, right?

{{00:03:58}}
Pledging 45 million dollars
to Donald Trump's campaign.

{{00:04:02}}
The highest, perhaps, that
we've seen in election history.

{{00:04:04}}
Peter Thiel also introducing
Donald Trump to JD Vance, right?

{{00:04:07}}
They're playing really pivotal
roles because they have an agenda.

{{00:04:10}}
Not for pure altruistic reasons,
but also because their agenda

{{00:04:14}}
has a lot to do with AI, right?

{{00:04:16}}
These people that are in charge of
companies that you know, contribute

{{00:04:19}}
to the deployment and development
of AI, want a light touch approach

{{00:04:22}}
towards regulation, right?

{{00:04:24}}
And that's also the case and we
talked about sort of other tech

{{00:04:26}}
trends and antitrust that we're
seeing on the Democrat camp, right?

{{00:04:29}}
The Democrats are also the party of
big money, they have big tech donors,

{{00:04:34}}
and some of these, you can think of
Reid Hoffman, the LinkedIn guy are

{{00:04:37}}
vociferously advocating for lighter
touch antitrust approach, right?

{{00:04:41}}
You've got Lena Khan the loss of these
tech investors almost across the board

{{00:04:45}}
are opposed to and some of our policies
and want to get rid of or want to change.

{{00:04:49}}
So, I think some of these markers,
right, are really important.

{{00:04:52}}
What do these tech backers, these Silicon
Valley political donations actually mean

{{00:04:57}}
for the future of AI and tech development
in the United States and for either party?

{{00:05:01}}
And how does that actually play out,
especially as these technologies continue

{{00:05:05}}
to proliferate and accelerate in their
development far beyond you know, we as,

{{00:05:11}}
as sort of governments and as regulators
can, can kind of take charge of them.

{{00:05:14}}
Amazing.

{{00:05:15}}
So we just talked about the technology
side of things, but what about the

{{00:05:19}}
financial regulation side of things?

{{00:05:21}}
Will there be a lighter touch there
or will the or is there a candidate

{{00:05:24}}
that's expecting a non-lighter touch.

{{00:05:27}}
Yeah, yeah.

{{00:05:27}}
I mean, you know, across the
board, what we're seeing is

{{00:05:31}}
a lack of defined policies.

{{00:05:33}}
We don't really know.

{{00:05:34}}
We're still 60 days to go,
which isn't that long of a time.

{{00:05:37}}
But this is an election, like I said
before, that's been played out on

{{00:05:40}}
personalities, not on policies, right?

{{00:05:42}}
So, both the Republican and the Democrat
campaign, we don't actually have a

{{00:05:46}}
full fledged manifesto of economic and
financial policies, and particularly

{{00:05:51}}
on the sort of regulatory front.

{{00:05:52}}
What we can do is gleam some signs from
things that they've already said, right?

{{00:05:57}}
And here you see the classic story, right?

{{00:05:59}}
Donald Trump, the Republicans,
pledging a lighter touch approach.

{{00:06:02}}
Right?

{{00:06:02}}
You can see what they've said on,
for instance, corporation tax.

{{00:06:05}}
Right?

{{00:06:06}}
You can see what they've said on
regulation for businesses and sort

{{00:06:09}}
of big industries and big tech
and big pharma and big healthcare.

{{00:06:12}}
And you can see, you know,
something of the opposite happening

{{00:06:15}}
on the Democrat front, right?

{{00:06:16}}
And the Democrat party
splintered a little bit, right?

{{00:06:18}}
You've got the more, sort
of the progressives, right?

{{00:06:21}}
That are more further on on the left.

{{00:06:23}}
But the way that the Democrats will win
these votes is also by getting some of

{{00:06:28}}
these sort of more mainstream centrist
voters, particularly in the swing states.

{{00:06:31}}
And to do that, it's, you know, constantly
shifting its ideological base, right?

{{00:06:36}}
Kamala Harris was once you know, In favor
of banning fracking, she's not anymore.

{{00:06:42}}
Why?

{{00:06:42}}
Because it's a key issue in swing states.

{{00:06:44}}
And so some of these dynamics I think are
really key to watch out for is what state?

{{00:06:48}}
Dictate what sort of approach
for some of these candidates.

{{00:06:52}}
Kamala Harris now has proposed
this sort of you know, unrealized

{{00:06:54}}
capital gains tax, right?

{{00:06:56}}
There's a lot of questions still to be
answered on how we account for that,

{{00:06:59}}
how we measure the value of assets,
how that's actually implemented.

{{00:07:02}}
So I think, you know,
that's where to watch for.

{{00:07:04}}
What are the priorities in swing states?

{{00:07:06}}
How do they define candidates
sort of postures going forward?

{{00:07:09}}
And what actual impact does that have?

{{00:07:12}}
A few months, there's still a
lot to be said on that front.

{{00:07:15}}
All right.

{{00:07:16}}
So I just wanted to close the conversation
on what's going to happen in 2025.

{{00:07:21}}
What's on your radar,
essentially, and what should be

{{00:07:23}}
on financial institutions' radars?

{{00:07:24}}
I mean, with everything going on, it's
so hard to already start looking at

{{00:07:27}}
next year, but I think organizations
have to in order to be prepared, right?

{{00:07:31}}
By now, most people have woken up to
the possibility that geopolitical risk

{{00:07:34}}
is a significant risk and it actually
impacts business operations, right?

{{00:07:39}}
Your actual assets on the ground.

{{00:07:40}}
I think going into 2025.

{{00:07:42}}
The number one thing we need to do
is to look at what the actual impacts

{{00:07:46}}
of the American elections will be
beyond just who wins and who loses.

{{00:07:49}}
How do they filter down?

{{00:07:50}}
What are the transmission mechanisms
specifically from who wins to who they,

{{00:07:55}}
who they appoint for the regulatory
front, for what policies they implement,

{{00:07:58}}
for how much support they have in
Congress, to what that actually does

{{00:08:02}}
to your business, to what alternatives
it has for your business, right?

{{00:08:04}}
There's a lot of different steps
to think about and that kind of

{{00:08:07}}
systems thinking approach needs to
be a lot more important, I think.

{{00:08:11}}
And I think a second thing is
looking to the international front.

{{00:08:13}}
We should be closely watching
the macro environment.

{{00:08:16}}
This is something we
haven't mentioned so far.

{{00:08:18}}
Right now, you know, this is
the year of the landing, right?

{{00:08:20}}
Every country's trying to approach
something akin to a soft landing,

{{00:08:24}}
trying to drive down inflation
whilst avoiding a deep recession.

{{00:08:28}}
And the United States has so
far been successful in this, but

{{00:08:31}}
all the other big central banks
remain cautiously optimistic.

{{00:08:34}}
There's a lot of givens
in central banking policy.

{{00:08:37}}
A lot of those givens and
those presumptions are

{{00:08:39}}
turning out to be incorrect.

{{00:08:40}}
This year we priced in several
rate cuts at the start of the year.

{{00:08:44}}
That outlook changed significantly
as we approach the summer.

{{00:08:47}}
So I think that's one area to
really cautiously pay attention

{{00:08:49}}
to as we go into next year.

{{00:08:51}}
And the last thing I'll
point out is China, right?

{{00:08:53}}
I mentioned before that we have bipartisan
consensus on hawkishness towards China.

{{00:08:58}}
But I think what we're also
seeing is that there's a real

{{00:09:02}}
difference in degree and in scope.

{{00:09:05}}
In that sort of hawkishness.

{{00:09:06}}
So Kamala Harris is most likely to
continue Biden era policies, right?

{{00:09:10}}
Of being tough on China, strong on
China, pledging support towards Taiwan

{{00:09:14}}
and continuing Biden era tariffs.

{{00:09:16}}
What Donald Trump has proposed, however,
is 60 percent tariffs on all Chinese

{{00:09:20}}
imports across the board, right?

{{00:09:22}}
That's not something we've
ever seen in recent history.

{{00:09:25}}
And whether or not that actually gets
implemented how the Chinese react to

{{00:09:28}}
that will have crucial consequences.

{{00:09:31}}
Not just for the U.

{{00:09:32}}
S.

{{00:09:32}}
China relationship, but for
the world economy at large.

{{00:09:35}}
There's a lot that everybody
needs to prepare for.

{{00:09:37}}
Manas, thank you so much
for joining me today.

{{00:09:39}}
Thank you, Lili.

Manas, thank you so much for joining
me at RiskMinds America this year.

Tell me, in the last stretch of
2024, what events should financial

I mean, we've got just a few months
to go before the end of the year, but

I think the one thing that's already
on everyone's minds, and rightfully

And this race has been possibly
more uncertain than any race we've

I think, you know, financial
institutions should be watching

What does each candidate's
victory mean for them?

But two, and I think this is overlooked,
there should be scenario mapping.

What are some of the sort of, you know
black swan events that could happen?

Some of the third possibilities that might
pose risk and trouble for them, right?

One example, which I think is
increasingly likely with how close

this election will inevitably be is
what happens when one side doesn't

What happens when some state takes
hours or days longer to count its vote?

And, you know, one political party uses
that to claim falsely that it's won the

And thankfully we averted sort
of the worst consequences.

But we've seen what
happens in January 6th.

And a rerun of that is
increasingly likely.

Particularly as we edge towards a
political situation in the United States.

Where winning the national sort of
popular vote isn't nearly enough.

In fact, you could win that by a
margin of up to 7 million people now.

7 million people because there's
so many excess votes piled up of

And you could still lose the
electoral college, right?

And what implications does this
have for American foreign policy?

Second thing is this race has
been so dominated as a race of

personalities that we're forgetting
that there's also an election for,

And what the makeup, sort of the
makeup of that turns out to be will

shape significantly how much leeway
either candidate has in terms of

implementing its policies primarily also.

Even if Harris wins, it's still to be seen
if she has enough support in Congress to

pass another massive military aid package.

And speaking of Ukraine, I think one
event that can that, you know, financial

institutions should look out for, for
the future of that country and for

the future of Europe is what happens
next in its invasion of Russia, right?

Ukraine has now captured about
500 square miles of land in

However, those supply lines are
really, really stretched right across

Does it divert some more
of its troops there?

Does it keep pressuring on in the Donbas?

What is the understanding on either
side about the possibility of a

All of these things will define where this
conflict is headed in the next few months.

And I think it will be a really important
resolution, not just for Ukraine and

So, So we've just talked about
foreign policy and the potential

outcomes for either of the candidates,
but what about things like tech

What about how the regulations
for that, what do you think

I mean, artificial intelligence is
the buzzword on everyone's lips, not

just at this conference, at every
conference I've been to, right?

But the really interesting thing
is I think people overlook the

political dimensions of AI development
of deployment of regulation.

And I think that's where a lot of
the really interesting trends are

happening and also where a lot of
the hurdles and challenges will be to

If you look at the election
cycle, we've seen something

For years we thought of San Francisco,
of California, of these tech elite as

squarely within the Democrat camp, right?

Now you see a faction where
that's not so much the case.

Notable sort of Silicon Valley
investor and tech mogul.

That is playing a really
key role in this election.

Pledging 45 million dollars
to Donald Trump's campaign.

The highest, perhaps, that
we've seen in election history.

Peter Thiel also introducing
Donald Trump to JD Vance, right?

They're playing really pivotal
roles because they have an agenda.

Not for pure altruistic reasons,
but also because their agenda

These people that are in charge of
companies that you know, contribute

to the deployment and development
of AI, want a light touch approach

And that's also the case and we
talked about sort of other tech

trends and antitrust that we're
seeing on the Democrat camp, right?

The Democrats are also the party of
big money, they have big tech donors,

and some of these, you can think of
Reid Hoffman, the LinkedIn guy are

vociferously advocating for lighter
touch antitrust approach, right?

You've got Lena Khan the loss of these
tech investors almost across the board

RiskMinds & QuantMinds

Expert Insight

In this insightful conversation, Manas Chawla, CEO of London Politica, discusses key geopolitical events and their potential impacts on financial institutions as 2024 draws to a close. Topics include American elections, the Ukraine conflict, AI regulation, and financial regulatory policies. Manas also highlights possible scenarios in 2025, including geopolitical risks, macroeconomic challenges, and the U.S.-China relationship, providing crucial guidance for financial institutions. 