With US treasury professionals increasingly disillusioned with the current performance of both Republican and Democrat politicians on Capitol Hill, delegates at the AFP conference in Las Vegas were treated to an opening address by a leading figure from for four past administrations. General Colin Powell offered them his blueprint for leadership from the insights he gained and the lessons he learned while serving in the top ranks of the military and in four presidential administrations.
Powell, who has already enjoyed one bestseller with his memoir, ‘My American Journey’, last year published a follow-up volume, ‘It Worked for Me’, in which he describes the principles shaping his life and career. This included the controversial period that led up to the 2003 US campaign in Iraq and the toppling of its dictator, Saddam Hussein.
Powell has become famous for his 13 basic rules of leadership, which he has expounded upon since they were first published in a US magazine nearly 25 years ago:
- It ain’t as bad as you think.
- Get mad, then get over it.
- Avoid having your ego so close to your position that when your position falls, your ego goes with it.
- It can be done.
- Be careful what you choose. You may get it.
- Don’t let adverse facts stand in the way of a good decision.
- You can’t make someone else’s choices.
- Check small things.
- Share credit.
- Remain calm. Be kind.
- Have a vision.
- Don’t take counsel of your fears or naysayers.
- Perpetual optimism is a force multiplier.
He singled out the first and last of these as those with the greatest relevance to financial professionals. As with an army, an organisation assembles its various forces to maximise their effect, but optimism “which can’t be replicated by a machine” strengthens it further.
Powell outlined his post-political career, of which public speaking has played a major role, and said that he had learned much about organisations in the process. “Treasurers need to have the moral fortitude and courage to speak out when they know something within the organisation isn’t right,” he told his audience. “They perform an essential role in maintaining the stability of US financial institutions.”
He also remarked on the American spirit of optimism that prevails despite the country’s fiscal and social problems. “Our country works because people feel strongly about issues, but still find a way to compromise,” he told his audience.
“Congress today is so stuck that it doesn’t recognise that it’s compromise that moves us forward and its current attitude certainly isn’t what our founding fathers had in mind. We’ve got to fix our budget and we’ve got to fix our fiscal situation. People around the world are watching us and saying that America used to lecture us on these very same issues.
“Perhaps they’re no longer the example that we should be following. So we must make Congress understand that people are looking for leadership”
Powell also briefly mentioned another current fiercely debated issue when debating the work of America’s Promise, the organisation that he set up in 1997 to help underprivileged youth.
He said that he didn’t want to get involved in the discussions on ‘Obamacare’, but nonetheless: “The US should be able to offer universal healthcare to all of its citizens in the same way that our Canadian neighbours are able to.”
Speeding up Payments
Earlier in the day, among the opening events was a Bank of America Merrill Lynch (BofA Merrill)-sponsored payments roundtable, introduced by Ather Williams, head of global payments at the bank’s global treasury solutions (GTS) group. He told his audience that the bank had reviewed different payments systems around the world and believed that co-operation was key to the evolution of payment systems, particularly if the resulting benefits were to accrue equally to all of the parties involved.
Away from the US, many innovations – such as the UK’s faster payments scheme, which marked its fifth anniversary last May – had resulted from government intervention. It was now time for the US to reconsider its approach, but this would require time, energy and resources. It was also vital to achieve an end-to-end enterprise view of payments in which payer and payee agreed on the method, timing and costs.
The dialogue has at least got underway. Last month saw the issue of ‘Payment System Improvement’, a public consultation paper issued The Federal Reserve Banks, and a large proportion of the audience said they had read its contents – in a number of cases several times. As speaker Claudia Swendseid, senior vice president (SVP) at the Federal Reserve Bank of Minneapolis noted for the past 100 years the Fed main focus had been on ensuring that the interplay between financial institutions (FIs) was secure, efficient and accessible.
Provided these goals were met, the interests of the end users of payment systems were deemed to be well-served.
However, the Fed had more recently changed its stance, reaching out to these end users and talking to them on what areas of the system would benefit from improvement. Those who have read the consultation paper are invited to share their thoughts on http://fedpaymentsimprovement.org.
A central section of the paper (pages 3-4) outlines the various gaps in and potential improvements to the current system that the Fed has so far identified.
As an audience member noted, many countries have made greater progress than in the US in their electronic payment (e-payment) systems thanks to the influence of their central bank. From several aspects, including security and standardisation, the multiplicity of different had acted as an obstacle.
Standardisation of payment formats had recently become highly topical and were the Fed able to persuade local banks to adopt an internationally-recognised standard such as ISO 20022, this would enable the US to become more in sync with local markets. However an audience member commented that extended remittance information (ERI), launched in the US a couple of years ago, also offered efficiencies via standardisation but to date take-up had been low.
“So the question is, would it be easier for the US to work on its legacy systems and to make them better, or to move into the future and adopt a standard such as ISO 20022?” asked Swendseid. The consensus was that standardisation appears the best way to go – but the interests of many different parties as well as many different areas that need to be considered.
As she concluded: “It seems that people still want a large degree of diversity and choice. So more standardisation of payment systems is a good thing, but it can’t be a case of ‘one size fits all’ though.”
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