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CME Group’s Terry Duffy discusses GFLC

6 min read

Modern Money

Terrance A. Duffy

Terry Duffy is the Executive Chairman and President of CME Group, which is hosting its annual Global Financial Leadership Conference next week in Naples, Fla. Mr. Duffy chatted with SmartBrief and shared more background on the GFLC.

1. What is the goal of the GFLC? How did it get started?

The Global Financial Leadership Conference is an exclusive event that brings together decision-makers from the world’s leading financial institutions to discuss emerging geopolitical trends, debate critical economic issues and share perspectives on future developments in the financial marketplace. Our goal in developing GFLC was to provide a venue for some of the brightest minds in business, economics, media and politics to have a dialogue about current issues and risk in our global economy. As our record attendance this year demonstrates, we’ve been very successful in doing that. Since our inaugural conference in 2008, GFLC has established itself as the “Davos of Derivatives,” becoming one of the most important events for our industry leaders.

2. What is the most important thing the GFLC tries to provide each year?

Thought, discussion and perspective are key takeaways from this conference. By bringing together our very top customers, all of whom are leaders in their own right, and enabling them to interact with renowned leaders from other areas of business, finance and politics, this conference facilitates new thoughts and ideas for dealing with the challenges ahead. It’s a good place to get inspired and network. And, with our CME Group Titleholders ProAm and LPGA Tournament at the end of the week, it is a lot of fun too. This is our sixth conference, and many people have come all six years because it’s exciting, it’s informative, and it’s a rare chance to hear directly from leading voices. There’s nothing else like this for the industry.

3. Last year’s GFLC came one week after the presidential election, so there were many luminaries from the world of politics. This year’s agenda seems to have a bit more of an international focus. Is there any theme you can attach to this year’s event?

Global politics, policy, and regulation are always big considerations for markets, for better or worse. We always try to feature speakers and participants who can share the most relevant perspectives and recent developments with our attendees. Last year was an election year so there was a big focus on the state of U.S. politics. This year, politics continue to be center stage. We’ve seen the gridlock in the U.S. cause a government shutdown, and the state of the Eurozone continues to be a concern as well. On the first day of the conference Gordon Brown, the former Prime Minister of the U.K. and a current member of British Parliament, will give his outlook for the E.U., and we have a panel of European central bankers who will give insight as well. Then we have a discussion with Gary Becker, the Nobel prize-winning economist, about his global economic outlook and how global events in different regions impact markets in all regions. And, I am especially pleased that the 67th U.S. Secretary of State Hillary Clinton will deliver our opening keynote. Who better to provide insight into the state of Washington as well as the global community? So there is a global focus, but it all centers around the idea of how markets are more interconnected than ever before.

4. One of the panels at the GFLC is called “From Risk to Resilience: The Global Mission to Secure Cyberspace.” What kind of interaction between business and government agencies, if any, is needed to secure today’s global exchanges?

This will be a particularly interesting and timely discussion. In part because those on the panel have worked in the highest levels of security, and have looked at the most significant cyber threats of all kinds, not just those that affect financial exchanges. It includes Patrick Fitzgerald, the former U.S. Attorney; Tom Ridge, the former Secretary of Homeland Security; Kevin Mandia, a global expert on cyber security; and it will be moderated by Aneesh Chopra, the former CTO of the United States. The panel will be addressing the threats to exchanges, but maybe not in the way those of us in the futures industry are used to thinking about them.

You have some former government officials on this panel. We want their input, and when it comes to these issues, I think it’s necessary for government agencies and business to work together to determine the safest, most fair solution within the technological framework that we have. Our industry has created game-changing innovations in recent years when it comes to the availability to trade across borders. That’s brought more people into the marketplace, and that’s a great thing. But it’s also created more complexity and, in turn, risk. Our company has created the industry standard safeguards for electronic markets to ensure that they run efficiently, that technical problems and human error are mitigated. But as an industry, we must also continue to be vigilant in making sure our financial systems are secure. There’s an economic cost and there’s a human cost if something goes wrong, so government and business must absolutely work together on the best solutions.

5. This year’s GFLC is honoring Sal Khan, the founder of the Khan Academy, and you also wrote in the Wall Street Journal about the recent decrease in financial firms’ ability to recruit Ivy League graduates. How can financial firms interact with education to enhance the future of markets?

Not that long ago, the smartest people in America were drawn to Wall Street. Not just recent Ivy grads, but tenure-track PhD’s in mathematics and economics, even chemists and physicists. All the young people who watched the financial crisis are now entering the job market. Many are of the view that the system seems rigged. Today’s smartest youngsters face a very different world: college debt, joblessness, living at home – even for those with elite credentials.

We need to reach out to the next generation and make a better case for finance through markets that trade on fundamentals. There needs to be a voice for financial services in America’s best classrooms that can show the power of business to lead reforms and contribute to social change. Among the thousands of courses at Khan Academy are several that are teaching financial services. That’s a huge step in the right direction. And, I think what Sal Khan is doing to provide broad-based, accessible education on a number of subjects is critical. He is changing the model of education.