One on One with NASDAQ CEO Robert Griefeld
Wednesday, January 07, 2009
|
|
|
|
SUSIE GHARIB: Even though it was a rough day for the markets, the head of the NASDAQ is upbeat about the outlook for 2009. Earlier today I sat down with CEO Robert Griefeld at the NASDAQ market site in Times Square and he explained why he's optimistic.
ROBERT GREIFELD, CEO, NASDAQ: There's certainly vast amounts of cash on the sidelines trying to figure out when we've hit bottom. When has the knife actually hit the table? So I think we'll see some turn in the market in 2009.
GHARIB: Bob, investors have lost so much confidence in the markets and in financial institutions. What's it going to take to restore investor confidence?
GREIFELD: First off, there is no magic cure. But you need to see sustained economic progress. So if companies are producing results on a quarter by quarter basis, that will be reflected in the stock price and that movement of stock price will attract more and more investors into the marketplace.
GHARIB: I understand that the NASDAQ has relaxed its listing requirements for companies that have been struggling because of the financial crisis. It's understandable what you're trying to do. But do you think that that leniency reduces investor confidence?
GREIFELD: No, I think one is, we have to protect investors so they have their money invested in these companies and these companies by and large are good, solid companies that have been victimized by the credit crisis and the economic times that we live in. And to the extent we de-list these companies, there will definitely be a diminishment of value of these companies. Investors will be harmed so it's our actions we'll hope -- our hope is that this will protect investors, their investment in these companies and give them time to be properly priced in a more normal economic environment.
GHARIB: Everyone is talking about the Obama administration coming up with new rules, reforms for the financial markets. Does that increased government scrutiny concern you?
GREIFELD: I think we need to go at it with a spirit of re-regulation as opposed to new regulation. And we have to make sure that the regulation that we're focused on is material, that that matters. We have got to make sure we're focusing on the big issues and focusing on certainly situations where there's big problems in the marketplace.
GHARIB: Bob, as a reporter I feel obliged to ask you about Bernie Madoff. What do you say to people about his connection to the NASDAQ? Many investors were surprised to hear that he was once chairman of the NASDAQ and he played a key role in the founding of the exchange.
GREIFELD: It's certainly something we're not proud of right now. But it's important to recognize it was many years ago. NASDAQ was not a free standing enterprise back in 1990. It was an advisory committee. Do we wish he had not been the chairman of that advisory committee? Yes, of course we do.
GHARIB: What do you think should be done to prevent the Bernie Madoff scandals in the future?
GREIFELD: We need certainly an enlightened regulatory effort in the marketplace and a very rigorous, you know, continuing effort.
GHARIB: What do you think is the most important thing President-Elect Obama needs to do to restore the health of our markets and the economy?
GREIFELD: We believe between the stimulus package that incoming President Obama will recommend and the actions that have been taken between the Fed and the Treasury to really bring liquidity into the system and to unfreeze the financial world, will have a positive outcome from that.
GHARIB: Let's talk a little bit about the future of the NASDAQ. Where do you see growth coming from?
GREIFELD: NASDAQ was formed in 1971 to bring automation to the over- the-counter cash equity marketplace. In 2009, we're going to bring that same level of automation to the over-the-counter interest rate swap marketplace so just as NASDAQ grew tremendously over the intervening 36, 37 years, we think we have great opportunities to grow as we bring some of the formative structures that exist in our marketplace to this derivative as well.
GHARIB: What are your expectations for this new derivatives business?
GREIFELD: When you look at the over-the-counter derivatives marketplace today, it dwarfs -- the listed derivative marketplace, so as big and as powerful as CME, CBOE, NYMEX, ICE are in their chosen fields, recognize beneath the surface the over-the-counter market is five or six times that size, so we're going to bring that level of automation to a market that size. It's kind of inconceivable that we sit here in 2009 to recognize that we have such large markets that are completely unautomated, unformed, without a known rule set and that's going to be a great growth opportunity for us.
GHARIB: There's been almost no activity in initial public offerings. Do you see that changing in 2009?
GREIFELD: We certainly hope. We have a large number of companies in the backlog. They are waiting for the right opportunity. It's impossible for me to predict when that opportunity might happen. But I think as we wax on in 2009, the odds increase that these very qualified companies will have the ability to come to market.
GHARIB: Bob, thank you very much and happy New Year.
GREIFELD: Thank you. It's my pleasure to see you again.
