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With many of his company's financial industry clientele enveloped in gloom and uncertainty, Thomson Reuters Corp. CEO Tom Glocer gave his read on the banking and credit crises at a London investor presentation Thursday. Glocer acknowledged that there will be short- and midterm pain for the financial publishers and data providers that serve these banks and firms, but insisted that there is also a silver lining.
"No matter what the news is day to day here, the idea that there won't be a very important global intermediated finance business is absurd," he said. A consolidated Wall Street "looks like a sort of return to the banking giants of the 1980s," he said. These banking behemoths will be giant consumers of his company's services. Thomson Corp. acquired Reuters Group plc earlier this year for $17.59 billion to form Thomson-Reuters. While it has high exposure to the finance industry, it also has legal, tax, science and health divisions that offset the markets business. "This is a dramatically different business today than the business that [markets division CEO] Devin [Wenig] and I took through the dark days of 2002 and '03," he said, referring to the last major downturn. "In general the crisis is of course much deeper, much more serious than it was, but it is affecting different parts of the business." Thomson-Reuters foreign exchange business is "seeing record days as people run in and out of the U.S. Treasury markets seeking a haven. "The legal business in the States is going to be fantastic for the next several years as everyone sues the hell out of each other and the reorganization practices are beginning to staff up," he said. The executive also predicted a greater demand for transparency and understanding investments and balance sheets, which would drive more business. "On the other side of this, when Congress stops fighting among themselves, we are going to see an unbelievable increase in regulations," he added. There will be new rules for capital markets and banks that companies will have to interpret. And there will be investigations into what went wrong. "This is going to be the mother of all investigations. There are literally thousands of prosecutors across America who are going to make their name. They are the next Giuliani, and they are going to sue, sue, sue," he said. While he might not like it as a citizen, it suited him fine as a legal publishing and data executive. "It might not be a whole lot of fun to manage through a period like this," Glocer conceded about the new era, but there are opportunities for financial publishers and data providers at the other end of the cycle. - Chris Nolter Thomson Reuters' investor day Web cast Categories Deal Video
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