Stan O’Neal interview: O’Neal accentuates the positives
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Stan O’Neal interview: O’Neal accentuates the positives

When Stan O’Neal spoke at the Euromoney Forum in London in late June, concerns about the fallout from the sub-prime correction were at their height. In a wide-ranging interview with Euromoney’s editor, Clive Horwood, Merrill Lynch’s chairman and chief executive discussed the market’s reaction to sub-prime, and whether or not the contagion would spread.


 Stan O’Neal, Merrill Lynch’s chairman and chief executive

Stan O’Neal, Merrill Lynch’s chairman and chief executive

The O’Neal era Merrill ethic 

As well as discussing the risks in the market, he outlined why the long-term prospects for investment banking are bright: how global capital flows are opening new markets and providing a new resilience to financial markets; and how the role of an investment bank as an intermediator of capital will grow in both developed and developing markets.

Everybody seems to be expecting a downturn in financial markets. When will it come?

Let’s start with the positives, because out of the positives come some of the concerns for risk. There’s growth in virtually every part of the world simultaneously, and reasonably healthy growth. Wealth is being created in the process, so there’s also lots of liquidity. At the same time markets have become much more interconnected, and there’s a freer flow of capital. Increasingly sophisticated investors are directing more and more of the flows. The upshot is that there are a lot of opportunities across asset classes that did not exist perhaps just a few years ago.

The corollary is that some liquidity finds its way into asset classes in outsize proportion, so you can get distortions in those asset classes.

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