Finance
The Problem With Finance Is the Problem of Capitalism
It is today all but taken for granted by political figures from Hillary Clinton to Bernie Sanders that the rise of finance in recent decades has come at the expense of industry. Such views are similarly widespread among critical political economists, perhaps most prominently Robert Brenner and Cédric Durand. Its rise, says Durand, is “rooted in the exhaustion of the productive dynamic in the advanced economies, and the reorientation of capital away from domestic productive investment.” According to this view, “real” industrial capital has been overtaken by the “fictitious” activities of finance. The rise of the latter is a symptom of a “late” stage of capitalism, a harbinger of the system’s dysfunction and decline.
For Brenner and Durand, the rise of this corrosive financial sector has crucially depended on its ability to capture the state — leading to the formation of what Brenner and Dylan Riley have gone so far as to call a new form of capitalism, “political capitalism.” According to these theorists, this has perhaps above all been evident in the Federal Reserve’s decades-long quantitative easing (QE) policy: “uninterrupted monetary infusions from central banks,” which Durand sees as the result of “blackmail” by a corrosive financial sector.
In a widely read and cited recent essay, Durand has speculated that we are now witnessing the “end of financial hegemony.” This is because the return of inflation has created an irresolvable contradiction: while continuing quantitative tightening (QT) to control inflation would terminate the state support that has been essential for propping up financial power, allowing inflation to continue would also undermine finance by eroding asset values and reducing real interest payments. In fact, as we argue in our new book, The Fall and Rise of American Capitalism: From J. P. Morgan to BlackRock, every part of this framing is wrong or misleading. The rise of finance in no way came at the expense of industry; on the contrary, it strengthened industrial capital. Financialization has facilitated the construction of highly flexible, global networks of production and investment. This has intensified competitive discipline on industrial corporations to maximize surplus value extraction and reduce costs. The structural role of finance in contemporary capitalism makes it hard to see either inflation or monetary tightening as posing a fatal threat to its power.
And far from what Brenner has seen as the “escalating plunder” of the state by financial parasites, QE was implemented by a significantly autonomous Federal Reserve acting to meet the systemic imperatives of capital accumulation. This state-led restructuring has led to the historically unprecedented concentration of ownership in the “Big Three” asset-management firms: BlackRock, State Street, and Vanguard. Far from being separate from industry, this has culminated in a novel fusion of financial and industrial capital that we call “the new finance capital.” Critically, the ownership power of these asset managers has actually been strengthened during the current period of QT and high inflation. Durand’s insistence that financial hegemony is coming to an end is thus unpersuasive.
This is no mere academic exercise: our understanding of the relationship between finance and industry has important political implications. Framing finance as separate from or opposed to industry can be taken to suggest that workers should form an alliance with industrial capitalists — their bosses — to rein in a corrosive financial sector. Yet if finance and industry are deeply entangled and mutually interdependent, then the target of left-wing strategy should not be just “financialization,” but capitalism itself.
Our goal, made more important than ever by the worsening ecological emergency, should not be to find ways to increase regulations on finance in order to restore the supposedly “good” industrial capitalism of the postwar period, but rather imagining and constructing a new form of democratic economic planning: gaining control of investment by transforming the state and developing the capacities within it to run finance as a public utility.
Durand is correct that state intervention following the 2008 crisis was enormously significant. But what have its actual systemic functions and historical implications been?
This intervention was not the result of the instrumentalization of the state and the plundering of its coffers by financial institutions, as Durand implies. Rather, they were the product of a relatively autonomous state seeking to resolve a systemic economic crisis and support accumulation as a whole — acting not at the behest of particular firms, but in the interest of the financial system. It was these interventions, and in particular the continuous extension of QE over a decade and a half by the Federal Reserve, that led to the historic shift in the structure of corporate capitalism that became the new finance capital.
QE involved the Fed purchasing large quantities of assets and generating enormous liquidity through the creation of central bank reserves. While this aimed to provide cash to financial institutions, it was primarily about supporting the market-based credit system that had evolved over the neoliberal period.
At the center of this system were repo markets, on which financial institutions accessed short-term cash in exchange for collateral assets. The most important collateral, and therefore the basis for credit generation, were Treasury bonds and mortgage-backed securities. In order for the system to work, financial institutions had to see these assets as safe. Once the value of mortgage-backed securities was thrown into doubt, lending on these markets seized up, and financial institutions were unable to access liquidity.
By purchasing mortgage-backed securities, the Fed backstopped their value, thereby de-risking them and supporting repo markets. As the Fed absorbed what were seen as the safest assets, especially government bonds, it pushed financial institutions to purchase other assets, especially stocks and corporate bonds.
The large flood of money into the stock market drove a steady, across-the-board rise in equity prices. With a rising tide lifting all boats, it became harder for actively managed investment funds — which attempt to “beat the market” by strategically trading — to justify their high management fees. The result was a large-scale shift of investment into passively managed funds, which trade only to reflect the shifting weight of firms in a given index and can thus offer very low fees.
Before 2008, three out of four US equity funds were actively managed; by 2020, more than half were passive, with nearly $6 trillion in assets under management (AUM). This concentration was especially centered around the Big Three, and BlackRock in particular. Between 2004 and 2009, BlackRock’s AUM grew by a barely believable 879 percent.
These firms are also incredibly diversified. They are, collectively, the largest or second-largest holders of companies that comprise 90 percent of total US market capitalization, including 98 percent of the S&P 500. Moreover, they hold an average of more than 20 percent of each of these firms — reversing the long-standing trade-off between ownership strength and diversification, whereby the weight of holdings tends to decline with increasing diversification (“diluting” holdings across a wider range of firms). Asset managers have become strong owners in practically every publicly traded firm, including other large owners like the big banks.
This extent of ownership concentration, centralization, and diversification is unprecedented in the history of capitalism. Yet this regime remains intensely competitive. Asset managers compete with each other, as well as with all other outlets for savings. To attract capital, they must offer the highest returns and the lowest risk, imposing strict limits on the fees rates they can charge. Therefore, asset managers must grow their profits by maximizing AUM, since their fees are typically calculated as a percentage of this. They do so by accumulating assets as well as by increasing the value of assets they already hold.
But since the passive funds managed by these firms are highly illiquid, unable to trade other than to track a particular index, they cannot simply dump shares of underperforming companies. Instead, asset-management firms directly pressure the managers of their portfolio companies to maximize competitiveness and asset values — attenuating the distinction between corporate ownership and control.
Asset-management firms have effectively become permanent and active owners of all the largest and most important corporations in the economy. These relationships are organized through the asset managers’ “stewardship divisions,” which centralize oversight of industrial corporations. This includes coordinating share-voting strategies, collaborating with portfolio companies on governance reforms, influencing board composition, approving executive compensation, and supervising strategy.
Their large blocs of ownership ensure that asset management companies have the ear of management and are able to engage in routine “behind-the-scenes” coordination — backed by the possibility of exercising share-voting rights, which they have not been shy about doing when necessary. As Rakhi Kumar, head of corporate governance at State Street, put it:
Our size, experience and long-term outlook provide us with corporate access and allow us to establish and maintain an open and constructive dialogue with company management and boards. The option of exercising our substantial voting rights in opposition to management provides us with sufficient leverage and ensures our views and client interests are given due consideration.
Yet the metrics Durand deploys — the balance of profits between the financial and industrial sectors, the liquidity in the financial system, and asset values — do not include the structure of corporate ownership. So he ends up missing one of the most important foundations of financial power: unprecedented concentration of ownership of industrial capital by the Big Three asset-management firms.
As a result, Durand’s assessment of the decline of financial hegemony falls wide of the mark. Though QE was essential for the initial formation of finance capital, its existence and dominance does not necessarily hinge on QE continuing. In the current context of market volatility and QT, it is likely that the relatively safe, diversified, and extremely low-cost passive funds managed by the giant asset-management firms will remain competitive. Indeed, these funds have continued to grow strongly — poised to surpass actively managed funds worldwide this year. Although the profits of the asset management companies have declined and inflows into passive equity funds have slowed, as would be expected in a bear market, the continuation of ownership concentration and centralization suggests that the power of these firms is actually increasing, not deteriorating.
The formation of finance capital has also reinforced the consensus among the capitalist class around globalization. Contrary to some wishful thinking, these “universal owners” cannot lead the decarbonization of the economy or serve as the basis for a new social democratic class compromise around expanding the welfare state. Far from displaying a willingness to sacrifice the profitability of individual firms in service of the general interest of the system as a whole by forcing them to “internalize externalities,” asset-management firms have an incentive to maximize the competitiveness of individual portfolio firms. Insofar as corporate competitiveness is bound up with free capital mobility — allowing corporations to circulate investment around the world in search of the highest returns — the interests of asset management firms are tied to this as well.
The deepening of globalization through the elimination of barriers to capital mobility, especially the liberalization of exchange rates and capital controls, both empowered finance and helped resolve the 1970s crisis by aiding in the restoration the profitability of industrial corporations. The construction by multinational corporations of flexible and dynamic cross-border networks of production and investment depended upon the creation of an internationally integrated financial architecture dominated by large US financial institutions.
The globalization of capital therefore meant that finance became more central to the structure of accumulation and more politically powerful. However, because nonfinancial corporations themselves benefited from this, they ultimately accepted finance’s dominance. The interests of financial and industrial capital became ever more closely entangled over the ensuing neoliberal era.
Financialization was further entrenched by the deeper restructuring of the nonfinancial corporation during this period. Through a series of adaptive responses to the challenges posed by diversification and globalization, top managers increasingly became investors, circulating money-capital among competing corporate divisions, operations, and facilities based on their ability to generate monetary returns.
While investment was centralized, operational control was decentralized to self-contained business units that competed for investment from top executives. The formation of capital markets within the corporation in this way enhanced discipline toward cost-cutting, efficiency, and profit maximization. The difference between financial and nonfinancial firms therefore became blurred, as the fusion of financial and industrial capital — finance capital — was consolidated within the nonfinancial corporation itself.
Far from being rooted in “the exhaustion of the productive dynamic,” financialization and globalization enabled the restoration of industrial dynamism . In this context, Durand’s implication that domestic investment is “productive,” despite being hampered at that moment by a profit squeeze, in contrast to apparently unproductive or speculative investment in “globalized production chains” — which he admits enabled the exploitation of “cheaper labour” and brought “higher returns” — is confusing. In effect, Durand appears to identify the entire process of globalization as simply unproductive. While he is correct that this process led corporations to rely upon derivatives in order to manage the risks associated with globalized production, this only demonstrates how critical these financial instruments are to production and thereby points to the problems with seeing them as simply “fictitious capital.”
In any case, the financialization of the nonfinancial corporation did not simply begin in the neoliberal period, but at the height of capitalism’s “Golden Age.” It was spurred not by industrial decline, but by the accumulation of large pools of retained earnings by industrial corporations, itself the result in part of weak investor discipline on these highly profitable firms. Rather than let these cash pools sit idle, industrial firms circulated them as interest-bearing capital, becoming by the 1960s the largest lenders on commercial paper markets. Industrial firms were also the largest borrowers on these markets, which served as an important source of financing for industrial operations. In this way, financialization enabled the redistribution of the retained earnings accumulated by large corporations across the economy, supporting industrial profitability.
It is incorrect, then, to say that financial hegemony emerged as a result of declining industrial profits, supposedly leading capitalists to divert investment toward speculative financial services. Nor have the subsequent neoliberal decades of financial hegemony been characterized by declining corporate profits, investment, or spending on research and development (R&D). It was during the 1980s and 1990s that the cutting-edge high-tech firms that dominate the global marketplace today, like Apple and Microsoft, emerged. Indeed, R&D spending actually grew as a percent of GDP throughout the neoliberal era.
Meanwhile, corporate investment sharply increased relative to GDP, significantly diverging from the postwar norm. And this increasing investment yielded a tremendous boom in the mass of nonfinancial corporate profits. While financial profits grew more quickly, this did not come at the expense of industrial investment, profitability, or competitiveness.
To be sure, financial hegemony is reflected in the larger share of the surplus captured by financial institutions through share buybacks and dividends. But this is in no way a sign of industrial decline. On the contrary, that corporations are making high profits, partly as a result of financial restructuring, means that they are able to both reinvest in production and return unneeded cash to shareholders. Such financial gains can then be reinvested elsewhere.
In the postwar years, industrial corporations themselves circulated surplus cash as interest-bearing capital, earning financial returns; today, they also distribute a share of their high profits to financiers to invest across the economy. Neither of these represents a more dysfunctional capitalism — the difference simply reflects the changing structure of corporate organization and capitalist class power.
The rise of finance is not a symptom of industrial decline, but a condition for industrial competitiveness. As financialization facilitated the movement of capital into and out of sectors, facilities, and countries, competitive disciplines to maximize returns across all investments was intensified. The interpenetration of financial and industrial capital highlights how problematic it is to see finance as a “deadweight” on capitalism — and makes it hard to imagine how financialization could be reversed.
Durand’s “fork against finance,” in which either the implementation by central banks of a restrictive monetary policy or the continuation of mid-level inflation amounts to “a choice between apoplexy and slow-motion agony” seems largely imaginary. For one thing, Durand fails to convincingly demonstrate that inflation is entrenched, and that the combination of declining asset values in relation to industrial profits is not merely cyclical. Indeed, inflation now seems to be abating.
Nevertheless, Durand is right to highlight the possible trade-off faced by central banks between controlling inflation, on the one hand, and maintaining financial stability and asset-price appreciation, on the other. But there is no reason to believe that central banks cannot navigate such contradictions, avoiding a full-scale crisis while maintaining the overall policy of monetary tightening to bring down inflation. In this respect, if Durand overestimates the intractability of the dilemma between monetary and price stability, he underestimates the capacities and autonomy of central banks, as well as the importance of controlling inflation for a financialized global capitalism.
Nor is there a clear contradiction between the current regime of finance capital and QT. Indeed, BlackRock CEO Larry Fink called for monetary tightening and insisted that the Federal Reserve would have to change policy before Fed chair Jerome Powell did so (who was insisting at the time that inflation was merely “transitory,” and that there was no need for a sharp hike in rates). This is the precise inverse of the dynamic one would expect from Durand’s argument: central bankers pushing to continue easy money and powerful financial firms calling for tightening. There are structural reasons that asset managers would want to control inflation, first among which is that they are dependent on the competitiveness of the industrial firms they own.
BlackRock and other asset managers not only manage equity funds, but they are also central institutions within the shadow banking system. If the profits these firms receive from their equity funds have been diminished by the falling stock prices that are the result of tightening, their cash-management operations and other investments have simultaneously become more profitable, though these make up a smaller proportion of total revenues.
There is every reason to believe, therefore, that the Big Three will emerge from the current bear market in an even stronger position. While profits may have temporarily dipped, they are by no means at a crisis level, and are supported by diversified holdings and operations; meanwhile these firms continue to accumulate assets and ownership power.
There is certainly a risk that monetary tightening will lead to a liquidity crisis or a stock-market crash creating widespread financial panic. But finance could well emerge from a crisis in an equally strong or even stronger position, as occurred after 2008. To begin with, this would presumably end the current bout of inflation. And while such a crisis would demand extraordinary state intervention, there is no reason to conclude that this would exceed the capacities of central banks.
The broader problem with suggesting that financial hegemony is collapsing on its own is that it blocks us from seriously thinking about how to deal with the very real obstacles that finance poses for working-class and environmental struggles. Similarly, framing finance as merely “fictitious” or a “deadweight” can imply — as William Lazonick, Elizabeth Warren, and other social democrats explicitly argue — that “productive” industrial capitalism can be restored by simply reining in a corrosive financial sector.
But it is simply not possible to separate industrial capitalists, who have been supposedly victimized by financialization, from financial capitalists who are said to have benefited from it. The effect in both cases is to downplay the challenge and the urgency of addressing the accumulating social and environmental harms inflicted by global capitalism — and the need to build an alternative.
Jeffrey Epstein was on a mission to meet with Vladimir Putin when an intriguing proposal dropped into his email.
The Russian president was ready to receive Epstein, according to an October 2014 message from a correspondent on a database of more than 3.5 million files belonging to the late convicted sex offender that have roiled global politics and business.
“I spoke t= Putin,” wrote the interlocutor, whose identity has been redacted by the US Department of Justice. “He would be very glad if you were to visit and explain=financial markets in the 21 st century. Digital currency. derivative= structured finance. I would set up the meeting when you are next in=Europe. I am sure you two will like each other.”
Hours later, Epstein forwarded the message with a request for advice to Kathy Ruemmler, who’s stepping down as Goldman Sachs Group Inc.’s general counsel after details of her association with the disgraced financier emerged in the files released by the Justice Department.
In his response, Epstein anticipated that her advice would be not to go “for the moment” and that was in fact the case. Ruemmler’s reply was brief: “Yes my answer is still the same,” she wrote. “Your fun i= denied.”
The caution at that point was understandable. Months earlier, Putin had sent Russian troops to annex Crimea from Ukraine, prompting wide-ranging US and European Union sanctions and sparking the geopolitical crisis that has since spiraled into the largest conflict in Europe since World War II.
Epstein’s fascination with Putin and Russia was undimmed, though, even as the documents paint a picture of a man who appeared largely clueless about who had genuine power and influence with the Kremlin leader. The files show a years-long effort to secure a one-on-one meeting with Putin, whose name appears about 1,000 times in the database.
The emails are quoted here as they appear in the DOJ release, including spelling and grammatical errors.
Ultimately, it seems, his quest was unsuccessful. Kremlin spokesman Dmitry Peskov said Putin never met Epstein as far as he’s aware, and no evidence has emerged so far to show that they did.
Earlier that year, in January, Epstein pitched former Norwegian Prime Minister Thorbjorn Jagland as the politician apparently prepared to meet with Putin in Sochi. The Russian Black Sea resort was shortly to host the 2014 Winter Olympics, the most expensive in history as Putin lavished $50 billion to present the games as a showcase of his country’s post-Soviet restoration.
Sport wasn’t on Epstein’s mind. “you can explain to putin , that there should be a sopshiticated russian version of bitcoin,” he wrote. “it would be the most advanced financial instrument availbale on a global basis.”
Jagland was among the most prominent European politicians at the time as secretary general of the Council of Europe for a decade between October 2009 and September 2019. Jagland met Putin on May 20, 2013, according to the Kremlin’s website, and returned to Sochi in 2014 for the opening of the Olympics.
On May 8, 2013, Epstein asked Jagland to secure him an audience with the Russian leader. “I know you are going to meet putin on the 20th, He is desperate to engage western investment in his country,” the financier wrote. “I have his solution. He needs to securitize russian investment, that means the govt takes the first loss.”
Epstein went on: “I recoginize that there are human rights issues that are at the forefront of your trip howver, if it is helpful to you, I would be happy to meet with him sometime in June and explain the solution to his top prioirty, I think this would be good for your goals. exchange somehting he really wants. for someting you want.”
In a further exchange a few days later, Jagland told Epstein “all this is not easy for me to explain to Putin. You have to do it. My job is to get a meeting with him.”
Epstein replied that Putin “is in a unique position to do something grand, like sputnik did for the space race.” He added: “I would be happy to meet with him , but for a minimum of two to three hours, not shorter.”
Apparently, a counter-offer came from Moscow that failed to enthuse Epstein. On May 21, he claimed in a message to former Israeli Prime Minister Ehud Barak that Putin had proposed a meeting during the annual St. Petersburg International Economic Forum the following month.
“I told him no,” Epstein wrote to Barak. “If he wants to meet he will need to set aside real time and privacy, lets see what happens.”
Days earlier, on May 9, referring to Putin, Epstein admitted to the Israeli politician that “I never met him.”
Two years later, in 2015, Barak wrote to thank Epstein for arranging his own participation at the St. Petersburg forum, where he said he held meetings with Bank of Russia Governor Elvira Nabiullina and Foreign Minister Sergei Lavrov as well as the heads of the country’s two largest banks, Herman Gref of Sberbank and VTB Bank’s Andrey Kostin.
A spokesperson for Barak didn’t immediately offer comment.
As early as November 2010, Epstein was boasting to an unidentified correspondent that he had “a friend of Putin,s” who could help him secure a Russian visa, in response to an apparent party invitation.
Epstein noted on an application form for a year-long Russian visa in 2011 that he’d been issued with visas every year but one between 2002 and 2007, and had traveled to the country. It’s unclear from the files how many times he made use of the visas to visit Russia, though they indicate he made repeated plans to go there.
In April 2018, he received an email advising that his Russian visa was expiring and he’d need an official invitation letter to “renew for a 3 year business visa.” The visa was subsequently issued in June.
Epstein sent more emails to Jagland asking about meetings with Putin until June 2018. That last message, about a month before Putin held his first summit with US President Donald Trump in Helsinki, was the most concise.
“Would love to meet with Putin,” Epstein wrote.
Norwegian authorities started a corruption probe into Jagland this month over his links to Epstein.
Jagland is “fully cooperating with the police and has provided a detailed account of all relevant matters,” his lawyer, Anders Brosveet, said in a statement, declining to comment further. “He denies all charges against him.”
Trump’s election in 2016 gave Epstein more opportunity to cultivate Russian contacts, presenting himself as someone who could explain the political newcomer. This is what Epstein did during Trump’s first term, telling foreign officials how best to deal with the new president, according to one person who knew him at that time, asking not to be identified because the matter is sensitive.
One, apparently, was Vitaly Churkin, the Russian ambassador to the United Nations in New York until his death in February 2017. Epstein claimed to Jagland that he’d coached the late Churkin on how to talk to Trump, and suggested he tell Putin that Lavrov could also “get insight on talking to me.”
Writing in June 2018, Epstein said: “churkin was great . he understood trump after =ur conversations. it is not complex. he must=be seen to get something its that simple.”
According to the DOJ files, Epstein also had regular contact with Sergei Belyakov, a former deputy economy minister and a graduate of Russia’s FSB security service who was involved in organizing the St. Petersburg economic forum. In one 2015 email, Epstein described him as a “very good guy.”
Belyakov didn’t respond to a request for comment.
Epstein bragged about his own FSB connections in another 2015 message to an unknown contact that he’d accused of attempting to blackmail him.
“I felt it necessary to contact some friends in FSB, and I though did not give them your name,” Epstein wrote. “So i expect never ever to hear a threat from you again.”
–With assistance from Ott Ummelas and Dan Williams.
Thousands of Australians are still likely in the dark about losing hundreds of thousands of dollars in their retirement savings. Authorities are still waiting for victims to come forward after more than a $1 billion was quietly lost from superannuation funds of workers across the country.
Social media ads and aggressive sales tactics were used to lure in regular working Australians. That was the case for Queensland woman Claire* who was encouraged to move her superannuation into a new fund and ultimately lost $165,000 when she later learned it had disappeared.
Claire only realised something was wrong when she received a strange email from “equity trustees” which in the moment didn’t mean anything to her at all.
“I was just lucky that I clicked on it,” she told Yahoo Finance.
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Claire, who works in education, admits she isn’t a sophisticated investor. She paid almost no attention to her superannuation but came across an ad while “doomscrolling” Facebook that caught her eye.
“It was along the lines of nine out of 10 super funds are underperforming. Is your’s one of them?” she recalled. “It wasn’t dodgy looking.”
She clicked to find out if her super fund was on the list.
“To get the article you had to put your name and your phone number and your email in, or something like that.”
However when she did, she didn’t get an article. Instead she got a call from a business on the Gold Coast.
Claire was urged to send through her latest superannuation statement, which she did, and that’s when the “constant” calls started.
Despite her reservations and skepticisms – and repeatedly declining their overtures – the pushy tactics from financial advisors on the other end of the line eventually wore her down and she was convinced to move her superannuation from industry fund QSuper to a fund she couldn’t actually find anything about on Google, called NQ Super.
“They essentially had an answer for everything and made it sound safe as houses, and if I didn’t do this I’m an absolute idiot… They sort of played on my naivety and my lack of knowledge of the super system,” she said.
In her late 30s, Claire was promised much higher returns by the time she retired if she switched.
In a subsequent statement of advice put together by an advisory firm called Venture Egg, and seen by Yahoo Finance, she was told the money would be put into mostly standard investments such as the Betashares Nasdaq ETF and Vanguard ETF funds for Australian and international stocks – common, low risk products that track broad sections of the stock market.
Good morning. The “traditional” large‑bank CFO path runs through corporate finance, controllership, and treasury with deep technical accounting credentials. But Citi’s newly appointed CFO, Gonzalo Luchetti, did not take that route. He instead brings what companies now increasingly want in a CFO: an enterprise operator and strategic partner.
Next month, after Citi files its 2025 year-end results, Luchetti will succeed longtime CFO Mark Mason, who will become executive vice chair and senior executive advisor to chair and CEO Jane Fraser. Mason plans to pursue leadership opportunities outside Citi by the end of 2026. His tenure at Citi also encompassed operational experience. According to people familiar with the matter, Mason’s long-term ambition is to become a CEO.
Luchetti has led U.S. Personal Banking since 2021 and joined Citi in 2006. At the recent 2026 Bank of America Securities Financial Services Conference, he discussed his career and global experience.
“I’ve worked in Latin America, in the U.S., in EMEA, in Asia Pacific,” said Luchetti, who described his background as Argentine American. “I lived for six years in Singapore, overseeing 18 markets in the retail bank and the broader consumer franchise. I saw digital develop in different countries and models and applied much of that in the last five years as head of U.S. Personal Banking.”
He has worked across businesses and functions, and at the local, regional, and global levels—starting in the private bank, then moving into wealth and the affluent franchise, and later overseeing the retail bank, unsecured credit cards, and secured mortgages.
“I think he is well equipped and armed to come in as our newly appointed CFO and continue the momentum,” Mason said on a media call last month. Citi (No. 21 on the Fortune 500) reported a profitable fourth quarter to close 2025.
Luchetti’s blend of operating experience, consulting, strategy, P&L leadership, and business‑unit CFO work reflects what many companies now look for in finance chiefs.
What boards want in CFOs now
The CFO role continues to evolve. Boards are seeking CFO candidates with demonstrated leadership beyond finance—particularly “operators” with enterprise-wide influence, according to Russell Reynolds Associates’ research.
Ten years ago, boards focused on controller backgrounds, deep accounting expertise, strong audit committee relationships, and FP&A rigor, Shawn Cole, president and founding partner of executive search firm Cowen Partners, recently told me. Now, he said, boards want CFOs who can lead technology transformation, manage geopolitical supply chain complexity, defend against activists, and navigate volatile capital markets—creating intense competition for a small pool of sitting CFOs with that modern skill set.
At the BofA conference, Luchetti highlighted mid-single digit growth in high-returning areas, like for Services and Wealth deposits and Cards and Wealth loans. Net interest income, excluding Markets, will be up 5%–6% in 2026. “We’ll talk about this at length at Investor Day,” Luchetti said. “Very clearly for us, the biggest objective this year is to deliver what we committed to, which is the 10% to 11% RoTCE [Return on Tangible Common Equity].”
His top priorities as he enters the role are twofold: “Number one, drive consistent, higher returns; and two, pursue excellence in execution.” He said it starts with durability: strong risk and control practices, a solid balance sheet, and ample liquidity, so performance is sustainable over time. In U.S. Personal Banking, that foundation helped Citi deliver 13 straight quarters of positive operating leverage and move returns from 5.5% RoTCE in 2024 to the mid‑teens in the back half of the year, Luchetti noted.
As CFO, he said, he will focus on clear accountability and execution—doing what Citi says it will do, acting early on risks, and maintaining urgency—combined with a “beginner’s mindset” to keep pushing for higher, sustainable returns.
In elevating Luchetti, Citi is effectively betting that the next era of value creation will be led by operator-CFOs.
Sheryl Estrada
sheryl.estrada@fortune.com
Leaderboard
Brian Piper was named EVP and CFO of Sana Biotechnology, Inc. (NASDAQ: SANA). Piper brings more than 25 years of experience. He was previously CFO of Scorpion Therapeutics until its acquisition by Eli Lilly in 2025, and thereafter served as CFO of Antares Therapeutics following its spin-off from Scorpion. Before that, he was CFO of Prelude Therapeutics, a publicly traded biotech company. Earlier in his career, he served as CFO of Aevi Genomic Medicine and spent 13 years at Shire Pharmaceuticals.
Vic Pierni was appointed CFO of Xsolis, a healthcare technology company. He brings more than 25 years of experience. Most recently, he served as CFO of Uniguest, a global digital technologies SaaS provider. Previously, he was CFO of Loftware, an enterprise supply chain SaaS company. Earlier in his career, Pierni held CFO and senior executive roles at Global Capacity and Verivo Software.
Big Deal
KPMG’s recently released Q4 2025 Credit Markets Update finds leveraged finance ended 2025 strongly, creating a borrower‑friendly start to 2026 but with clear medium‑term risks.
New‑issue leveraged loan volume reached about $709 billion in 2025, up from roughly $661 billion in 2024, the second‑highest level since 2021, while high‑yield issuance rose about 16% to more than $330 billion, driven largely by refinancing and a more dovish stance by the Federal Reserve. Refinancing still accounted for 44% of activity, but new‑money LBO and M&A deals led overall volume as the long‑anticipated M&A rebound emerged.
KPMG expects tight spreads, declining base rates, and an issuer‑friendly backdrop to keep capital costs low and support deal flow into early 2026, though data-dependent monetary policy means negative surprises in jobs or inflation could curb further easing.
Going deeper
“Airbnb CEO says AI is ‘the best thing that ever happened to’ his company—he warns other founders: ‘If you don’t disrupt yourself, someone else will’” is a Fortune article by Emma Burleigh.
Airbnb CEO Brian Chesky says AI has been instrumental to the success of his $73.5 billion short-term rental company. Now, the billionaire founder is telling other business leaders that the tech isn’t just a plus, it’s a necessity. Read more here.
Overheard
“It’s the biggest transformation opportunity in retail. That was really appealing to me.”
—Hillary Super, CEO of Victoria’s Secret & Co., told Fortune in an interview. The company brought her on in fall 2024, after its various rebrands were widely dismissed and sales were falling. She had previously served as global CEO of Anthropologie and, more recently, as CEO of rival lingerie brand Savage X Fenty. When she joined Victoria’s Secret, Super said she was “keenly aware of what the perceptions of the brand were, positive and negative,” but was ready to take on a challenge.
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