Description of the ISEEE Fall 2015 Meeting in Barcelona
by Jim Duffy
From September 13th to 16th the members and guests of ISEEE gathered in Barcelona, Spain for the Fall 2015 meeting. We had a very stimulating meeting and set of discussions, and as is always the case at our meetings, all participants joined in all our discussions. A list of meeting participants and accompanying persons, as well as our meeting agenda, can be found at the end of this description.
In a wonderful start to our meeting, on Sunday evening we gathered for a welcoming reception on the rooftop terrace of our conference hotel, Hotel Barcelona Center. The reception was hosted by our Monday morning presenters, Joseph Konowiecki, CEO of Apollo Enterprise Solutions, Ltd. and Andreea Porcelli, CEO of Continental Access Ltd.
Barcelona-based CaixaBank, Spain’s largest financial institution, sponsored our meeting facilities and social program. It’s affiliated La Caixa Foundation, now the third largest charitable organization in the world, is responsible for the art museum CaixaForum, where we were provided with facilities for all our meeting sessions.
Our Monday morning presentation was chaired by Steven Shelton, as head of ISEEE’s Task Force on Small Capital Market Exchange Development, and featured a presentation by our above-described Special Guests Andreea Porcelli and Joseph Konowiecki. They discussed utilizing a joint listing on the Bermuda and Frankfort Stock Exchanges to facilitate public trading of SME’s, which led to a broader discussion of the role that markets such as the Bermuda Stock Exchange may be able to play in facilitating SME access to capital. The discussion was extremely valuable in helping to shape the recommendations that will be forthcoming from our Task Force. The presentation of our Special Guests can be found at the end of this description.
Following our morning session our meeting participants were all provided with a guided tour of the historic building housing the CaixaForum museum.
On Monday afternoon the former and current CEOs of the Budapest Stock Exchange – ISEEE member Gyorgy Mohai and our Special Guest Zsolt Katona – discussed the scandal over the closing of several brokerage firms in Hungary earlier this year, with large potential losses for thousands of investors. They provided background on how this problem developed, and the lessons that should be learned. A copy of their presentation is also provided at the end of this description.
We then heard from Mr. Edward O’Loghlen, CFA, the head of investor relations at our sponsor, CaixaBank. Mr. O’Loghlen described for us the very interesting history of CaixaBank, which was established at the beginning of the 20th Century, and had from inception an enlightened philosophy concerned with worker relations and social benefits. A part of the bank’s profits has always been directed towards social purposes – related to health, education and child welfare. Today the charitable foundation La Caixa owns 57% of CaixaBank, and as noted above has grown to become the third largest charitable foundation in the world.
Our next speaker was Rafael Ribo, the Catalan Ombudsman. Mr. Ribo’s father was responsible for international relations at the Barcelona Stock Exchange, and in that context met and established a life-long friendship with Don Calvin, the founder of ISEEE, which has been maintained by both families to the present day. It was at Mr. Ribo’s suggestion that ISEEE determined to hold a meeting in Barcelona. In his presentation Mr. Ribo described for us the purpose and function of the Catalan Ombudsman, and provided information about the Ombudsman function in many developed countries around the world. Information about the Catalan Ombudsman can be found at http://www.sindic.cat/en/page.asp?id=1#.
On Monday evening all meeting participants and accompanying persons were provided a guided tour of CosmoCaixa, a science and natural history museum operated by La Caixa Foundation. We were also provided a gala dinner sponsored by CaixaBank, and hosted by Mr. Edward O’Loghlen.
Tuesday morning featured our memorial to our recently deceased founder, Don Calvin. All participants shared their memories of Don, and we were fortunate to have with us in Barcelona Don’s daughter, Sally Calvin, and Don’s grandson, Alex Palasek, and his wife, Andrea Palasek. A memorial to Don is provided elsewhere on this website.
Prior to lunch on Tuesday Steve Shelton give us one of his very popular chartist presentations, extrapolating where the financial markets will go, from where they have been. His presentation, “Global Economies and Markets: Rendezvous with Destiny” is provided at the end of this description.
On Tuesday afternoon, Mike Lipper, Richard Meier and Martin Kinsky chaired a discussion of market developments with a focus on the impact on retirement capital. The discussion noted the following issues:
1. IMF’s most important problem: Retirement Capital Shortfall
2. We are living longer, some up to 125 years
3. Taxes unlikely to fill retirement capital gap
4. Individuals must fund their own retirement
5. For centuries funds have gathered investment capital
6. Funds need to be sold, often by sales people + media
7. Sales efforts are expensive and can lead to miss-selling
8. “Too Big to Fail” protects politicians, not investors, makes managing harder
9. Increased capital with lowered returns leads to shrinking independence
10. Low capital returns — activists likely to reduce excess strategic capital
11. Less strategic capital reduces the chances of private sector rescues
12. Budgeting not taught at home or schools at any level
We then discussed the following solutions:
1. Appreciation that profits needed to build retirement capital
2. Strategic excess capital provides opportunities to rescue and risk
3. Educate people on the need to save and then invest
Tuesday’s session closed with a very interesting presentation by Mr. Andreu Mas-Colell, the Catalan Minister of Finance. He was accompanied by Mr. Joan Rosas, the head of International Financial Institutions for CaixaBank, and Mr. Higini Clotas, Senior Advisor to La Caixa Foundation.
Mr. Mas-Colell noted that Spain is an open economy, and thus affected by developments elsewhere, including issues in present day Greece, Brazil, Russia, China and the U.S. He indicated that he believed that economic growth in the U.S. is vital for both Spain and Europe as a whole. He mentioned that Spain’s 3% annual growth is now the best in Europe, and that he expects that Spain will have fully recovered from the 2008 financial crisis by 2016-2017. An observation he made that was very interesting to our participants was that Spain is adapted to high unemployment. When asked to elaborate on this he noted that family structure in Spain is very strong, unemployment benefits of two years are generous, the social safety net is strong, and includes churches and civic associations, and as many as 23% of the employed have extra jobs to help support themselves and their families. Regarding the recent demonstrations in favor of Catalan secession from Spain, he noted that Catalonia is concerned that it contributes more than its fair share to supporting less prosperous regions of Spain, and that what Catalans are really interested in is more self government. They are willing to continue to contribute to the economy of Spain, but they want the ability to collect their own taxes.
Following our discussion sessions we were provided a guided tour of Llotja de Mar, a historic building owned by the Barcelona Chamber of Commerce, and which once housed the Barcelona Stock Exchange. Following a brief bus tour of other Barcelona city sights, CaixaBank provided our entire group with dinner at a seaside restaurant.
In August, a survey was distributed to all active ISEEE members soliciting their views on the future organization, mission and focus of the ISEEE. At our first discussion session on Wednesday, the survey results to date were presented, and all members and special guests discussed the results and offered additional views. These discussions will add importantly to the information obtained through the survey, and will assist the ISEEE Executive Committee in planning for the organization’s future.
We followed this with a discussion of ideas for the timing, location and suggested agenda items for the next ISEEE meeting.
We must also note that during our visit to Barcelona, CaixaBank generously sponsored several very interesting sightseeing excursions for our accompanying persons, including tours of the cathedral Sagrada Familia and the Park Guell, both creations of the famous Barcelona architect, Antonio Gaudi, old Barcelona and the Roman ruins in the Museum of the History of the City of Barcelona, and a tour of Barcelona’s Picasso Museum.
Our meeting closed Wednesday with our Farewell Lunch for all participants and accompanying persons, again sponsored by CaixaBank. Our Chairman, Mike Lipper, thanked our sponsor for the outstanding facilities and programs they provided us, and the wonderful hospitality and welcome provided us by all the CaixaBank personnel with whom we came in contact. We also heard very kind parting words from Alfredo Bustillo Martinez, the Director of Sponsorship, Brand and Corporate Image of CaixaBank, and the individual at CaixaBank directly responsible for organizing the facilities and support provided to us. Our conference ended with the traditional final words from our member Sveta Bernard.