The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Erika Najarian - UBS Investment Bank, Research Division - Analyst
: Andy, my first question is for you. Specifically, yesterday's announcement is a big win for the company. And as we think about
combining that relief with a generally tighter regulatory environment, what CET1 are you looking at? And what level are you looking
at in terms of, okay, now I'm at the right level, this is now my target in the new world. And now in an environment where balance
sheet growth is minimal at best, right, I can now return capital back to shareholders through buybacks.
I guess I'm just wondering because there's printed -- your GAAP CET1, there's the adjusted that John gave, right? But then you only
have to take into account 25% of that 250 by July 1, 2025, if we get to a final date by then. So there's a lot of moving pieces.
So as your investors think about all the parts that you've made, plus this relief, what is your new target? Is that transitional or fully
phased in? And what's the bogey that investors could look forward to that you would hit before returning capital through buybacks?
Question: Erika Najarian - UBS Investment Bank, Research Division - Analyst
: And so just to follow up here. At least until June 2024 CCAR results, regardless of how quickly you build the capital, either on an
adjusted or on a GAAP basis, you're going to continue to be at pause on the buyback until at least then, until we see the CCAR and
the SCB?
Question: Erika Najarian - UBS Investment Bank, Research Division - Analyst
: Got it. That's very clear. And just one more for John, if I may. In terms of the net interest income trajectory, I think the fourth quarter
bottom is good news, especially relative to what we thought 2 days ago, which would be more RWA mitigation.
As we think about the RWA mitigation ahead that's less impactful to EPS, should we think about it similar to what we saw early in
the year in terms of securitizations? Are you more actively -- are you going to continue to use credit-linked notes, which I assume
has cost you 12.5% or so of the pool, plus SOFR and the spread?
And as we think about those dynamics, do you feel like you have to warehouse more liquidity as we anticipate LCR rules for regional
banks? Because we're also hearing that there could be pretty significant haircuts on how they're thinking about HTM as HQLA.
Question: Erika Najarian - UBS Investment Bank, Research Division - Analyst
: Got it. And congratulations on the release of commitments.
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