WHEN: Today, Wednesday, March 8th
WHERE: CNBC's "Squawk Box"
Following is the unofficial transcript of a CNBC EXCLUSIVE interview with Barclays CEO Jes Staley and CNBC's Wilfred Frost today, Wednesday, March 8th on CNBC's "Squawk Box" (M-F, 6AM-9AM ET). Following are links to the interview on CNBC.com: http://video.cnbc.com/gallery/?video=3000599465 and http://video.cnbc.com/gallery/?video=3000599464.
All references must be sourced to CNBC.
WILFRED FROST: HI, MELISSA. THANK YOU VERY MUCH. I'M JOINED NOW BY THE CEO OF BARCLAYS, JES STALEY. JES GOOD MORNING TO YOU THANKS SO MUCH FOR HAVING US.
JES STALEY: GOOD TO BE HERE.
FROST: YOU'VE BEEN IN THE HOT SEAT AT BARCLAYS FOR A LITTLE OVER A YEAR AND MADE SOME PRETTY BIG STRATEGIC CALLS DURING THAT TIME, MOST NOTABLY PULLING OUT OF REGIONS LIKE ASIA AND AFRICA AND DOUBLING DOWN ON THE INVESTMENT BANK, WHICH OF COURSE HAS ITS BIGGEST PRESENCE HERE STATESIDE. ARE YOU NOW FEELING VINDICATED WITH SOME OF THOSE BIG CALLS?
STALEY: LET ME SAY FIRST, IF WE CAN RUN BARCLAYS BANK HALF AS WELL AS DAVID TEPPER RUNS MONEY, WE'LL BE DOING FINE. IT WAS QUITE A CHANGE IN BANK STRATEGY TO BASICALLY BECOME A TRANSATLANTIC CONSUMER CORPORATE AND INVESTMENT BANK. I THINK IT'S WAY TOO EARLY TO PASS JUDGMENT. I THINK WE LIKE THE MOMENTUM WE HAVE. GETTING OUT OF AFRICA IS A VERY, VERY DIFFICULT DECISION. WE DO HOPE TO RETAIN AN IMPORTANT INVESTMENT IN BARCLAYS AFRICA BUT NOT A CONTROLLING STAKE. I THINK, YOU KNOW, TO A CERTAIN EXTENT, OUR STRATEGY IS A BELIEF THAT THE GLOBAL CAPITAL MARKETS WILL BE THE DOMINATING VEHICLE TO FUND GLOBAL ECONOMIC GROWTH AS OPPOSED TO BANK BALANCE SHEETS. BARCLAYS HERE IN NEW YORK, FOR INSTANCE, HAS GOT A GREAT POSITION IN THE CAPITAL MARKETS WITH ITS INVESTMENT BANK. WE HAVE A JUGGERNAUT RETAIL BUSINESS IN THE UK. WE'VE GOT A GREAT CONSUMER BUSINESS HERE IN THE U.S. THIS TRANSATLANTIC STRATEGY, I THINK, IS ONE THAT WE FEEL GOOD ABOUT. I THINK THE EARLY SIGNS ARE ENCOURAGING, BUT WE'VE GOT A LONG WAYS TO GO.
FROST: ON THAT TRANSATLANTIC POINT OF VIEW, DO YOU REALLY BELIEVE THE U.S. AND UK CAN GET TO A TRADE DEAL PRETTY QUICKLY? IS THE U.S. A BETTER TRADING PARTNER FOR THE UK THAN THE EUROPEAN UNION IS?
STALEY: YOU KNOW, THERE'S BEEN A LOT OF TALK ABOUT TRADE, FOR SURE, BUT I STILL BELIEVE THAT THE GLOBAL ECONOMY HAS BENEFITTED FROM THE ECONOMIC INTEGRATION THAT HAS BEEN MANAGED, LED BY THE UNITED STATES, BUT ALSO CLEARLY THE EUROPEAN UNION, THE UK. I THINK THE G20 HAS BEEN QUITE EFFECTIVE IN REAFFIRMING THE VALUE OF NOT CREATING BARRIERS TO THE FREE FLOW OF CAPITAL AND THE FREE FLOW OF GOODS AND SERVICES. THE PARTNERSHIP WITH THE U.S. IS EXTREMELY IMPORTANT TO US IN THE UNITED KINGDOM. WE THINK THE UNITED STATES' ECONOMY, MUCH LIKE DAVID'S BEEN TALKING ABOUT, HAS GOT A LOT OF RUNWAY IN FRONT OF IT. I THINK THE DIALOGUE BETWEEN THE U.S. AND THE UK IS QUITE CONSTRUCTIVE. BOTH COUNTRIES, I THINK, SEEKING TO KEEP THE CHANNELS OF COMMERCE OWN AND THE FLOW OF CAPITAL OPEN BETWEEN THE TWO COUNTRIES.
FROST: ONE OF THE OVERHANGS AFTER YOUR RECENT EARNINGS WAS LEGAL COSTS BECAUSE OF THE ONGOING DEBATE YOU'RE HAVING WITH THE DEPARTMENT OF JUSTICE. OF COURSE, YOU'VE DECIDED NOT TO SETTLE YOUR CASE WITH THEM IN TERMS OF MORTGAGE BACKED SECURITIES DATING BACK TO THE FINANCIAL CRISIS, WHEREAS THE VAST MAJORITY OF OTHER BANKS HAVE SETTLED. WHY HAVEN'T YOU SETTLED?
STALEY: YOU KNOW, WE'RE KNOT GOING TO TALK TOO MUCH ABOUT OUR POSITION WITH THE DEPARTMENT OF JUSTICE. ONE THING WE'VE SAID PUBLICLY IS WHAT WE'RE LOOKING FOR IS A TREATMENT THAT WAS COMMENSURATE WITH HOW THE U.S. BANKS WERE TREATED BY THE DEPARTMENT OF JUSTICE. THERE WERE TRANSGRESSIONS. I THINK EVERYONE HAS ACKNOWLEDGED THAT. AS AN AMERICAN, I THINK WHAT WAS IMPORTANT IS LET US BE TREATED FAIRLY WITH HOW THE U.S. BANKS WERE TREATED. IF WE'RE TREATED ON THAT BASIS, WE HOPE TO SETTLE WITH THE DEPARTMENT OF JUSTICE.
FROST: WHAT'S THE AMBITION FOR THE INVESTMENT BANK, PARTICULARLY HERE IN THE U.S.? CAN YOU BE AS STORIED AS LEHMAN BROTHERS ONCE WAS AT ITS PEAK IN AMERICAN INVESTMENT BANKING HISTORY?
STALEY: YOU KNOW, WE WANT TO BE ONE OF THE MOST WELL-REGARDED FINANCIAL INSTITUTIONS IN THE WORLD. I THINK OUR REPUTATION FOR CONDUCT AND HOW THE TYPE OF BUSINESS WE DO IS WHAT'S MOST IMPORTANT TO US. 2016 WAS A GOOD YEAR FOR BARCLAYS INVESTMENT BANK IN THE AMERICAS. IF YOU TAKE M&A FEES, DEBT CAPITAL MARKET FEES, EQUITY CAPITAL MARKET FEES, WE ACTUALLY GREW '16 VERSUS '15 AND WE ARE RANKED FIFTH IN THE U.S. WE LIKE OUR POSITION IN THE UNITED STATES. LEHMAN DOES HAVE A STORIED HISTORY, BUT BARCLAYS IS 327 YEARS OLD. THAT'S GOT PROBABLY THE LONGEST HISTORY OF ALL THE BANKS THAT ARE RESIDENT HERE IN THE STATES FOR SURE.
FROST: IN TERMS OF BOOSTING THE INVESTMENT BANK, YOU'VE DONE A LOT OF HIRING. SO MUCH SO THAT, IN FACT, HALF THE EXECUTIVE BOARD, I THINK, IS NOW FORMER JPMORGAN EXECUTIVES. WHAT WAS YOUR PROPOSITION TO THOSE GUYS? HOW DID YOU MAKE THEM LEAVE JPMORGAN, COME TO BARCLAYS?
STALEY: FIRST OF ALL, JPMORGAN IS AN EXTRAORDINARY FINANCIAL INSTITUTION, THE LARGEST BANK IN THE WORLD TODAY. IT'S GOT AN EXCEPTIONAL MANAGEMENT TEAM. I THINK THE IDEA OF BRINGING BACK TO A PLACE OF HIGH REGARD ONE OF THE OLDEST AND MOST STORIED FINANCIAL INSTITUTIONS IN THE WORLD IS SOMETHING THAT'S QUITE COMPELLING FOR THOSE THAT BELIEVE IN THE PROFESSION OF BANKING AND BELIEVE THAT WE CAN BRING BARCLAYS BACK TO THIS POSITION. IT'S ALSO A NUMBER OF PEOPLE I WORKED WITH QUITE CLOSELY AT JPMORGAN. I THINK IT'S A GREAT TEAM. I THINK WE RELIED ON EACH OTHER IN THE PAST, AND I THINK WE LOOK FORWARD TO DEALING WITH THIS CHALLENGE COLLECTIVELY WITH OUR FRIENDS AND PEOPLE WHO HAVE BEEN AT BARCLAYS FOR A LONG TIME. I THINK IT'S A GREAT MANAGEMENT TEAM. I LOOK FORWARD TO DELIVERING WHAT BARCLAYS IS CAPABLE OF DELIVERING.
FROST: DID IT RUFFLE SOME FEATHERS AT JPMORGAN? IS IT TRUE JAMIE DIMON RANG YOUR CHAIRMAN TO TRY TO ENCOURAGE HIM TO STOP HIRING FORMER EXECUTIVES?
STALEY: I THINK JPMORGAN HAS ONE OF THE BEST MANAGEMENT TEAMS OUT THERE. JAMIE IS ARGUABLY THE BEST CEO OF OUR GENERATION IN BANKING. I THINK THEY'LL BE FINE.
FROST: WHAT DID YOU LEARN FROM JAMIE DIMON? AS YOU SAID, HE WAS YOUR CEO FOR NEARLY TEN YEARS ABOUT EIGHT YEARS I THINK. WHAT DID HE TEACH YOU?
STALEY: THAT'S A GOOD QUESTION, WILF. ONE, LOCK DOWN YOUR STRATEGY AND BELIEVE IN IT. THEN EXECUTE ON IT. THE IMPORTANCE OF A MANAGEMENT TEAM. THE IMPORTANCE OF A CEO DEALING WITH ALL THE IMPORTANT CONSTITUENCIES, FROM SHAREHOLDERS TO BOARD MEMBERS TO THE PRESS TO ANALYSTS, TO BANKERS, TO CLIENTS, TO CUSTOMERS, THE OBLIGATION TO REACH AS MANY PEOPLE AS YOU CAN THAT INFLUENCE ULTIMATELY THE SUCCESS OR FAILURE OF THE BANK. BUT, YOU KNOW, JAMIE AND I ARE VERY DIFFERENT MANAGERS. HE DOES HIS THING AND I WHOLLY DO MY THING.
FROST: IF WE COME BACK TO THIS SORT OF POSITION ON BREXIT, OF COURSE THERE'S LOTS OF OTHER EUROPEAN ELECTIONS COMING UP THIS YEAR, WOULD IT IN FACT BENEFIT BARCLAYS IF ONE OF THOSE WENT TO THE ANTI-EU DIRECTION AND IT WOULD TAKE AWAY THE PRESSURE OF WHETHER LONDON CAN REMAIN THE BIGGEST FINANCIAL CENTER IN EUROPE?
STALEY: NO. I THINK A UNIFIED EUROPEAN UNION IS IMPORTANT FOR ALL OF US. I HOPE THE EUROZONE AND THE EUROPEAN UNION EXPERIMENT CONTINUES TO BE A SUCCESS. I THINK ALL OF US WHETHER IT'S IN NEW YORK OR LONDON BENEFIT FROM POLITICAL STABILITY. I THINK THE IMPORTANT THING IS UK, U.S. AND EUROPEAN UNION RECOMMIT THEMSELVES AS THEY DID THROUGH THE G20 TO THE FREE FLOW OF CAPITAL AND FREE FLOW OF GOODS AND SERVICES IN A STABLE EUROPEAN UNION ENGAGING WITH THE UNITED STATES AND THE UK FOR THE BENEFIT OF THE GLOBAL ECONOMY AND THE GEOPOLITICS OVERALL IS VERY IMPORTANT FOR ALL OF US. SO, NO, MORE POLITICAL INSTABILITY IS NOT A BENEFIT TO ANYBODY.
FROST: SO IN THAT SENSE PRESIDENT TRUMP'S LACK OF SUPPORT FOR THE EUROPEAN PROJECT IS A MISTAKE?
STALEY: I'M NOT GOING TO COMMENT ON THE POSITION OBVIOUSLY OF THE PRESIDENT OF THE UNITED STATES, BUT I THINK THE UNITED STATES IS COMMITTED TO A GLOBAL COMMUNITY THAT IS COLLABORATIVE AND INTEGRATED. AND THE U.S. BENEFITS SO MUCH FROM BEING CONNECTED THE WAY IT IS TO ASIA, TO EUROPE, TO AFRICA, TO LATIN AMERICA, AND I THINK THAT WE CONTINUE TO MANAGE THE GLOBAL ECONOMY AS A GLOBAL COMMUNITY AS OPPOSED TO PUTTING UP WALLS.
FROST: IN TERMS OF THE TRUMP ADMINISTRATION, CLEARLY THERE'S BEEN A HUGE BOUNCE IN OPTIMISM SHOWN IN THE STOCK MARKET, SHOWN IN VARIOUS INDICATORS SINCE HE'S TAKEN OFFICE. DOES THAT MATCH UP WITH WHAT YOU'RE SEEING IN TERMS OF ACTIVITY, PARTICULARLY ON THE U.S. SIDE OF BARCLAYS?
STALEY: I THINK THE ECONOMY WAS ON A TRAJECTORY OF GROWTH TO BEGIN WITH. YOU KNOW, THE FED HAD ALREADY STARTED TO MOVE INTEREST RATES. I THINK GETTING BACK TO A MORE NORMALIZED MONETARY POLICY WITH INTEREST RATES THAT ARE MORE REFLECTIVE OF SORT OF LONG TERM RATES IS HEALTHY FOR THE ECONOMY. I THINK THERE'S A GENERAL CONSENSUS THAT INFRASTRUCTURE SPEND NEEDS TO GO UP ON BOTH SIDES OF THE AISLE. I THINK THAT WILL ADD A FISCAL STIMULUS, I THINK, WITH THIS NEW ADMINISTRATION. AND SO I THINK IT'S HELPFUL THAT THE ECONOMY HAS GOT THIS MOMENTUM. WE JUST HOPE THAT THE POLITICAL LEADERSHIP OF THE UNITED STATES USES THIS OPPORTUNITY FOR THE BENEFIT OF ALL PARTS OF SOCIETY.
FROST: OF COURSE ONE OF THE AREAS HE'S TALKED ABOUT A LOT IS DEREGULATION OF FINANCIALS. WHAT'S YOUR VIEW ON THAT? DO YOU EXPECT IT TO COME SOON? AND IF IT DOES COME, DOES IT SPARK A RACE AROUND THE REST OF THE WORLD TO DEREGULATE QUICKER THAN WHOEVER ELSE IS?
STALEY: THAT'S A GREAT QUESTION. MY VIEW, OUR VIEW, IS THAT IT WOULD BE A GOOD THING FOR DODD/FRANK TO STAY IN PLACE AND NOT TO REPEAL IT. BUT DODD/FRANK'S A VERY COMPLICATED PIECE OF LEGISLATION WHICH REQUIRES A LOT OF INTERPRETATION BY THE REGULATORS. I THINK WHAT YOU WILL SEE IS MORE OF A VOLUME CONTROL. YOU KNOW, IS THE VOLCKER RULE A LITTLE TOO TIGHT FOR THE BENEFIT OF LIQUIDITY IN THE CAPITAL MARKETS? ARE THEY OPERATING CAPITAL RISK LEVELS OF THE U.S. BANKS A LITTLE TOO HIGH IF YOU WANT MORE LIQUIDITY INTO THE SYSTEM? THIS IS A VOLUME CONTROL AND A COMPLICATED PIECE OF LEGISLATION. AND YOU NEVER GET IT RIGHT THE FIRST TIME. SO WE LOOK FORWARD TO THAT. BUT I GO BACK TO THIS POINT, YOU KNOW, WHEN THE G20 MET POST THE FINANCIAL CRISIS, THEY DID TWO THINGS. THEY SAID, ONE, WE HAVE TO RE-REGULATE BANKS ALL AROUND THE WORLD. THEY'VE DONE THAT QUITE EFFECTIVELY FROM BRUSSELS TO LONDON TO WASHINGTON AND NEW YORK. BUT AT THE SAME TIME THEY COMMITTED THEMSELVES NOT TO USE RE-REGULATION AS A WAY TO CREATE AN UNLEVEL PLAYING FIELD THAT MIGHT INHIBIT THE FREE FLOW OF CAPITAL. WE HOPE THE G20 CONTINUES TO BELIEVE THAT SUCH THAT WHETHER IT'S THE UK OR EUROPEAN UNION NEGOTIATING OR THE UK AND THE U.S., WE KEEP THE FREE FLOW OF CAPITAL OPEN ACROSS NATIONAL BORDERS WHICH BENEFITS EVERYBODY.
FROST: AND JUST TO ROUND THINGS OFF, I KNOW YOU'RE VERY HAPPY AT BARCLAYS AND YOU FORESEE A LONG TENURE IN TERMS OF YOUR TIME AT BARCLAYS AHEAD OF YOU. ONE DAY WOULD YOU LIKE TO COME BACK AND LEAD ONE OF THE U.S. HEADQUARTERED INVESTMENT BANKS?
STALEY: NO. I AM THRILLED AND HONORED TO BE ASKED TO LEAD AN INSTITUTION THAT HAS SUCH GREAT IMPORTANCE TO GREAT BRITAIN AND TO THE UNITED KINGDOM. THIS IS THE LAST GIG.
FROST: AND A JOB THAT ALLOWS YOU TO SPEND TIME BETWEEN THE TWO BEST COUNTRIES IN THE WORLD, I QUITE AGREE, WHY WOULDN'T YOU SIT THERE AND ENJOY IT? THANK YOU SO MUCH FOR YOUR TIME. WE APPRECIATE IT. JESS STALEY, BARCLAYS CEO.
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