Digital assets, artificial intelligence, and markets; a conversation with Speaker Paul Ryan

Former U.S. Speaker of the House Paul Ryan recently visited Broadridge’s offices in New York and sat down with Broadridge President Chris Perry to offer his perspectives on a range of topics, including finance, economics, artificial intelligence, and more. Since leaving Congress, he has been active in business, finance, academia, and policy, giving him a unique lens on the intersection of all these areas in a changing market and regulatory landscape.

Below are highlights from their conversation, which have been edited for length and clarity.

Chris Perry: Speaker Ryan, thanks for joining us. What experiences drew you to public service and shaped your current views?

Speaker Paul Ryan: Economics drew me to it. I read a lot of books when I was younger focused on free markets and free market principles. I read the Austrians – Friedrich Hayek and Von Mises. In college, I studied in a department that taught Austrian economics. I thought my ambition was to be the chief economist at R.W. Baird in Milwaukee one day.

I later worked at a think tank as a staff economist for Jack Kemp, who became my political mentor. He convinced me to run for Congress and said, “Go make a difference in society.”

Perry: Going back in time, what made you vote against Dodd-Frank?

Ryan: Big banks got bigger, and small banks got fewer. There's my quick answer.

What makes America unique compared to all the other countries is our great market. This is why I think private equity plays a big role in regional and community banks, which supply credit to small and medium-sized businesses that they wouldn’t be able to access in many other countries. As a result, we have this great entrepreneurial sector, this vibrant small and medium-sized business sector. You need those regional banks; you need those smaller banks.

I'm a big fan of localized credit and that's why I think private equity has actually filled a bit of a gap from what Dodd-Frank did. It's $6 trillion pulsating through our economy. I'm a lower-middle market private equity guy now and we basically provide capital to those very kinds of businesses that. 20 years ago, they would have gone to the local bank to get.

Perry: You wrote an op-ed in the Wall Street Journal about how stablecoins could impact the U.S. Could you explain that?

Ryan: They could create new demand for our treasuries. If stablecoins were a country, they would be number 12 in the buyers and holders of U.S. debt, and there isn't even a U.S.-regulated stablecoin law. Europe has a law, some South American countries laws, some Asian countries have one, and Singapore has one.

Imagine if we had our own stablecoin law, which I think we will. Instead of a few hundred billion dollars of these things, we’ll have trillions.

Trillions of dollars of stablecoins have to have treasuries backing them up, creating new demand for treasuries and spreading the dollar throughout the world. It's a total win. That's a fiat currency pegged to the U.S. dollar, pegged to a digital representation of a dollar.

I think blockchain has lots of interesting use cases and can be great for lots of things. For example, at Broadridge, your repo market, you put it on a blockchain, and it will speed up your transactions, with almost no latency in your transactions.

The friction of money is expensive. You can have virtually friction-free money and instantaneous latency. You can have intraday repo and can-do collateralized dollars. You can clean all that stuff up.

Perry: What’s your outlook for M&A and deals and how do you view valuations in this evolving environment?

Ryan: I'm pretty bullish. I think it's a great time for M&A. A lot of deal flow is going to get unlocked. I see a lot of private equity money that will be redeployed, and a lot of stuff is going to market.

The valuations aren't where they were in 2021, which is good. I think they were a little frothy. They're a little more normal. What happened in the last few years is people became a little more normalized on valuations and they went back down. Gravity reasserted itself. The selling prices may be a little high, but they are not crazy.

Perry: With artificial intelligence, what do you envision the government will do with guidelines and regulations?

Ryan: I hope it’s a really light touch. Look, I think we're all AI optimists whether we like it or not. And that is because our adversaries are pressing ahead with no compunction and no inhibitions. And so, I think we have no choice but to do that ourselves.

I would rather see Anthropic and OpenAI win this first-mover race than China and so, government has to make sure regulations do not inhibit that growth.  

Whether we are optimists by nature or by practical observation, we're going to move fast on AI because we need to win. And that means a light-touch regulatory footprint.

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