Finance

Between early 2022 and mid-2023 the Federal Reserve tightened monetary policy at the fastest pace since the early 1980s, lifting America’s policy interest rate from 0-0.25% to 5.25-5%. When the central bank’s policymakers next meet on September 17th and 18th, they will almost certainly start cutting rates. Investors even wonder whether they will begin with a 0.5-percentage-point reduction, in response to cooler-than-expected economic data. More

Warren Buffett speaks during the Berkshire Hathaway Annual Shareholders Meeting in Omaha, Nebraska on May 4, 2024. 

Warren Buffett’s Berkshire Hathaway offloaded another chunk of Bank of America shares, bringing its total sales to more than $7 billion since mid-July and reducing its stake to 11%.
The Omaha-based conglomerate shed a total of 5.8 million BofA shares in separate sales on Friday, Monday and Tuesday for almost $228.7 million at an average selling price of $39.45 per share, according to a new regulatory filing.

The latest action extended Berkshire’s selling streak to 12 consecutive sessions, matching the 12 consecutive sessions from July 17 to Aug. 1.
Berkshire has sold more than 174.7 million shares of the Charlotte-based bank for $7.2 billion, with 858.2 million shares remaining, or 11.1% of shares outstanding. BofA has fallen to the No.3 spot on Berkshire’s list of top holdings, trailing behind Apple and American Express. Before the selling spree, BofA had long been Berkshire’s second biggest holding.

Moynihan on Buffett

Buffett famously bought $5 billion worth of BofA’s preferred stock and warrants in 2011 in the aftermath of the financial crisis. He converted those warrants in 2017, making Berkshire the largest shareholder in BofA. The “Oracle of Omaha” then added 300 million more shares to his bet around 2018 and 2019.
BofA CEO Brian Moynihan made a rare comment about Berkshire’s sales Tuesday, saying he has no knowledge of Buffett’s motivation for selling.
“I don’t know what exactly he’s doing, because frankly, we can’t ask him. We wouldn’t ask,” he said during Barclays Global Financial Services Conference, according to a transcript on FactSet. “But on the other hand, the market’s absorbing the stock …. we’re buying a portion of the stock, and so life will go on.”

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Bank of America

Shares of BofA have dipped just about 1% since the start of July, and the stock is up 16.7% this year, slightly outperforming the S&P 500.
Moynihan, who has been leading the bank since 2010, praised the 94-year-old’s shrewd investment in his bank in 2011, which helped shore up confidence in the embattled lender struggling with losses tied to subprime mortgages.
“He’s been a great investor for our company, and stabilized our company when we needed at the time,” he said.
To illustrate how lucrative Buffett’s investment has been, Moynihan said if investors were to buy his bank stock the same day Buffett did, they would have been able to capture the low price of $5.50 per share. The stock last traded just under $40 apiece.
“He just had the guts to do it in a big way. And he did it. And it’s been a fabulous return for him. We’re happy that he gets it,” Moynihan said.
— CNBC’s Alex Crippen contributed reporting. More

José Luis Gutiérrez | iStock Photo

Why are September and October historically weak for stocks? For answers, I turned to Mark Higgins, senior vice president at Index Fund Advisors and author of the book, Investing in U.S. Financial History: Understanding the Past to Forecast the Future.
The answers have been edited for clarity.

What is it with September and October being weak months for stocks?  Has this always been the case?
Yes. The most intense panics on Wall Street have tended to occur during the late summer and early autumn months. This can be traced all the way back to the 1800s. A few notable examples of exceptional panics include Black Friday of 1869, the Panic of 1873 and the Panic of 1907.
But why September and October?
It is a byproduct of an old weakness in the U.S. financial system. Prior to the reintroduction of a central banking system with the passage of the Federal Reserve Act of 1913, the U.S. was limited in its ability to adjust the money supply in response to market conditions.
The inelasticity of the U.S. currency made the late summer and early autumn months an especially precarious time, due to the agricultural financing cycle. In the 1800s, the U.S. economy still relied heavily on agricultural production.  For the first eight months of the year, American farmers had a limited need for capital, so excess funds held on deposit in state banks were shipped to New York banks or trust companies to earn a higher rate of return.

When harvest time arrived in August, state banks began withdrawing their capital from New York, as farmers drew on their accounts to fund transactions required to ship crops to market.
The agricultural financing cycle created chronic shortages of cash in New York City during the autumn months. If these shortages happened to coincide with a financial shock, there was little flexibility in the system to prevent a panic. 
How did the government respond to these panics?
The limited ability of the government to react was the primary impetus for the passage of the Federal Reserve Act of 1913. The Act granted the Fed the power to serve as a lender of last resort during financial crises. Prior to the Act, leading financiers (most notably J.P. Morgan) were forced to assemble ad hoc solutions that relied primarily on private capital. After the U.S. barely avoided a catastrophic collapse of the financial system during the Panic of 1907, there was just enough political support for the return of the third and final iteration of a central banking system in the United States. 
Did the creation of the Federal Reserve provide more stability to markets? 
Yes, and if one compares the frequency, intensity and misery of financial panics during the 1800s, this is plainly evident. In fairness, the Fed made a few mistakes along the way, with the most notable being its failure to stop the contagion of bank failures in the 1930s. But, by and large, the U.S. financial system has been much more stable since the Federal Reserve became operational in late 1914. 
Still, the U.S. economy is not primarily agricultural anymore.  Why are September and October still weak months?
People tend to fear things that have happened before even if they don’t remember the origin of the fear. It may be that the fall panics have repeated so many times that they have become a self-fulfilling prophecy. In other words, people expect them, and because they expect them, they behave in ways (i.e., reducing risk in late summer and early fall) that make them more likely. I know this sounds like a stretch, but it does seem like it may actually be real. More

Chinese artificial intelligence models may be at least half a year behind those made in the U.S., but Chinese AI apps will likely take off much faster, said Kai-Fu Lee, founder of the startup 01.AI and former head of Google China.
“Apps, I would predict, by early next year will proliferate in China much faster than in the U.S.,” Lee said, noting that the cost of training a good AI model has fallen significantly.

Kai-Fu Lee, chairman and chief executive officer of Sinovation Ventures, speaks during the HICOOL Global Entrepreneur Summit on September 11, 2021 in Beijing, China.  
China News Service | China News Service | Getty Images

BEIJING — Chinese artificial intelligence models may be at least half a year behind those developed in the U.S., but Chinese AI apps will likely take off much faster, said Kai-Fu Lee, former head of Google China.
He was referring to large language models, which are trained on massive amounts of data that can process and produce text, images and videos.

The top Chinese companies’ LLMs are about six to nine months behind their U.S. counterparts, while less advanced Chinese models may lag the U.S. by about 15 months, Lee said. He was speaking at the AVCJ Private Equity Forum China on Wednesday.
Lee, author of “AI Superpowers: China, Silicon Valley, and the New World Order,“ is a widely followed commentator on AI, and is the founder of startup 01.AI as well as venture capital firm Sinovation Ventures.
“Apps, I would predict, by early next year will proliferate in China much faster than in the U.S.,” Lee said, noting that the cost of training a good AI model has fallen significantly.

“It’s inevitable that China will [build] the best AI apps in the world,” he said. “But it’s not clear whether it will be built by big companies or small companies.”
Lee, whose startup is focused on search apps right how, said it may take five to eight years to take generative AI consumer applications to the next level — a single “super app” that can perform multiple tasks.

The industry will likely need completely new devices versus existing smartphones, he said, adding “the right device ought to be always on, always listening.”
Major Chinese companies such as Alibaba and Tencent have released their AI models and business products. These companies and investors have also backed several AI startups.
Beijing-based ShengShu Technology, backed by Alibaba-affiliate Ant Group, announced Wednesday that its text-to-video model Vidu has introduced a new feature for improving how a main element or character in AI-generated clips can be portrayed consistently, without distortion. That can enable advertisers to create promotional videos for their products.
Vidu was released earlier this year and its basic tools are open to the public, with more advanced capabilities available via subscription. Co-founder and CEO Jiayu Tang told reporters Wednesday that several companies were interested in buying ShengShu’s services, and were not just exploring the tech. More

A top Federal Reserve official on Tuesday unveiled changes to a proposed set of U.S. banking regulations that roughly cuts in half the extra capital that the largest institutions will need.
Introduced in July 2023, the regulatory overhaul known as the Basel Endgame would have boosted capital requirements for the world’s largest banks by roughly 19%.
Instead, officials at the Fed, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. have agreed to resubmit the massive proposal with a more modest 9% increase to big bank capital, according to prepared remarks from Fed Vice Chair for Supervision Michael Barr.

A top Federal Reserve official on Tuesday unveiled changes to a proposed set of U.S. banking regulations that roughly cuts in half the extra capital that the largest institutions will be forced to hold.
Introduced in July 2023, the regulatory overhaul known as the Basel Endgame would have boosted capital requirements for the world’s largest banks by roughly 19%.

Instead, officials at the Fed, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. have agreed to resubmit the massive proposal with a more modest 9% increase to big bank capital, according to prepared remarks from Fed Vice Chair for Supervision Michael Barr.
The change comes after banks, business groups, lawmakers and others weighed in on the possible impact of the original proposal, Barr told an audience at the Brookings Institution.
“This process has led us to conclude that broad and material changes to the proposals are warranted,” Barr said in the remarks. “There are benefits and costs to increasing capital requirements. The changes we intend to make will bring these two important objectives into better balance.”
The original proposal, a long-in-the-works response to the 2008 global financial crisis, sought to boost safety and tighten oversight of risky activities including lending and trading. But by raising the capital that banks are required to hold as a cushion against losses, the plan could’ve also made loans more expensive or harder to obtain, pushing more activity to nonbank providers, according to trade organizations.
The earlier version brought howls of protest from industry executives including JPMorgan Chase CEO Jamie Dimon, who helped lead the industry’s efforts to push back against the demands. Now, it looks like those efforts have paid off.

But big banks aren’t the only ones to benefit. Regional banks with between $100 billion and $250 billion in assets are excluded from the latest proposal, except for a requirement that they recognize unrealized gains and losses on securities in their regulatory capital.
That part will likely boost capital requirements by 3% to 4% over time, Barr said. It’s an apparent response to the failures last year of midsized banks caused by deposit runs tied to unrealized losses on bonds and loans amid sharply higher interest rates.

Mortgages, retail loans

Key parts of the proposal that apply to big banks bring several measures of risk more in line with international standards, while the original draft was more onerous for things such as mortgages and retail loans, Barr said.
It also cuts the risk weighting for tax credit equity funding structures, often used to finance green energy projects; tempers a surcharge proposed for firms with a history of operational failures; and recognizes the relatively lower-risk nature of investment management operations.
Barr said he will push to resubmit the proposed Basel Endgame regulations, as well as a separate set of capital surcharge rules for the biggest global institutions, which starts anew a public review process that has already taken longer than a year.
That means it won’t be finalized until well after the November election, which creates the risk that if Republican candidate Donald Trump wins, the rules could be further weakened or never implemented, a situation that some regulators and lawmakers hoped to avoid.
It’s unclear if the changes appease the industry and their constituents; banks and their trade groups have threatened to litigate to prevent the original draft’s implementation.
“The journey to improve capital requirements since the Global Financial Crisis has been a long one, and Basel III Endgame is an important element of this effort,” Barr said. “The broad and material changes to both proposals that I’ve outlined today would better balance the benefits and costs of capital.”
Reaction to Barr’s proposal was swift and predictable; Sen. Elizabeth Warren, D-Mass., called it a gift to Wall Street.
“The revised bank capital standards are a Wall Street giveaway, increasing the risk of a future financial crisis and keeping taxpayers on the hook for bailouts,” Warren said in an emailed statement. “After years of needless delay, rather than bolster the security of the financial system, the Fed caved to the lobbying of big bank executives.”
The American Bankers Association, a trade group, said it welcomed Barr’s announcement but stopped short of giving its approval to the latest version of the regulation.
“We will carefully review this new proposal with our members, recognizing that America’s banks are already well-capitalized and … any increase in capital requirements will still carry a cost for the economy and must be appropriately tailored,” said ABA President Rob Nichols.

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JPMorgan Chase shares fell 5% on Tuesday after the bank’s president told analysts that expectations for net interest income and expenses in 2025 were too optimistic.
The current estimate for 2025 of about $90 billion “is not very reasonable” because the Federal Reserve is cutting interest rates, JPMorgan President Daniel Pinto said at a financial conference.
When it comes to expenses, the analyst estimate for next year of roughly $94 billion “is also a bit too optimistic” because of lingering inflation and new investments, Pinto said.
The move was the New York-based bank’s worst drop since June 2020, according to FactSet.

Daniel Pinto, president and chief operating officer of JPMorgan Chase, speaks during the Semafor 2024 World Economy Summit in Washington, DC, on April 18, 2024.
Saul Loeb | AFP | Getty Images

JPMorgan Chase shares fell 5% on Tuesday after the bank’s president told analysts that expectations for net interest income and expenses in 2025 were too optimistic.
While the bank expects to be in the “ballpark” of the 2024 target for NII of about $91.5 billion, the current estimate for next year of about $90 billion “is not very reasonable” because the Federal Reserve will cut interest rates, JPMorgan President Daniel Pinto said at a financial conference.

“I think that that number will be lower,” Pinto said. He declined to give a specific figure.
Shares of the New York-based bank dropped more than 7% earlier in the session for the worst decline since June 2020, according to FactSet.
JPMorgan, the biggest U.S. bank by assets, has been a winner among lenders in recent years, benefiting from better-than-expected growth in NII as the bank gathered more deposits and made more loans than expected. But skittish investors are now concerned about the outlook for a bellwether banking stock, along with broader concerns about slowing U.S. economic growth.
NII, one of the main ways banks make money, is the difference in the cost of a bank’s deposits and what it earns by lending money or investing it in securities. When interest rates decline, new loans made by the bank and new bonds it purchases will yield less.
Falling rates can help banks in the sense that customers will slow the rotation out of checking accounts and into higher-yielding instruments like CDs or money market funds. But they also make new assets lower yielding, which complicates the picture.

“Clearly, as rates go lower, you have less pressure on repricing of deposits,” Pinto said. “But as you know, we are quite asset sensitive.”
When it comes to expenses, the analyst estimate for next year of roughly $94 billion “is also a bit too optimistic” because of lingering inflation and new investments the firm is making, Pinto said.
“There are a bunch of components that tell us that probably the number on expenses will be a bit higher than what is expected at the moment,” Pinto said.
When it comes to trading, JPMorgan said it expects third-quarter revenue to be flat to up about 2% from a year ago, while investment banking fees are headed for a 15% jump.
The trading slowdown tracks with Goldman Sachs, which said Monday that trading revenue for the quarter was headed for a 10% drop because of a tough year-over-year comparison and difficult trading conditions in August.

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YOUR GUIDE TO NAVIGATING YOUR FINANCIAL FUTURE

Brandon Copeland played in the National Football League as a linebacker for 10 seasons, with six teams.
Copeland, 33, has co-taught a financial literacy course at the University of Pennsylvania’s Wharton School since 2019.
He wrote a new book, “Your Money Playbook,” that aims to condition consumers to win the money game.

Brandon Copeland
Copeland Media

Brandon Copeland is a former NFL linebacker turned coach. But the type of coaching he gravitates to isn’t in the realm of sports — it’s in personal finance.
The 33-year-old — who played for six teams across 10 seasons in the National Football League before retiring last year — started co-teaching a financial literacy course to undergraduates at the University of Pennsylvania’s Wharton School, his alma mater, in 2019 while playing for the New York Jets.

The course, nicknamed “Life 101,” was inspired by his own experiences with money, according to “Professor Cope,” who is also a member of the CNBC Global Financial Wellness Advisory Board and co-founder of Athletes.org, the players’ association for college athletes.

More from Your Money:

Here’s a look at more stories on how to manage, grow and protect your money for the years ahead.

Now, the Orlando resident has written a new book, “Your Money Playbook,” that reads as a football coach’s blueprint to winning the financial “game.” It touches on topics like budgeting, paying down debt, saving, estate planning and starting a side hustle. (Just don’t call it a “side hustle,” as he explains in the book.)
CNBC reached Copeland by phone to discuss his journey into financial education, why becoming a millionaire “is not a sexy thing” and how it helps to think in terms of Chipotle burritos.
This interview has been edited and condensed for clarity.

‘Put the money to work for you’

Greg Iacurci: What got you interested in teaching personal finance and financial literacy?

Brandon Copeland: Feeling unprepared for some of the major financial decisions in life. We go to school for all these years and we [learn] about the tangent of a 45-degree angle, but we don’t talk about appliances and how to buy them, or how to make sure you protect yourself when you’re renting your first apartment and what renters insurance is.
I always thought it was crazy that I had to make it to the Baltimore Ravens to learn what a 401(k) was. That was 2013, my rookie year. I learned what a 401(k) was when the NFL Players Association came and told us about the benefits you get for contributing.

Fast forward to December 2016: My wife and I, we bought our first house, in New Jersey. When we bought that house I was in Detroit playing for the Lions. My wife was at the closing table and she called me and [asked], “Hey, does everything look right on this?” They e-mailed me the closing documents; it was 100 pages and I had no idea what I was looking at. I could see the purchase price was the price that we agreed to, but then I saw all these other titles and warranty deeds and this and that. And I’m like, “I have no idea if I’m getting screwed right now.” One of my biggest fears being an NFL player has always been, somebody’s taking advantage of me.
GI: What do you think is the most important takeaway from your book?
BC: The power of growth. That was the big discovery for me as I started to make money. I had no idea that existed as a kid. I always tell people, you either put the money to work for you or you go to work the rest of your life for money.
There’s a lot of folks who are afraid of the [stock] market. And I’m like, well, everyone’s an investor. If you have a dollar to your name, you’re an investor. If you take your money, you put it under your mattress, you do nothing with it, you put it in a safe in the house: That’s an investment decision. That’s a 0% return. If you take your money, you put it in a regular checking account, that’s a 0.01% return. You put it into a high-yield savings account, it’s a 4% to 5% return. The stock market, you put it in an index fund, the S&P 500, that may be an average 9% to 10% return.
All of those are investment decisions, you just have to choose wisely. [People] can put their money to work for them and get out of the “rat race” at some point.

‘That’s a lot of Chipotle burritos’

GI: For someone who is just starting out — let’s say they have been hesitant to invest their money in the market — how would you suggest they get started?
BC: I think the first thing you’ve got to do is download the [financial news] apps — the CNBCs of the world, the MarketWatch, Yahoo Finance, Wall Street Journal, Bloomberg — and turn on the notifications. Those notifications are starting to explain to you what is moving the market and why, and you’re starting to learn the language of money. Whether you choose to invest money or not, you’re at least starting to get comfortable with, “Oh, the market’s down today. Well, why?” I think that’s important to start to develop your stomach.
The other thing is, start to look at where [your] money is: What account your money is sitting in and how much is in those accounts. By doing that, you’re starting to look at your money from a 30,000-foot view. You can start to determine, “I have X amount of dollars over here in my traditional checking account. Maybe I can take some of that money and put it over into a high-yield savings account that is now giving me 4% interest on it annually. And by getting 4% interest on it annually, maybe that’s generating me $500 a year that I otherwise wouldn’t have had.” Now you’re starting to put yourself in the game of money. What is the limited amount of effort I can do and still be generating money on my behalf?
As a kid, if somebody said, “Hey, man, I’ll give you $500 to do nothing, to press two buttons,” you’d be like, “Sign me up!” I always break that down as, that’s a lot of Chipotle burritos, that’s a lot of dinners, that’s a lot of time with my family at the water park. By doing that, it makes it more of a priority for me to hurry up and make that investment decision.

Brandon Copeland
Copeland Media

GI: One of the first things that you encourage people to do in the book is say aloud to themselves, “I can be wealthy.” Why?
BC: In football, your money or your job can be taken away from you overnight or through an injury. A lot of times, as I was making money, I was always just kind of looking around the corner. Even to this day, I still think about it as if somebody can rip the rug out from under my feet. So I’m still sometimes in survival mode. I think that although you can be making money, there are still ways where you can have anxiety around money, your lifestyle and when you spend money — all those things.
Starting to have positive affirmations — “I deserve to be rich. I deserve to have money. I deserve to not be stressed about keeping the lights on. I can be wealthy. I can do this” — sometimes you’ve got to coach yourself on that. Because where else do you go get that positive affirmation that you can do it?
Doing those things over time not only reinforce positive connotations about yourself, but they also genuinely have a real effect on your mental wellness. It is really, really hard to walk out of the house and be a super productive human being in society when you don’t know if the doors will be locked or changed the next time you get there.  

Why being a millionaire ‘is not a sexy thing’

GI: You write in the book that the journey of financial empowerment will require people to confront their “inner money myths.” What’s the most common myth around money that you hear?
BC: For lot of communities that I serve it’s, put your money in the bank.
GI: You mean keeping it in cash and not investing it?
BC: Exactly. I think it’s a myth because you put your money in the bank, and the bank goes out and invests your money: They invest it in other people’s projects, other people’s homes, and then get a rate of return on your money. Not to say banks are bad and saving is bad, [but] you’ve got to figure out at some point when can I get to the point where I can put my money to work for me?
I think that some of the myths are about whether wealth is for you or not. A lot of millionaires, it’s not a sexy thing. A lot of times you feel like you’ve got to go and create the next Instagram or Snapchat or TikTok in order to ever be wealthy, when really you’ve just got to make simple, consistent, disciplined decisions. That is the toughest thing in the world, to have delayed gratification or to subject yourself to delayed gratification.
I think a lot of times, we don’t prepare for the situation we will be in one day or could be in one day.
GI: How do you balance today versus tomorrow?
BC: I went to a school a couple weeks ago and [asked] the athletes there write out what they want their life to look like five years after graduation. By doing that and saying, “Hey, I want this with my life. I want it to look like this, and I want vacations to be like this,” now you can always look at what you’re actually doing and determine whether your current actions [are working toward] your future, the future things that you want for yourself.
I think a lot of us never spend the time write out what we actually want or to visualize what we actually want with life. And so you end up going to school, you go to college, and you’re there just to get a good job and make money, but you don’t really map out what that job is and what you like to do versus what you don’t like to do. You end up being just a pinball in life.

I literally put people in my life to help hold me accountable. The best way I’d say to balance between delayed gratification and enjoying where you are today is having those accountability buddies who can tell you straight up, “Hey, you’re slacking,” or “Hey, you’re doing a good job.” But you can also map out against your own goals and wants for yourself, and [ask], are my actions actually adding up to this? 
GI: You write in the book that carrying high-interest debt, like credit card debt, and simultaneously investing is like putting the heat on high during the winter in Green Bay, Wisconsin, while also keeping the windows wide open. Can you explain?
BC: Sometimes folks are putting money in the market to try to get 6%, 9%, 10%, 12%, whatever, when they may be making the minimum payment on their credit card or no payment at all, which would be even worse, and they’re paying 18% [as an interest rate].
You are automatically locking in a losing scenario for yourself that you’re not going to be able to outpace. More

Warren East, who led Arm between 1994 and 2013, said there have been criticisms that lackluster growth and poor rates of GDP per head in the U.K. are a source of national “embarrassment.”
He added that too often tech firms in Britain move their operations overseas or list elsewhere abroad.
“I think we have a lot to offer in terms of U.K.-based innovative technology,” East said, adding: “We tend not to be able to realise as many global businesses as that promise would suggest.”

Warren East, former CEO of Rolls Royce and Arm, speaking at a tech event in London on June 13, 2022.
Luke MacGregor | Bloomberg via Getty Images

CAMBRIDGE, England — The U.K. is doing a bad job of commercializing technology businesses globally and needs a mindset shift from the investor community to win on the world stage, a former CEO of British chip design firm Arm said Tuesday.
In a keynote speech at Cambridge Tech Week, Warren East, who led Arm between 1994 and 2013, said that there have been criticisms that lackluster growth and poor rates of GDP per head in the U.K. are a source of national “embarrassment.”

He added that too often firms that achieve scale in Britain have a tendency to change locations from the U.K. or list abroad in countries such as the U.S., due to difficulties with achieving global relevance from the country.
“I think we have a lot to offer in terms of U.K.-based innovative technology,” East told the audience at Cambridge Tech Week. However, he added: “We tend not to be able to realise as many global businesses as that promise would suggest.”
East was also previously the CEO of U.K. aviation engineering giant Rolls-Royce. He is currently a non-executive director on the board of Tokamak Energy.
East said that Britain “needs to get commercialization right,” adding that too much innovation gets created in the U.K. but is then exported elsewhere around the world.

There is “sadly a common story of all the wonderful stuff that gets made in Britain and then gets commercialized and exploited elsewhere,” East said. He added that he doesn’t have a “silver bullet” solution on how to fix the issue, but suggested that the U.K. needs to encourage more “risk appetite” to support high-growth tech firms.

“We’re often told that the problem isn’t the startup bit, it’s the scale up bit,” East said, explaining that there are far deeper pools of capital presence in the U.S. “Investor risk appetite in the U.S. is higher than it is in the U.K.,” he said
East noted that there have been pushes among the British entrepreneurial community and VCs for a change to capital market rules that will allow more investments from pension funds into startups and “stimulate risk appetite” in the U.K.
“Fortunately I think we can expect more of that over the coming years,” East told attendees of the Cambridge event. However, he added: “Businesses can’t guarantee that’s going to happen, and can’t wait for the rules to change.”
Last year, Arm, whose chip architectures can be found in most of the world’s smartphone processors, listed on the Nasdaq in the U.S. in a major blow to U.K. officials and the London Stock Exchange’s ambitions to hold more tech debuts in Britain.
The company remains majority-owned by Japanese tech giant SoftBank. More