His graduate studies helped him propel Banco Popular to the advent of change—electronic banking with direct debit at the point of sale and the proliferation of Automatic Teller Machines (ATMs) were among the first projects he undertook from the programming perch. The bank made quick work of implementing the use of debit cards at cash registers and establishing ATMs, eventually known locally as ATHs in the early 1980s.
Carrión did these things while experiencing economic turbulence when Banco Popular’s stock tumbled to pennies on the dollar only to come back to a safe haven as one of the top banks in the United States with net revenues totaling $833 million in 2025 as the bank’s executive chairman.
The Fireside Chat
Rafael Rojo (RR): Iran-US, 10 weeks into a conflict. Oil over $107 a barrel. How do you see all of this, and what do you think this means for the world?
Richard Carrión (RC): I think you have the answer in your question. The key word is volatility. Every day we wake up and what are we going to read? Right now, the most concerning thing is Iran and its impact on oil prices, and that impacts us severely here in Puerto Rico. The price of oil has a big impact. You mentioned the war in Ukraine. So, what is the future of NATO? Is the U.S. going to continue to back NATO if Russia continues its expansion?
Closer to home, you have an island too far from here called Cuba, and that’s undergoing quite a bit of strain right now, and we don’t know what’s going to happen there. That is surely going to impact us. There is a very specific policy in this hemisphere, a national security policy, which I would urge you to read. It’s only 26 pages. It’s the so-called Dunrow Doctrine, and it spells out current U.S. policy in this hemisphere.
You have the situation you mentioned with China, which obviously has changed with all these tariffs. It has changed, and the tariffs have been ruled illegal, but there’s a new way to get tariffs back on the table again. Supply chains have been disrupted. And last, but certainly not least, is the impact of artificial intelligence, [its significance], and how is that going to disrupt different businesses?
The key is volatility and how businesses need to adapt to a world that is constantly changing, and we have to be nimble. We have to move faster, because the world is moving a lot faster, and we are not immune from it.
RR: So, moving into the United States, Jerome Powell’s term ends in eight days [as the chair of the Federal Reserve]. Kevin Warsh will be succeeding him. It seems there are political pressures at the Fed where some think there should not be any. Many would like to see interest rates drop, and it seems like different pressures are pushing in different directions. Howeverthe economy and the markets have shown incredible resiliency. How do you see all of this? Do you see U.S. economy stronger or more fragile than it looks?
RC: Without a doubt, the economy is a lot stronger than it was 10 years ago. However, the shocks that we talked about earlier are a lot stronger. So, it is a stronger economy, but it’s subject to a lot more volatility than it was 10 years ago.
When I served on the board of the Federal Reserve Bank of New York for eight years, and in 2009 when Tim Geithner, who was the president of the Federal Reserve Bank of New York at the time, was named Treasury Secretary under President Obama, I formed part of a committee to interview candidates to replace Tim as president of the Reserve Bank of New York.
Kevin Warsh was one of those candidates. So, I did meet Kevin at the time. We were all very impressed with him. We ended up selecting Bill Dudley because we thought he would work better with Tim, and we thought he had more market experience. But we were all extremely impressed with Kevin.
He was, at the time, a governor of the Federal Reserve Board in Washington, DC. So he knows the Fed well. He does have his views. I don’t think he will be the puppet of President Trump.
I think it will be very difficult, given the current environment, for rates to be lowered anytime soon. I don’t think we will see lower rates this year, and beware of anybody predicting interest rates because they’ll surely be wrong. But I really don’t see interest rates coming down this year.
Given the worldwide situation, given the price of oil, given all these inflationary pressures, I don’t see it coming down.
And I don’t see Kevin Warsh buckling under political pressure. I think he understands the importance of an independent monetary policy. He understands the importance of an independent Federal Reserve Board. So, I think he will hew to that line. That said, I also think he will reduce the role of the Fed. I think he will be less interventionist than the last couple of chairs have been. I think he will reduce the balance sheet of the Fed, which he was very much against the quantitative easing policy of the Fed.
I think you will see the balance sheet reduce rather quickly. But I think ultimately, he will maintain the independence of the Fed.
The role of Leadership in Puerto Rico’s Economic Recovery
RR: I want to pull you to a side question from this. Any leader in this room, young leaders and not so young as well; it’s very hard to row a boat, a company, through such uncertain times. You have led incredible institutions through several cycles, a lot of uncertainty. How would you tell young and not so young leaders to handle these uncertain times? What should they be doing during this uncertainty?
RC: Well, I think you do what you do best. You focus on what you know how to do. That’s the key thing. We have to work on our strengths, and that’s what I have found to be the most important thing.
Work from your strength, your discipline; there are things you cannot control. You cannot control the price of oil. You cannot control what is going on in the rest of the world. But what you can control, you prepare for the worst and you hope for the best.
You know that in your business. You’ve been through a couple of cycles. Your business is notoriously cyclical. But you know how to do it, you know how to keep your cost in line. You know that sometimes you can tend to overbuild. So, after you’ve been through one, you know you can weather the next one. That’s what you do.
Workforce Independence
RR: We used to be able to know how to control cost, and this environment is getting… every time it seems to be harder and harder. Let’s start moving into Puerto Rico. Twenty percent of Puerto Rico’s [gross domestic product] GDP are federal fund sources. And again, there is an immense amount of talent in Puerto Rico. How do we start and what concretely does it take for Puerto Rico to start stepping away from federal fund dependence?
RC: Well, a couple of things. First, I find that the current generation is a lot more entrepreneurial than the previous couple of generations. I find young people are much more optimistic and willing to start businesses, and they have all these tools that help them to start businesses. I think that is cause for optimism.
Secondly, this culture of dependency. I don’t think that’s gotten any better. We have regulations in place that punish people when they enter the workforce. And we have created a whole segment of the population that is prevented from going into the workforce because they face a higher marginal tax rate than you and I, if they go into the workforce, because they have these benefits they lose.
I think that’s something that needs to be worked on. We need to take away those restrictions that are not allowing those people to become part of the workforce, and that are acting as a large disincentive and creating a mindset that is just destroying the moral fiber of a segment of the population. In addition to that, you have a tax code that does not encourage investment and risk-taking, and that’s a whole separate code.
But if you want to get rid of dependency, you have to encourage independence. And we’re not encouraging independence, and you don’t want a whole segment of the population to be alienated because what Carlos [Penzini] was talking about when he made his opening remarks, that’s exactly what happens. That’s where those kinds of ideas thrive in that segment of the population.
RR: One of the big opportunities that I believe Puerto Rico has as a U.S. jurisdiction, is that we are blessed with what a company would call free CapEx [capital expenditures]. We have a lot of federal funding, some of them being used, some of them sitting there ready to be used. But I think everybody would probably agree that some more capital will be needed if we want to finish rebuilding our infrastructure.
And onshoring capital will be needed to show up in Puerto Rico. You are an operating capital partner at J.C. Flowers, so you understand capital markets well. Do you see capital willing to show up in Puerto Rico for the last funding that we might be needing for infrastructure and for onshoring?
RC: Well, the short answer is yes. If the right incentives are in place, the short answer is yes. There’s a lot of opportunities here. What I think we have to try to do is make sure that this plethora of federal funding that has come in as a result of the hurricanes and natural disasters, and the fact that we’ve had this fiscal board in place to restructure the debt—have to make sure that once that is over, that it was not just a sugar high, but rather that we have created some structural things to make sure that we have an economy that can keep on growing.
And I’m not sure that is going to be the case. I think we have to struggle to make sure that we do have the infrastructure in place. The biggest piece of that is, of course, the electrical grid, and all of us suffer through that every day. Sorting that out is going to be key and is going to be very fundamental to the progress of Puerto Rico. But there’s a large, just a huge number of opportunities here.
Puerto Rico is right now going through a very good phase, and we need to take advantage of that to make sure that we don’t waste this chance. We have reduced the debt. We have a lot of government funding available. We need to take advantage of that, finish building the infrastructure, make sure we have incentives in place, and then bring more capital in without a doubt.
