Dear reader,
Welcome to the latest edition of The Forum File. In this edition, we are highlighting how our members are investing in their employees throughout every stage of their careers, the Forum’s work to highlight the facts on bank capital requirements, and a look at our contributions to communities across the country.
We hope you enjoy reading this edition and please do not hesitate to share your feedback.
Kevin Fromer, President and CEO, Financial Services Forum
Penny For Your Thoughts
“At Goldman Sachs, our priority is to invest in our people, at every stage of their career— from attracting exceptional individuals with unique and diverse backgrounds to implementing effective talent development strategies and ensuring that all of our people have the resources they need to grow and thrive, both in and outside of the workplace.” – Jacqueline Arthur, Head of Human Capital Management
Mental health is a growing focus for companies following the COVID-19 pandemic. How is Goldman Sachs responding?
We believe we are only as strong as our people, as it is the people of Goldman Sachs who make our firm such an extraordinary organization. Our comprehensive benefits and wellness programs speak to our long-standing commitment to supporting our people and their families at every stage of their careers at Goldman Sachs. Our growing suite of benefits and wellness offerings include our Pathways to Parenthood program, our resilience programming, expanded leave options and financial wellness resources.
It’s important that our people know about these resources and feel that they can have an open dialogue about mental health. We are developing a global cohort of Mental Health First Aiders – colleagues who receive training and help connect our people to firm resources. Our Employee Assistance and Critical Health Solutions programs provide access to confidential counseling both on-site and outside the firm, as well as support to navigate access to quality care.
What progress is Goldman Sachs making on diversity, equity and inclusion?
Accountability is at the center of our efforts at Goldman Sachs, and we are focused on attracting and retaining diverse, extraordinary talent. We have laid out aspirational goals as a framework for the progress we plan to make in increasing diverse professionals at all levels of the firm. One of the areas where we have been investing significantly is diversity recruiting and reaching a more diverse array of candidates. Those efforts include our Returnship, HBCU Market Madness, Neurodiversity Hiring initiatives and the Veterans Integration Program, among others.
We are proud to say that these efforts have already resulted in us achieving our campus analyst hiring goals and we are welcoming a new cohort of analysts from these programs this year. Our recruiting efforts have allowed us to create a diverse pipeline of talented individuals at all levels, highlighted by our recent promotion classes of partners and managing directors – which were the most diverse in the firm’s history. We know driving progress towards these goals requires new and innovative approaches, and while we have made strides, we recognize there is more work to be done.
How is Goldman Sachs supporting and investing in its people?
First and foremost, Goldman Sachs is focused on investing in our talent, including by providing our people with new and compelling opportunities to continue to grow and develop in their careers here.
Another way we ensure that we engage the best talent from a diverse set of experiences is by creating programming designed to open a multitude of pathways to Goldman Sachs and by recruiting individuals from areas outside of finance. Among these initiatives is our Bridge to Banking program, an opportunity for a diverse set of experienced professionals to transition their prior work experience to a career in investment banking.
Our twice-annual GS People Pulse survey is particularly valuable in hearing from our people directly. An important take-away from the survey has been ensuring regular career discussions between managers and their team members – that is now codified as the Three Conversations at GS, where everyone participates in a goal-setting conversation, mid-year check in and end of year feedback discussion.
Value Add
Analyst Impact Fund
To date, Goldman Sachs has deployed $4 million in grants to nonprofit organizations driven by innovative ideas from our analysts.
The Analyst Impact Fund was designed to democratize our firm’s philanthropic giving and allow our analysts to have real and meaningful impact in the communities where we live and work. The global competition not only expands the firm’s philanthropic reach, but also serves as an important tool to engage our analysts, as they collaborate with peers across the firm to identify non-profits that are tackling global challenges and pitch innovative solutions to the firm’s leadership. They are also given the opportunity to engage with industry leaders both inside and outside of the firm.
Winning teams are awarded grants from our philanthropic fund, Goldman Sachs Gives, for their organizations. In seven years of the program, over 5,000 analysts across 48 offices have participated. In 2022, a record number of analysts from across the globe pitched more than 350 non-profits that address a range of important issues, from healthcare access and refugee support to inclusive growth.
Capital Gains
What we’re doing in Washington
Following a speech by the Federal Reserve vice chair for supervision, Forum President and CEO Kevin Fromer called on regulators to carefully consider capital changes, emphasizing that “capital isn’t free,” and that “further capital requirements on the largest U.S. banks will lead to higher borrowing costs and fewer loans for consumers and businesses – slowing our economy and impacting those on the margin hardest.”
In response to the Federal Reserve Board’s 2023 stress test results Forum President and CEO Kevin Fromer issued a statement emphasizing how the “stress test results reinforce that additional required capital is not justified. The reforms of the post-Dodd-Frank period have achieved the goals of a stronger, safer banking system.”
Following a recent speech on Basel capital proposals by the FDIC chairman, Forum President and CEO Kevin Fromer issued a statement regarding capital requirements and the largest U.S. banks: “As the chairman of the Federal Reserve has indicated, capital levels in the U.S. banking system are strong, particularly at the eight U.S.-based global systemically important banks. Furthermore, higher capital levels need to be justified because of the tradeoffs.” Fromer highlighted how these large banks have acted as a source of strength through periods of stress, and that costs to the economy after raising capital requirements would be nearly instantaneous.
In anticipation of the U.S. implementation of Basel III Finalization, which could significantly raise requirements for the largest U.S. banks, the Forum dispelled five myths with the facts:
Myth #1: The largest U.S. banks need more capital.
Fact: Policymakers have regularly attested to the strength and resiliency of the largest U.S. banks.
Myth #2: Raising capital requirements on the largest U.S. banks does not impact the economy.
Fact: Capital is connected to activity throughout the economy.
Myth #3: Raising bank capital is not costly because, whatever the size of the capital increase, a “long transition period” will be provided.
Fact: Costs are nearly instantaneous despite government transition periods.
Myth #4: New and higher Basel III Finalization capital requirements will only impact large banks’ trading activities.
Fact: New and higher capital requirements will impact a broad range of functions at the largest banks, including lending.
Myth #5: Large banks only serve large corporations.
Fact: The nation’s largest banks hold roughly $85 billion in small business loans, invest in CDFIs and MDIs, and meet two-thirds of the funding needs of other financial institutions.
Our Two Cents
Research from the Forum
The BankNotes Blog Spotlighted:
- The safety and stability of the largest U.S. banks by highlighting the exceptional diversification of their portfolios in three key loan markets: agriculture, commercial real estate, and housing.
- How unnecessarily increasing capital requirements for the nation’s largest banks will result in large costs for the economy in terms of increased borrowing costs and reduced access to credit without any significant improvement in resiliency.
- A new report from PwC, Basel III Endgame: The next generation of capital requirements, that finds that capital at the largest banks has been strengthened considerably and is at levels broadly consistent with recommendations offered by independent research studies.
Checking the Balance
Members in the news
Bank of America announced it has committed more than $500 million of equity investments to minority-led funds, more than doubling its initial $200 commitment. This investment further supports diverse entrepreneurs, helping advance racial equality and economic opportunity.
BNY Mellon announced a strategic alliance with MoCafi, a Black-founded fintech platform leading financial empowerment for traditionally underserved communities, to extend payment options to unbanked and underbanked communities in the United States. BNY Mellon’s Treasury Services business will now provide federal, state and local governments, as well as corporate clients, with a digital disbursement payment service that reaches individuals without current access to basic financial services through MoCaFi’s offering.
Citi announced that nine Veteran-owned firms acted as joint lead managers of a $3.2 billion bond issuance. This partnership strengthens Citi’s commitment to providing opportunities to the Veteran community. Since 2015, Citi has worked on approximately $200 billion in bond issuances with more than 30 firms owned by Veterans, women, or underrepresented minorities who have received more than $50 million in fees.
Goldman Sachs recently hosted its third-annual Market Madness competition, the culmination of its HBCU Possibilities Program, a four-month training in finance fundamentals from Goldman Sachs professionals. The firm awarded $5 million in grants in total, with Spelman College taking home first place and a $1 million grant. The Market Madness: HBCU Possibilities Program is a core component of Goldman Sachs’ $25 million, five-year commitment to Historically Black Colleges and Universities.
JPMorgan Chase announced the launch of its Sustainable Investment Data Solutions for institutional investors. Investors will have access to industry-leading datasets allowing them to readily extract value from sustainable investment data.
Morgan Stanley in May completed its 14th annual Strategy Challenge, the firm’s flagship pro bono program that brings together rising talent to help nonprofit organizations solve strategic, mission-critical challenges. Over 10 weeks, Morgan Stanley employees provided consulting services to 15 nonprofits. The challenge culminated in events where teams presented their recommendations. The winning U.S. team collaborated with Meeting Essential Needs with Dignity, a nonprofit focused on increasing access to fresh and healthy food for food insecure families in Essex County, New Jersey.
State Street partnered with four diverse firms to issue $2 billion of senior unsecured debt. The offering marked State Street’s eighth consecutive offering where the underwriting syndicate has been structured in a manner consistent with State Street’s inclusion, diversity and equity strategy. “We remain focused on increasing our partnership with diverse counterparts while also increasing representation and opportunities across our industry and in our communities,” said Kimberly Detrask, Treasurer at State Street Corporation.
Wells Fargo announced that it is the anchor funder of UnidosUs’ new initiative, HOME (Home Ownership Means Equity), a new initiative that seeks to influence systemic change and catalyze the creation of four million new Latino homeowners by 2030. Wells Fargo’s $10 million investment will support UnidosUs’ HOME initiative for expanding marketing opportunities and providing resources for potential homeowners as they navigate the home-buying process.