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Sean Campbell

Chief Economist, Head of Policy Research

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Michael Chasen

Research Associate, Policy Research

<h3>Introduction</h3>In a&nbsp;<a href="https://financialservices.house.gov/calendar/eventsingle.aspx?EventID=408768">hearing</a>&nbsp;on Tuesday focused on recent failures of regional banks, banking regulators repeated their&nbsp;<a href="https://financialservicesforum.cmail20.com/t/r-i-ttjiduky-l-t/">intention</a>&nbsp;to propose new capital rules for banks who have been a source of strength in recent months, the U.S.-based Global Systemically Important Banks, or GSIBs.&nbsp;These new requirements are expected to significantly increase capital requirements for these banks.A new report, <a href="https://www.pwc.com/us/en/industries/financial-services/library/basel-iii-endgame.html#:~:text=Basel%20III%20Endgame%20is%20a,%2Dweighted%20assets%20(RWA)">Basel III Endgame: The next generation of capital requirements</a>, sheds important light on the state of large bank capital in the United States.&nbsp; The findings from PwC, the global audit and consulting firm, are helpful for assessing both the current state of capital at the largest U.S. banks and any potential need for additional capital.&nbsp; In this blog, we provide a brief overview of the PwC report and its key findings.&nbsp; Overall, the report shows that 1) capital and resiliency at the largest U.S. banks is strong, 2) the level of capital maintained by the largest U.S. banks is in line with academic findings on the optimal level of bank capital, 3) increasing capital requirements on this group of banks will impose a direct cost on the economy, and 4) raising bank capital requirements will hasten the migration of activity from the banking sector to the less regulated non-bank sector and impair financial stability.&nbsp; The report and its findings should be seriously reviewed and considered by policymakers as they consider new capital rules for the nation’s largest banks.&nbsp; On balance, the report strongly suggests that any new capital requirements would incur more costs than benefits to the economy.<h3>The Largest U.S. Banks are Well Capitalized and Resilient</h3>Since the financial crisis, U.S.-based Global Systemically Important Banks (GSIBs), have increased their capital levels substantially. As the report shows in the chart below, common equity tier 1 capital (CET1), the highest quality of regulatory capital, has more than tripled to $881 billion.&nbsp;<figure class="image"><img src="https://fsforum.com/a/media/screen-shot-2023-05-16-at-4.08.42-pm.png"><figcaption>Source: Basel III Endgame: The next generation of capital requirements</figcaption></figure>&nbsp;And while the report clearly documents the significant and notable rise in capital at the largest U.S. banks, it also outlines the substantial improvements in resiliency through other, non capital-related initiatives, such as liquidity requirements, total loss absorbing capacity (TLAC) requirements, and a host of other important regulatory initiatives.&nbsp; Importantly, the authors note that understanding and accounting for these additional sources of resiliency are crucial when evaluating the “right” level of capital for the banking system because these other initiatives support and complement capital requirements.&nbsp; As an example, the chart below from PwC clearly demonstrates the large increase in liquidity resources from roughly $500 billion to nearly $3 trillion– or more than a six-fold increase – that supports and buttresses capital requirements.&nbsp;<figure class="image"><img src="https://fsforum.com/a/media/screen-shot-2023-05-16-at-4.08.57-pm.png"><figcaption>Source: Basel III Endgame: The next generation of capital requirements</figcaption></figure>&nbsp;&nbsp;<h3>Capital at the Largest Banks Consistent with Academic Research on “Optimal” Levels</h3>The new report also offers an important review of academic studies on the optimal level of capital in the banking system.&nbsp; This is an important part of the report because while documenting the significant increase in capital and resiliency is important, ultimately, we need a coherent analytical framework to assess “how much is enough?”The report reviews a broad range of relatively recent academic research on this topic.&nbsp; And importantly, the report reviews academic studies that consider a “broad range” of post-crisis regulations (e.g., TLAC, liquidity requirements) because of the inherent importance of considering the entire regulatory framework when assessing the optimal level of bank capital.&nbsp; The chart below summarizes the findings.&nbsp;&nbsp;<figure class="image"><img src="https://fsforum.com/a/media/screen-shot-2023-05-16-at-4.09.11-pm.png"><figcaption>Source: Basel III Endgame: The next generation of capital requirements</figcaption></figure>&nbsp;As shown in the chart and stated in the report, “the average optimal capital level that the papers suggest is near current levels at firms expected to be subject to Basel III Endgame capital requirements.”&nbsp; Moreover, it is worth noting that the average optimal capital level is “pushed up” by the results of a study from the Federal Reserve, which finds an optimal ratio of 20 percent, substantially higher than the findings of all other academic studies considered in the report.&nbsp; Accordingly, statements that large bank capital levels are inconsistent with the findings of academic research are simply incorrect.<h3>Increasing Capital at the Largest U.S. Banks will Impose Direct Costs on the Economy, Hasten the Migration of Activity to Non-Banks, and Impair Financial Stability</h3>In addition to documenting the resilience and capital adequacy of the largest U.S. banks, the report also provides important evidence on the impact of increasing capital standards on these institutions.&nbsp; Specifically, the report recognizes two key drawbacks to inappropriately high capital requirements: 1) higher borrowing costs for businesses and consumers, and 2) increased migration of banking activities outside the banking sector.In terms of the direct costs of increasing capital, the report points to a range of research, finding, “greater capital requirements increase a commercial bank’s funding costs, which increases its lending rates and reduces its loan volumes,” thus reducing economic activity.&nbsp; As an example, one of the papers reviewed in the report finds that increasing the risk-based capital ratio by two percentage points (e.g., increasing the requirement from 10 percent to 12 percent) would increase the cost of borrowing by roughly a quarter percentage point and reduce GDP by roughly a quarter percentage point.The report also considers the impact on the economy via a migration of activity outside the banking sector.&nbsp; More specifically, the report finds that non-banks may expand as a result of higher bank capital requirements pushing activity outside of the banking sector and may increase the chances of financial crises, “The potential increase in probability of a crisis would be driven by greater leverage in less regulated and less transparent financial intermediaries, and the potential increase in cost would be due to resiliency of the credit supply being reduced.” &nbsp;&nbsp;<h3>Conclusion</h3>PwC’s report on the largest U.S. banks provides a lot of important food for thought for regulators as they consider proposing higher capital requirements for the largest U.S. banks.&nbsp; Overall, the report finds that resiliency at the largest banks has been strengthened considerably and is at levels broadly consistent with recommendations offered by independent research studies.&nbsp; The report also rightly points to the costs of inappropriately increasing capital requirements – both in terms of the direct costs and the financial stability costs of an expanded non-bank sector.&nbsp; The Federal Reserve is conducting a “holistic review” of bank capital.&nbsp; The PwC report serves as an excellent template for such a review.&nbsp; The report is data-based, draws on a broad array of academic research, and, importantly, is fully public and transparent.&nbsp; The data, methods, and analysis contained in the report and its conclusions can be reviewed by anyone.&nbsp; We believe that the Federal Reserve should make its holistic review as open and transparent as the PwC report.&nbsp; Based on the findings, there is no convincing evidence to suggest that the largest U.S. banks are in need of more capital and increasing requirements would come at a cost.&nbsp; If the Federal Reserve holds a different view, it should be willing to provide its findings in a clear, open, and transparent manner before moving ahead with any policy prescriptions.&nbsp;&nbsp;&nbsp;&nbsp;

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We advocate for sound policies that recognize the importance of ensuring that banks are able to support the economy, compete internationally, and remain strong. In particular, the Forum supports a review of the GSIB surcharge, a capital requirement that was agreed to internationally, but that U.S. regulators have implemented in a manner that places higher requirements on U.S. banks than that required of foreign competitors. 

The Forum has also weighed in on an international assessment of post-crisis reforms and the clear need to differentiate between jurisdictions and to acknowledge the progress made in the United States.


Capital and Financial Stability

A Holistic Review of Large Bank Capital: Findings from a New Report

Large U.S. banks are subject to stricter capital requirements and maintain more equity capital on their balance sheet than their European competitors. Over time, internationally agreed-upon capital rules have been implemented more stringently in the United States than in Europe. As a result, and quite perversely, international efforts to create a level playing field have resulted in an unlevel one.&nbsp;Regulators around the globe are now engaged in implementing another round of internationally agreed-upon capital reforms, known as Basel 3 Finalization. And once again, there are clear signs that U.S. regulators will implement these reforms more stringently than other regulators, further widening the capital disparity between large U.S. and European banks. In this post, we document the existing capital disparity between large U.S. and European banks and then discuss the implications for further regulatory tightening by U.S. regulators. Unnecessarily tighter capital regulation in the U.S. will increase the cost of lending by U.S. banks while diminishing their ability to compete with their foreign competitors.&nbsp;&nbsp;&nbsp;<h3>A Comparison of U.S. and European Large Bank Risk-Based Capital Requirements</h3>Large, internationally active banks are all subject to capital requirements that are informed by internationally negotiated standards and are set forth by the Basel Committee on Banking Supervision.&nbsp; Capital is a critical resource for banks, ensuring that they can absorb losses associated with lending, other services, and changes in the economy. But capital is an expensive form of bank funding. The Basel committee was formed in 1975 for the purpose of creating bank regulatory standards that are consistent across member jurisdictions. Once standards are adopted by Basel, each country codifies those standards into regulation at the national level.Figure 1 below compares the weighted average risk-based capital requirement – in percentage terms – that applies to the eight members of the Financial Services Forum as well as 12 large banks headquartered in Europe – the UK (3), Switzerland (1), and the European Union (8). Each of these institutions is designated as a Global Systemically Important Bank (GSIB). The figure displays the overall level of required capital as well as the constituent components.&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<figure class="image"><img src="https://fsforum.com/a/media/screen-shot-2023-05-03-at-7.37.47-pm.png"><figcaption>Source: Federal Reserve Y-9C, Company Annual Reports</figcaption></figure>&nbsp;As shown in the figure, large U.S. banks are subject to a risk-based capital requirement of 11.3 percent versus a requirement of 9.9 percent for large European banks. As Basel capital regulation is intended to create equal standards across jurisdictions, one is led to ask – why are capital standards so much higher in the U.S.?U.S. capital requirements are higher in the U.S. primarily for two reasons.&nbsp; First, the eight U.S. GSIBs are subject to a higher GSIB surcharge – an additional capital charge for GSIBs – than those in Europe, because the Federal Reserve applied a surcharge that is tougher than the Basel GSIB standard. In the left-hand bar chart, we show that the higher GSIB surcharge (Additional U.S. GSIB) results in an additional 1.0 percent requirement. Second, large U.S. banks are subject to the Federal Reserve’s stress tests, which are then translated into a bank-specific stress capital buffer (SCB). Large U.S. banks are subject to an average SCB of 4.1 percent. Prior to the adoption of the SCB by the Federal Reserve, large U.S. banks were subject to a 2.5 percent capital conservation buffer (CCB) that is prescribed by Basel and applied also to large European banks. As a result, the SCB results in an additional requirement of 1.6 percent (Additional SCB) that does not apply to European banks.&nbsp;It should be noted that large European banks are subject to an additional set of Pillar 2 capital requirements that are not applied to U.S. banks. Still, the punitive nature of both the U.S. GSIB surcharge and SCB result in required capital for large U.S. banks that is 1.4 percentage points higher than that required of large European banks. In dollar terms, U.S. GSIBs are required to hold $100 billion more capital than their European competitors due to these more stringent requirements.<h3>A Comparison of U.S. and European Large Bank Equity Capital Levels</h3>An analysis of U.S. and European capital standards is informative, but how do these different capital standards translate into the amount of equity capital maintained by large U.S. and European banks?&nbsp; After all, banks typically maintain equity capital beyond their regulatory requirements to have a prudent cushion, and they consider a host of other factors, such as market conditions and the state of the economic cycle, in determining how much equity capital to maintain on their balance sheets.Figure 2 displays the ratio of equity capital (Total Assets – Total Liabilities) to total assets for large U.S and European banks. These ratios account for well-known, but technical differences in how U.S. and European banks report their total assets. Also, these ratios are based on total asset measurements that do not account for risk. As a result, these ratios cannot be directly compared to the risk-based requirements described above, but are informative for assessing the overall amount of equity maintained by each group of banks.&nbsp;<figure class="image"><img src="https://fsforum.com/a/media/screen-shot-2023-05-03-at-7.38.00-pm.png"><figcaption>Source: Federal Reserve Y-9C, Company Annual Reports</figcaption></figure>&nbsp;As shown in the figure, U.S. GSIBs maintain 8.1 percent of total assets in equity capital as opposed to 5.7 percent for large European GSIBs. This clearly demonstrates that the higher requirements set by U.S. regulators directly translate into higher amounts of equity capital maintained by large U.S. banks.&nbsp;<h3>The Further Tilting of the Unlevel Playing Field</h3>As we have documented, large U.S. banks are subject to more stringent capital requirements and maintain more equity capital on their balance sheets than large European banks. This disparity directly contributes to competitive inequity because banks with lower capital requirements can fund their lending cheaper and undercut banks subject to more stringent requirements.The central aim of Basel III Finalization was to increase the quality and quantity of European bank capital to improve the competitive landscape. However, the European Union is proposing to implement these reforms in a manner that deviates from the Basel standards. More specifically, the <a href="https://www.eba.europa.eu/sites/default/documents/files/document_library/Publications/Reports/2022/Basel%20III%20monitoring%20report/1039929/Annex%20-%20EU%20specific%20analysis.pdf">European Banking Authority</a> estimates that the EU approach will result in 3.2 percentage points less capital than would be achieved if the reforms were implemented in line with the Basel agreement.&nbsp;If the U.S. implements Basel III Finalization in a way that is more stringent than that adopted by the EU, the competitive inequities will be worsened, and there will be significant and unnecessary costs to the U.S. economy. In particular, the cost of bank lending by U.S. banks will rise while eroding their ability to compete with their foreign competitors. U.S. regulators can implement the standards in a way that avoids these results. And given the obvious strength and resilience of the largest U.S. banks, it has every reason to do. &nbsp;

U.S. vs. European Capital Adequacy - The Increasingly Unlevel Playing Field Unfolding in Basel III Finalization

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Kevin Fromer

President and Chief Executive Officer

The rapid and disorderly failures of Silicon Valley, Signature, and Silvergate banks last month quickly unleashed calls for more bank regulation, before there was time to even begin an assessment of what had taken place. Hopefully, informed policymakers will let careful review of the facts and issues be the basis for any targeted recommendations that the public can consider and debate.&nbsp;During this period, the strength of the largest U.S. banks – which are subject to the most stringent regulation and supervision – has never been in doubt. In fact, as they did during the pandemic, the nation’s largest banks have acted as a source of strength and supported the broader banking sector to avoid further turmoil and cost to the economy.Recent bank failures have been characterized by a classic “bank run” dynamic in which a lack of liquidity was the key source of vulnerability. In the case of Silicon Valley Bank (SVB), the first line of defense was the management itself, followed by supervisory oversight, to ensure that as the bank grew rapidly, its management had the information and judgment to manage its unique deposit profile and customer base, it had adequate liquidity, and eventually, access to capital.Only thorough reviews by authorities, independent arms like the GAO, and oversight committees of Congress will help reveal if additional requirements might have prevented these bank runs. A clear focus will be on liquidity risk – or the need to manage the duration and liquidity profile of a bank’s assets and liabilities – which is the most fundamental risk in banking. Such risk is addressed by a set of requirements that are designed to regulate and inform bank management’s assessment of its ability to meet its liquidity needs. But liquidity risk is wholly unrelated to the risk that is targeted by capital regulation – credit risk. The largest U.S. banks meet the most stringent liquidity and capital requirements. They are also subject to the strictest and most stringent supervisory program on an ongoing basis.Even though the collapse of SVB and Signature Bank had nothing to do with the existing capital regime for large banks, there are some who simply respond by saying that more capital solves any problem. However, the capital standards that apply to the largest U.S. banks never applied to these or similarly sized banks. Notably, when the Biden administration called for changes to the bank regulatory regime, none was suggested for the largest banks.Despite this, U.S. regulators are considering changes to large bank regulation, including the final elements of the Basel capital reforms, on top of an already robust capital framework to which the largest U.S. banks fully adhere. Final Basel reforms were first contemplated before our nation’s largest banks had been tested through a real-life stress test of the pandemic, and more recently, a period of significant uncertainty in the banking sector. Throughout it all, the nation’s largest banks have been a source of strength and proven their resilience. Consequently, the onus should be on regulators to prove an increase in capital is necessary or wise for the largest U.S. banks, given the inevitable negative impact on the costs of lending and the real economy, and the continued migration of risk to the less regulated non-bank sector. Over the next several months, making the right choices for borrowers, savers and the economy will be critical.&nbsp;<blockquote>The Difference Between Capital and LiquidityImportantly, requirements for liquidity and capital are distinct. Liquidity is the cash and other assets banks have available to quickly meet short-term business and financial obligations. Capital encompasses the resources banks maintain to absorb losses in times of stress and continue to serve customers, clients, and communities. <a href="https://www.federalreserve.gov/faqs/cat_21427.htm">Learn more</a>.</blockquote>&nbsp;&nbsp;

Large Bank Capital Requirements and Recent Bank Failures – Why One Has Nothing to Do with the Other

BankNotes Blog

Dear reader,Welcome to the latest edition of The Forum File. In this edition, we are highlighting the vital work the nation’s largest banks are doing to protect customers from financial fraud, the Forum’s work on bank capital requirements, and a look at our contributions to communities across the country and to promoting a diverse workforce.We hope you enjoy reading this edition and please do not hesitate to share your feedback.Kevin Fromer, President and CEO, Financial Services Forum&nbsp;<h2>Penny For Your Thoughts</h2>Combating Financial Frauds and Protecting Customers: Insights from Mike Steinbach, Citi's Head of Global Fraud Prevention<h3>&nbsp;</h3><h3>What fraud trends is Citi monitoring right now?</h3>At Citi, we serve as a trusted partner for our clients in the fight against fraud by offering dedicated services and easy-to-use, effective tools to stay ahead of scammers. As the Head of Global Fraud Prevention, I have seen financial fraud’s ongoing and rapid evolution from classic physical card theft and account data compromise to sophisticated social engineering schemes.Unfortunately, the impact of cyberattacks and cyber-enabled fraud on global consumers' finances grows yearly. The U.S. Federal Trade Commission <a href="https://www.ftc.gov/news-events/news/press-releases/2023/02/new-ftc-data-show-consumers-reported-losing-nearly-88-billion-scams-2022">data show</a> consumers reported losing $8.8 billion in 2022, a 30 percent annual increase from 2021. Although all fraud is on the rise, like many financial institutions, we are combatting a significant increase in several types:&nbsp;<ul><li>Check fraud:&nbsp;Criminals create or alter checks to illegally withdraw funds from a victim's account, using techniques such as forging signatures, altering check amounts, or creating counterfeit checks.</li><li>Authorized payment frauds:&nbsp;Fraudsters trick individuals into making payments to them, often posing as a trusted entity.</li><li>Money mules:&nbsp;Criminals recruit people to move illicit funds through their bank accounts, often without the individual being fully aware of the scope of the activity.</li><li>First-party fraud:&nbsp;Individuals intentionally defraud financial institutions by submitting incorrect information or abusing credit facilities.</li></ul><h3>Given the rapid growth in fraud, what tools does Citi offer to help customers protect their accounts?</h3>Citi offers tools to prevent, identify, and stop fraud, most of which are opt-in to accommodate customer preferences and reduce friction:<ul><li>Biometric Authentication:&nbsp;Citi Trusted Identity allows enrolled customers the ability to securely manage and monitor their trusted devices. Biometric authentication allows customers to sign onto the Citi Mobile App with their fingerprint, facial recognition, or an iris scan.</li><li>Comprehensive Fraud Management: Citi proactively notifies credit card customers of potential suspicious account activity, and customers can choose to deny suspicious transactions before they happen.</li><li>Account alerts:&nbsp;Highly customizable alerts via Citi Mobile push notifications, email or text help customers monitor their account activity for anything unusual with their balance, payments, spending, and more.</li><li>Citi Quick Lock:&nbsp;This feature allows customers to temporarily freeze misplaced debit and credit cards, blocking new purchases and ATM withdrawals while allowing recurring transactions to continue.</li></ul><h3>What is the broader industry's outlook on the future of fraud?</h3>Fraud has become increasingly sophisticated in the past five to 10 years, with cyber tools enabling criminals to steal at an unprecedented speed and scale. This trend is only growing, as cyber security experts <a href="https://cybersecurityventures.com/cybercrime-damage-costs-10-trillion-by-2025/">anticipate</a> global fraud and cybercrime costs may grow by 15 percent annually over the next five years. Today’s criminals range from individuals to nation states and sophisticated criminal enterprises ­­– and they are all eager to get ahead in this increasingly lucrative shadow industry.To combat their efforts, Citi uses an intelligence-led, threat-driven approach to target fraud throughout the customer journey and fraud lifecycle. This strategy, combined with state-of-the-art tools and top talent, contributes to Citi's position as an industry leader for maintaining low fraud rates, demonstrating our commitment to our customers' financial security.&nbsp;<h2>Value Add</h2>At Citi, our customers are part of our fraud team&nbsp;<figure class="image"><img src="https://fsforum.com/a/media/screen-shot-2023-05-16-at-11.10.10-am.png"></figure>&nbsp;Citi customers themselves play a crucial role in fighting fraud, as they are often the most knowledgeable about their spending habits and can quickly detect suspicious activity.Our research shows that customers feel a shared responsibility for preventing fraud on their accounts and do their part by monitoring their accounts and signing up for alerts. We see alerts as a crucial tool – among many – in helping customers stay ahead of scammers and keeping their accounts safe.Still, customers vary in their knowledge of best practices to avoid fraud, creating an opportunity for Citi and other financial institutions to educate them on fraud prevention and provide clear, actionable solutions.Put simply, proactive customer education is essential for preventing, detecting, and tackling fraudulent transactions. As such, we continually work to stay ahead of scammers and empower consumers with knowledge and information for fraud prevention.That’s why we regularly update <a href="http://citi.com/fraudprevention">citi.com/fraudprevention</a>, for example, to keep customers informed of emerging and common frauds and make it easy for customers to spot red flags to remain secure.Our commitment to empowering and educating our customers in the evolving fight against fraud is unwavering, and we always seek out new ways to safeguard their financial wellbeing.&nbsp;&nbsp;<h2>Capital Gains</h2>What we’re doing in Washington&nbsp;The Securities and Exchange Commission’s proposed rule “Safeguarding Advisory Client Assets” would significantly harm investors and financial markets and exceeds the commission’s regulatory authority, according to a new&nbsp;<a href="https://fsforum.com/a/media/joint-trades-sec-safekeeping-comment-_final.pdf">comment letter&nbsp;</a>filed by the Forum, the American Bankers Association, ABA Securities Association, and the Bank Policy Institute. The associations urged the commission to withdraw and resubmit a proposal that is better targeted to the commission’s objectives.Forum President and CEO Kevin Fromer issued a <a href="https://fsforum.com/news/fed-svb-report-does-not-support-focus-on-large-bank-capital-requirements">statement</a> in response to the Federal Reserve’s review of its supervision and regulation of Silicon Valley Bank: “One should not conflate a liquidity-driven event marked by management failures and supervisory shortcomings with capital adequacy at the largest U.S. banks. The assertion in the introduction that the Fed should focus on large bank capital requirements is disconnected from the report’s conclusions.” Fromer highlighted the stringent capital and liquidity requirements the largest U.S. banks meet, and how these banks have remained a source of strength and support.&nbsp;&nbsp;<h2>Our Two Cents</h2>Research from the Forum&nbsp;The BankNotes Blog Spotlighted:&nbsp;<ul><li>The <a href="https://fsforum.com/news/u-s-vs-european-capital-adequacy-the-increasingly-unlevel-playing-field-unfolding-in-basel-iii-finalization">unlevel playing field</a> created by the existing capital disparity between large U.S. and European banks, and how further regulatory tightening by U.S. regulators will increase the cost of lending by U.S. banks while diminishing their ability to compete with their foreign competitors.</li><li>A <a href="https://fsforum.com/news/large-bank-capital-requirements-and-recent-bank-failures-why-one-has-nothing-to-do-with-the-other">discussion</a> of why recent bank failures had no connection to the existing capital regime for the largest U.S. banks, and how these banks have acted as a source of strength and supported the broader banking sector to avoid further turmoil and cost to the economy.</li></ul>&nbsp;&nbsp;<h2>Checking the Balance</h2>Members in the news&nbsp;Bank of America <a href="https://newsroom.bankofamerica.com/content/newsroom/press-releases/2023/05/bank-of-america-awards-negro-leagues-baseball-museum--1m-grant-f.html">awarded a $1 million grant</a> to the Negro League Baseball Museum’s capital campaign to build a new 30,000 square-foot facility in Kansas City, Mo. The grant will support the museum’s work to expand programming, create new interactive displays and build a larger archival and storage space.BNY Mellon has been <a href="https://www.bnymellon.com/us/en/about-us/newsroom/company-news/bny-mellon-wins-top-honors-at-global-custodian-awards.html?cid=SEC_OSM_NASECMC_SEC_ASD_2110_327_GlobalCustodianAward_ALLSEG_PUB_GL_TWT_____">recognized</a> by Global Custodian publication as Global Custodian of the Year and was also awarded Deal of the Year for its work with Aviva Investors. “When considering the nominees across our Editors’ Choice Awards this year, BNY Mellon stood out in multiple categories, underscoring what we already knew was a stellar year for the organization,” Global Custodian managing editor Jonathan Watkins said.Citi&nbsp;was&nbsp;<a href="https://www.citigroup.com/global/news/press-release/2023/citi-ranked-number-one-u-s-affordable-housing-lender-for-2022#_blank">recognized</a>&nbsp;as the Top U.S. Affordable Housing Lender for the 13th&nbsp;straight year in Affordable Housing Finance Magazine’s annual ranking. Citi Community Capital provided approximately $6 billion to finance more than 35,000 affordable housing units in 2022 throughout the United States, and over $7.4 billion to finance multifamily affordable housing, education, and other community development projects in 2022.Goldman Sachs <a href="https://www.goldmansachs.com/media-relations/press-releases/2023/ombw-announcement-03-apr-2023.html">announced</a> that its One Million Black Women initiative has deployed $2.1 billion in investment capital over the past two years. The program has supported a total of 137 organizations and projects to date, providing over $23 million in philanthropic capital, with the goal of positively impacting the lives of one million Black women across the United States by 2030.JPMorgan Chase, in partnership with the Center for Nonprofit Advancement, <a href="https://www.jpmorganchase.com/news-stories/nonprofit-investment">invested</a> $350,000 in eight D.C.-based nonprofit organizations led by Black women. The organizations will receive technical assistance, health and wellness support, and leadership and business coaching and training. “This will help me with my general operating budget, hire staff and keep the venue up," Congress Heights Arts and Culture Center executive director Keyonna Jones said.Morgan Stanley <a href="https://www.morganstanley.com/press-releases/successful-year-of-the-equity-collective-">announced</a> a successful first year of “The Equity Collective,” a 27-member group of wealth and asset management businesses who joined together to educate, empower and develop diverse leaders in the finance industry. To date, more than 3,900 students have been impacted through the group’s partnership with organizations such as hellohive, Team IMPACT and Boys &amp; Girls Clubs of America.State Street was recently <a href="https://www.fair360.com/top-50-list/2023/">included</a> in Diversity Inc’s 2023 Top 50 Companies for Diversity list for the second consecutive year. The list recognizes companies that perform well in six areas of workplace fairness, including talent programs, philanthropy, workplace practices, human capital metrics, supplier diversity and human capital metrics.Wells Fargo and the T.D. Jakes Group <a href="https://newsroom.wf.com/English/news-releases/news-release-details/2023/Wells-Fargo-and-T.D.-Jakes-Group-Announce-Ten-Year-Strategic-Partnership-to-Build-Inclusive-Communities/default.aspx">announced a strategic partnership</a> to drive economic vitality and inclusivity in communities across America. Over the next 10 years, the partnership between these organizations could result in up to $1 billion in capital and financing from Wells Fargo, as well as grants from the Wells Fargo Foundation, with the goal of revitalizing neighborhoods, fostering economic opportunity and creating long-term change in communities most in need.

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The Forum File, 2023 Edition #3

Dear reader,Welcome to the latest edition of The Forum File. In this edition, we are highlighting our firms’ work to support people in historically underserved communities.We hope you enjoy reading this edition and please do not hesitate to share your feedback.Kevin Fromer, President and CEO, Financial Services Forum&nbsp;<h2>Penny For Your Thoughts</h2>Kevin McCarthy, Senior Executive Vice President and General Counsel at BNY Mellon&nbsp;<h3>BNY Mellon recently won the 2023 City Bar Justice Award from The New York City Bar Association. How do you promote employee engagement in pro bono efforts?</h3>We strongly encourage Legal Department employees to devote time each year to community focused work like pro bono volunteerism, and it is embedded into our employees’ goal-setting and performance-management process. To support this, BNY Mellon has a robust employee giving and volunteer program with a variety of benefits like company matching for employees’ donations to the charities of their choice and three days of paid volunteer time. All told, we’ve provided about $5 million in consulting services to non-profits and individuals in need over the last five years. With our pro bono program, we work on a diverse range of projects, many of them focused on racial justice initiatives.&nbsp;<h3>How does BNY Mellon measure the program’s success?</h3>Our pro bono program aligns to our firm’s overall philanthropic strategy -- to use our skills and power to provide impactful legal services to underserved communities across our global network. Our program is inclusive to everyone – attorneys and our employees in other functions – to maximize its impact. To measure the success of the program annually we monitor our employee participation metrics, analyze feedback from the organizations and people we support and reflect on the impact of our body of pro bono work. There is always room to widen our reach, strengthen our impact and be more inclusive.<h3>What kind of impact does the program have?</h3>I have the pleasure of serving on the board of the BNY Mellon Foundation and I’ve seen first-hand the impact of the company’s $20 million, multiyear commitment to education and workforce development organizations on both individuals and communities. Funding scholarships for first-generation students at impressive institutions like the City University of New York and Historically Black Colleges and Universities can have a life-changing impact on young people and their families. Driven by our unwavering commitment to upholding human rights, BNY Mellon and its employees have responded to humanitarian crises in places like Afghanistan, Ukraine, and Turkey to meet the needs of vulnerable populations and protect refugees.<h3>Can you expand on BNY Mellon’s Covid-19 relief and recovery efforts?</h3>At the start of the COVID-19 outbreak, we helped to bolster the global health infrastructure by collaborating with organizations like the CDC Foundation, International Medical Corps, the New York Blood Center, Ad Council and Save the Children as well as organizations providing critical equipment and resources to those on the frontlines and most impacted by the virus. In 2020, the company facilitated nearly $6 million in funding to COVID relief and recovery worldwide and double-matched employee donations to the cause.&nbsp;<h2>Value Add</h2>How BNY Mellon leverages its role in global financial markets to make a positive impact on society.&nbsp;<figure class="image"><img src="https://fsforum.com/a/media/bny-value-add-image.png"></figure>&nbsp;BNY Mellon’s scale and significance place it in a privileged position, but also grant the firm the responsibility of helping the financial system work better for everyone. From Treasury Services to Clearance and Collateral Management to Pershing, BNY Mellon can export its positions and global capabilities to communities around the world through strategic alliances with other financial firms.BNY Mellon’s commitment to improving diversity and inclusion extends to the markets in which the firm operates. A highlight of some of its <a href="https://www.bnymellon.com/us/en/about-us/our-clients.html">recent collaborations with diverse businesses:</a><ul><li>Howard University: BNY Mellon worked to establish BOLD Shares, to help support students of Howard University and boost retention rates. This investing initiative has recently grown to over $4.3 billion in assets after just over a year, as of April 14, 2023.</li><li>Optus: &nbsp;BNY Mellon works with South Carolina-based Optus Bank, a federally designated Minority Depository Institution, to expand its capacity, market reach and community reinvestment opportunities with BNY Mellon products, services and infrastructure.</li><li>Loop Capital:&nbsp; By leveraging BNY Mellon resources, minority owned Loop Capital gained a single access point to the full breadth of BNY Mellon’s business, and a full suite of services including expertise in bonds, equities, international trading, investment banking, public finance and clearing services.</li></ul>The firm is making proactive and deliberate efforts throughout 2023 to include more communities in successful commercial outcomes.&nbsp;<h2>Capital Gains</h2>What we’re doing in Washington&nbsp;<div class="raw-html-embed"><iframe width="560" height="315" src="https://www.youtube.com/embed/f_rozDEEpe4" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen=""></iframe></div>The Forum released its latest Policy Cents <a href="https://fsforum.com/news/understanding-the-role-of-big-banks-in-american-competitiveness">video</a> featuring Chief Economist Sean Campbell on large banks and the important role they play in supporting American competitiveness abroad. Watch the latest video and the rest of our series <a href="https://fsforum.com/news/category/policy-cents/1/9">here</a>.Following the Federal Reserve’s release of its annual bank stress test scenarios, the Forum issued a <a href="https://fsforum.com/news/financial-services-forum-statement-on-2023-stress-test-scenarios">statement</a> highlighting the strength and resiliency of the nation’s largest banks.The Forum <a href="https://fsforum.com/a/media/what-they%E2%80%99re-saying--policymakers-on-capital-levels-and-the-largest-banks.pdf">highlighted</a> how policymakers voiced that the nation’s largest banks are resilient and well capitalized.&nbsp;<h2>Our Two Cents</h2>Research from the Forum&nbsp;The BankNotes Blog Spotlighted:<ul><li>An <a href="https://fsforum.com/news/large-bank-resiliency-during-an-economic-crisis-the-covid-stress-test">analysis</a> of the impact of counterfactually high COVID-related losses to Forum banks, without the government’s fiscal support, demonstrating that without the massive fiscal support and in the face of counterfactually high hypothetical losses, Forum member capital levels would have remained robust, allowing them to support the economy during the pandemic.</li><li>The ways in which <a href="https://fsforum.com/news/large-banks-broad-economic-reach-and-highly-efficient">large banks provide significant benefits to the economy</a> and how their size and scope help them to efficiently achieve the primary function of the banking sector – connecting savers and borrowers.</li></ul>&nbsp;<h2>Checking the Balance</h2>Members in the newsBank of America&nbsp;<a href="https://newsroom.bankofamerica.com/content/newsroom/press-releases/2023/02/bofa-community-development-banking-provides-record--7-85-billion.html">announced</a>&nbsp;its Community Development Banking (CDB) business provided $7.85 billion in loans, tax credit equity investments, and other real estate development solutions in 2022 to help build strong, sustainable communities through affordable housing and economic development across the country. This marked its sixth consecutive record year of financing. CDB also invested $200 million in Historic Tax Credits and New Markets Tax Credits to help restore historically significant buildings and create more than 1,300 affordable housing units.BNY Mellon&nbsp;has been&nbsp;<a href="https://www.bnymellon.com/us/en/about-us/newsroom/company-news/bny-mellon-receives-award-from-american-red-cross-in-honor-of-nearly-four-decades-of-philanthropy.html">honored</a>&nbsp;with the American Red Cross Corporate Leadership Award for the firm’s dedication to giving back and making an impact in communities through philanthropy. The American Red Cross and BNY Mellon have worked together for nearly four decades to support people and communities rebuilding&nbsp;in times of crisis.&nbsp;The&nbsp;Citi&nbsp;Foundation&nbsp;<a href="https://www.citigroup.com/global/news/press-release/2023/citi-foundation-announces-inaugural-global-innovation-challenge-to-empower-nonprofits-improving-food-security-around-the-world">announced</a>&nbsp;its first-ever&nbsp;<a href="https://www.citigroup.com/global/foundation/programs/global-innovation-challenge">Global Innovation Challenge</a>&nbsp;to help scale the impact of nonprofits around the world that are developing innovative solutions to improve food security. This inaugural challenge will provide a collective $25 million to 50 organizations to support the piloting or expansion of ideas and projects that are designed to address this issue and strengthen the physical and financial health of low-income families and communities.Goldman Sachs’&nbsp;10,000 Women initiative&nbsp;<a href="https://www.axios.com/2023/03/08/goldman-ifc-women-entrepreneurs-opportunity-facility">announced</a>&nbsp;that its partnership with the&nbsp;<a href="https://www.ifc.org/">International Finance Corporation</a>, The&nbsp;<a href="https://www.ifc.org/wps/wcm/connect/topics_ext_content/ifc_external_corporate_site/bf/focus-areas/bf-sme/bf-weof">Women Entrepreneurs Opportunity Facility</a>, has reached over 164,000 women entrepreneurs, surpassing the target of 100,000 set at launch nine years ago, and has provided over $4.5 billion in loans to women-owned businesses. The first-of-its-kind global facility is dedicated to promoting access to finance for women-owned small and mid-size enterprises through financial institutions.JPMorgan Chase&nbsp;<a href="https://www.jpmorganchase.com/news-stories/jpmorganchase-deploys-2-million-to-advance-tech-equity-in-miami">announced</a>&nbsp;the deployment of the first $2 million across four organizations to advance racial equity in the Miami tech sector. BrainStation, a program of Miami Foundation, CodePath, Rebrand Cities, and YWCA of South Florida working with gener8tor, will each receive $500,000 to empower underrepresented Miamians to enter and thrive in the tech industry through technology workforce training, career services and support for small businesses. In 2022, JPMorgan Chase announced it was committing $10 million toward the $100 million Tech Equity Miami initiative.Morgan Stanley&nbsp;<a href="https://www.morganstanley.com/press-releases/second-cohort-of-innovation-award-winners">announced</a>&nbsp;the second cohort of winners of its&nbsp;<a href="https://www.morganstanley.com/about-us/giving-back/childrens-mental-health-awards">Alliance for Children’s Mental Health Innovation Awards</a>, an initiative that aims to identify and fund transformative mental healthcare solutions for children and young adults across the U.S. Each of the winning organizations will receive a $100,000 grant to help scale its solutions, as well as support through training on nonprofit management topics from experts in the field, awareness-raising and additional fundraising opportunities.State Street&nbsp;<a href="https://clicktime.symantec.com/15tStbc2ijHvVfh7tQCW6?h=7gBNZQa4Tf5tt2GVYO4raluT6GP9PGi3UHIl_ntcEro=&amp;u=https://www.caconferenceforwomen.org/">sponsored</a>&nbsp;the 3rd&nbsp;annual California Conference for Women. The mission of the conferences is to promote, communicate and amplify the influence of women in the workplace and beyond. Influential experts led practical workshops on the issues, including leadership, career advancement, workplace equity and inclusion, health, work/life balance and more.Wells Fargo&nbsp;<a href="https://newsroom.wf.com/English/news-releases/news-release-details/2023/Wells-Fargo-Announces-50-Million-Grant-to-NAACP/default.aspx">announced</a>&nbsp;a $50 million grant to the NAACP, the nation’s largest civil rights and social justice organization. The grant will assist NAACP local units and branches and will support their work to grow strategic partnerships with key businesses in communities across the country. In addition, at the national level, the grant will support the NAACP’s work on policy solutions used to address the&nbsp;needs of the communities it serves. The grant is the single largest donation the civil rights organization has received to date.

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The Forum File, 2023 Edition #2

Dear reader,Welcome to the latest edition of The Forum File. In this edition, we are highlighting our firms’ work to promote financial health in low- and moderate-income communities.We hope you enjoy reading this edition and please do not hesitate to share your feedback.Kevin Fromer, President and CEO, Financial Services Forum&nbsp;<h2>Penny For Your Thoughts</h2>Christine Channels, Head of Community Banking and Consumer Governance, Bank of America&nbsp;<h3>What programs does Bank of America have to help people in low- and moderate-income communities improve their financial health?</h3>Financial health is at the root of strong, sustainable communities, and helping our clients build a solid financial foundation is fundamental to everything we do. We strive to connect our clients to products and services, job opportunities, and capital to increase financial resilience and help local communities thrive.One example of how we bring these commitments to life in local communities is through our recently <a href="https://newsroom.bankofamerica.com/content/newsroom/press-releases/2022/12/bofa-to-offer-free-financial-counseling-in-17-u-s--markets-throu.html">announced</a> plans to expand access to free financial counseling in partnership with Operation HOPE. We’ve partnered with Operation HOPE for 30 years to support our shared mission of addressing economic inequality, financial illiteracy, and inequitable access to capital. Our program is designed to engage the underserved and improve the financial health of millions of people across the country.We have already seen great results. On average, clients increased their yearly savings by $4,313; improved FICO scores by 21 points; and reduced annual debt by $837. We are expanding this program, called HOPE Inside™, to 180 of our financial centers in 17 U.S. markets beginning this year.<h3>How important is financial literacy to achieving financial goals, and how does Bank of America help close the financial education gap?</h3>We believe that financial health begins with awareness and financial education. A decade ago, we launched Bank of America’s Better Money Habits®, a free, online platform that connects people to relevant resources, tools and guidance to help them take control of their finances.With programming available in both English and Spanish, Better Money Habits provides resources and advice on topics such as <a href="https://bettermoneyhabits.bankofamerica.com/en/saving-budgeting/">budgeting and saving</a>, <a href="https://bettermoneyhabits.bankofamerica.com/en/debt">paying down debt</a>, <a href="https://bettermoneyhabits.bankofamerica.com/en/home-ownership">homeownership</a>, <a href="https://bettermoneyhabits.bankofamerica.com/en/retirement">retirement</a> and more. These tools help people make informed financial decisions, putting them on the path to financial success. Better Money Habits is driving people to make real, lasting change to financial behaviors and improve their financial lives.Outside of Better Money Habits, our teams are here to help clients set a foundation, build and strengthen credit and save if they can. We support and guide them as they think through, plan, and ultimately achieve their short- and long-term goals, step-by-step.Our resources range from offerings in Bank of America’s mobile app, including our AI-driven virtual financial assistant, Erica®, to activating our own employee volunteers, known as Better Money Habits Champions, to improve the financial wellbeing of communities across the country.<h3>How do these tools and programs help Bank of America make a difference in the communities in which it operates?</h3>Our goal is always to help our clients&nbsp;build strong financial foundations. We help address financial inequality by focusing on how we can best meet the diverse needs of our clients, ultimately strengthening communities in the process. This requires a comprehensive approach.In addition to our partnership with Operation HOPE, and resources such as Better Money Habits, we demonstrate our commitment to these communities through Community Banking: we have over 700 financial centers designated for community banking, and approximately 30% of our financial centers and ATMs are in low- and moderate-income and majority-minority communities. We have committed $15 billion to affordable homeownership, and another $15 billion through a commitment to the Neighborhood Assistance Corporation of America (NACA), with whom we share a 26-year partnership. Additionally, our efforts to advance racial and gender equality, economic opportunity and environmental sustainability include $2 billion in bonds and $2 billion invested with Community Development Financial Institutions to advance small businesses.&nbsp;<h2>Value Add</h2>Bank of America Investment in Minority Funds&nbsp;<figure class="image"><img src="https://fsforum.com/a/media/istock-1293175094.jpg"></figure>&nbsp;Bank of America’s investments in minority-focused funds provide capital to Black, Hispanic-Latino, Asian, Native American and other minority and women entrepreneurs to help them establish and grow their businesses. These equity investments address a persistent gap in access to growth capital for funds led by diverse managers and equity funding for the minority entrepreneurs they support.In January 2021, Bank of America <a href="https://newsroom.bankofamerica.com/content/newsroom/press-releases/2021/01/bank-of-america-announces-investments-in-40-private-funds-focuse.html#:~:text=Today%2C%20Bank%20of%20America%20announced,capital%20for%20minority%2Dled%20businesses.">announced</a> investments in 40 private funds focused on minority entrepreneurs. In May that year, the bank announced that it was increasing its target for equity investment in minority-focused funds from $200 million to $350 million. To date, the company has surpassed its target, committing over $400 million in more than 100 minority funds. The funds will in turn deploy more than $7 billion in capital to U.S. small and mid-sized enterprises, primarily led by diverse and/or women entrepreneurs.Beyond capital, our innovative approach is yielding broader benefits to the entire investment community. As an early investor in many instances, Bank of America serves as a catalyst, enabling emerging fund managers to attract other potential investors. The bank also provides these fund managers with access to other funds, investors and vendors by creating connectivity within the venture capital community.These investments are a component of Bank of America’s overall commitment to advancing racial equality and economic opportunity, which focuses on social issues in minority populations, such as health, jobs, education, housing and capital inequality.&nbsp;<h2>Capital Gains</h2>What we’re doing in Washington&nbsp;The Forum launched its new <a href="https://fsforum.com/news/category/policy-cents/1/9">Policy Cents</a> video series featuring Forum experts as they break down complex topics in the financial industry. In our first Policy Cents <a href="https://www.youtube.com/watch?v=Jc_a9tk6Ojw&amp;t=37s">video</a>, Forum Chief Economist Sean Campbell discusses the basics of bank capital and dives deeper into how capital requirements for large U.S. banks affect the entire economy. Stay tuned for our next Policy Cents video on large banks and the role they play in helping U.S companies compete internationally.&nbsp;<figure class="image image-style-align-center image_resized" style="width:75%;"><a href="https://www.youtube.com/watch?v=Jc_a9tk6Ojw"><img src="https://fsforum.com/a/media/screen-shot-2023-02-08-at-4.48.37-pm.png"></a></figure>&nbsp;In response to a proposal from the Federal Reserve Board, the Forum <a href="https://fsforum.com/news/forum-submits-comments-to-the-federal-reserve-board-regarding-proposed-guidance-on-climate-related-financial-risk">commented</a> on the agency’s efforts to provide guidance for banks to address climate-related financial risk and provided specific recommendations on how the proposal could be adjusted. The Forum’s feedback was similar to that provided to the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency in response to their earlier proposals.The Forum <a href="https://fsforum.com/news/financial-services-forum-announces-new-board-leadership-1">announced</a> that State Street Chairman and CEO Ron O’Hanley had been elected to serve as the chair of its board and Citigroup CEO Jane Fraser had been elected to serve as vice chair. O’Hanley replaced Goldman Sachs Chairman and CEO David Solomon, who served as chair of the Forum for two years. Fraser replaced O’Hanley, who served as vice chair. “The Forum is an important voice in Washington for our nation’s largest banks,” O’Hanley said. “I thank David for his outstanding work guiding our board, and I look forward to leading the organization at a critical moment for our country. The institutions that I and my colleagues lead have shown that they are a bulwark for the economy even in the midst of many challenges, most notably a global pandemic. The Forum will continue to prioritize working with policymakers to foster a strong financial system that supports a vibrant, healthy economy for all Americans.” Said Fraser, “I am proud to join Ron in leading the Forum as we work to promote policies that maintain a strong, safe and sound banking sector, which is vital to the health of households, large and small businesses, and to the competitiveness of the U.S. economy.”<h2>&nbsp;</h2><h2>Our Two Cents</h2>Research from the ForumThe BankNotes Blog spotlighted <a href="https://fsforum.com/news/fixing-what-ain-t-broken-the-real-and-hidden-costs-of-excessive-bank-capital-regulation">research</a> on both the direct and indirect costs of bank capital regulation and how a substantial increase in bank capital requirements could raise annual borrowing costs by roughly 0.25 percentage points, costing the economy over $100 billion per year and also incentivizing continued growth of the shadow banking sector.&nbsp;<h2>Checking the Balance</h2>Members in the newsBank of America is <a href="https://newsroom.bankofamerica.com/content/newsroom/press-releases/2023/01/bofa-investing-up-to--150-million-in-middle-income-housing-prese.html">investing</a> up to $150 million to preserve more than 3,000 affordable homes nationwide in partnership with Enterprise Community Partners, one of the nation’s largest affordable housing organizations. The partnership will foster the long-term preservation of middle-income homes by investing equity capital to acquire properties that are at risk of being converted into unaffordable, market-rate homes.BNY Mellon’s&nbsp;Treasury Services business&nbsp;<a href="https://www.bnymellon.com/us/en/about-us/newsroom/company-news/bny-mellon-named-best-global-trade-finance-provider-2023.html">received</a>&nbsp;two awards in Global Finance’s World’s Best Trade Finance Providers 2023 Awards, reflecting its commitment to providing innovative trade finance capabilities. The bank was named “Best Trade Finance Provider – Bank” in both the Global and North America categories, highlighting BNY Mellon’s role as a robust and reliable trade finance provider, as well as the firm’s efforts in driving innovation through investments in new technologies.In January, Citi released its latest report on supply chains, entitled: “<a href="https://financialservicesforum.createsend1.com/t/r-i-tjkidrhk-l-a/">Supply Chain Finance: Uncertainty in Global Supply Chains is Going to Stay</a>.” The report analyzes comprehensive data and survey evidence to reveal that while supply chain disruptions are subsiding, enhancing resiliency remains a top priority for businesses and institutions around the world.&nbsp;Goldman Sachs’&nbsp;One Million Black Women&nbsp;has&nbsp;<a href="https://urldefense.proofpoint.com/v2/url?u=https-3A__www.bloomberg.com_news_articles_2023-2D01-2D23_nyc-2Dgoldman-2Dsachs-2Dlaunch-2Dloan-2Dprogram-2Dto-2Dgive-2Dsmall-2Dbusinesses-2Da-2Dlift-3Futm-5Fcontent-3Dcitylab-26utm-5Fcampaign-3Dsocialflow-2Dorganic-26utm-5Fsource-3Dtwitter-26utm-5Fmedium-3Dsocial&amp;d=DwMF-g&amp;c=7563p3e2zaQw0AB1wrFVgyagb2IE5rTZOYPxLxfZlX4&amp;r=b8iCANJjLlDzgmI1DhIxZS-McRP4R7RcWpchMfWzEiw&amp;m=Ee64gkNT74BJaksT0u-d5OTjEiLcKIZQQhgsDb9TaV5hcFs0TPEr2Nefx6-8c34y&amp;s=8FosTGPykqPrY8vkftRppK-ZscUSIcH3jYwQjvSipsc&amp;e=">partnered</a>&nbsp;with Mastercard and New York City Mayor Eric Adams to create the $75 million NYC Small Business Opportunity Fund, the largest public-private loan fund for small businesses in the city’s history. The partnership will also work with&nbsp;local Community Development Financial Institutions.&nbsp;JPMorgan Chase&nbsp;President Daniel Pinto, and Head of Strategic Planning Rosa Ramos-Kwok were&nbsp;<a href="https://www.bloomberglinea.com/2022/12/13/bloomberg-linea-presents-the-list-of-the-100-most-influential-latinos-around-the-world/">named</a>&nbsp;to Bloomberg Línea’s inaugural 100 Most Influential Latinos list. The lists highlights Latinos who are leading innovation and representation throughout various industries around the globe.&nbsp;Morgan Stanley&nbsp;<a href="https://www.prweb.com/releases/peopleshores_announces_project_elevate_a_partnership_with_morgan_stanley_to_uplift_the_careers_of_the_underemployed_in_brooklyn/prweb19119125.htm">partnered</a>&nbsp;with PeopleShores on a new initiative, Project Elevate, to help elevate people in economically and socially challenged neighborhoods with technology skills and practical experience to advance their career opportunities. The companies created a Technical Talent Development and Impact Sourcing Technology Center in Brooklyn, New York, designed to educate, employ and empower participants by providing work experience and professional development.State Street&nbsp;<a href="https://clicktime.symantec.com/15tStbMhJowE2C8KQik9U?h=sB6ErmpRKZ897hQJBdnpqNKqSCw4fQqzxICJqctZXBk=&amp;u=https://newsroom.statestreet.com/press-releases/press-release-details/2023/State-Street-Partners-with-Black-Owned-Businesses-to-Underwrite-1.25-Billion-of-Senior-Unsecured-Debt/default.aspx">partnered</a>&nbsp;with four Black-owned businesses to underwrite $1.25 billion of senior unsecured debt. This partnership reinforces State Street’s commitment to strengthening Black-owned businesses and represents an ongoing effort to partner with Black and Latinx-owned investment firms, as well as firms owned by other underrepresented groups, as part of its debt offerings.&nbsp;Wells Fargo&nbsp;<a href="https://newsroom.wf.com/English/news-releases/news-release-details/2023/Wells-Fargo-Launches-20-Million-Invest-Native-Initiative-for-Native-American-Communities/default.aspx">announced</a>&nbsp;a $20 million Invest Native initiative to advance economic opportunities in Native American communities working with Native-led organizations. The initiative aims to address housing, small business, financial health, and sustainability among Native American communities in Arizona, Montana, New Mexico, North Dakota, South Dakota, and Wyoming. The announcement builds on the company’s previous five-year,&nbsp;<a href="https://newsroom.wf.com/English/news-releases/news-release-details/2017/Wells-Fargo-Commits-50-Million-to-American-IndianAlaska-Native-Communities/default.aspx?adlt=strict">$50 million commitment</a>&nbsp;to address American Indian and Alaska Native communities’ unique economic, social and environmental needs.

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The Forum File, 2023 Edition #1

The Forum File

Washington, D.C., — The American Bankers Association (ABA), Bank Policy Institute (BPI), Consumer Bankers Association (CBA), Financial Services Forum (FSF), International Swaps and Derivatives Association (ISDA), Investment Company Institute (ICI), Managed Funds Association (MFA) and the Securities Industry and Financial Markets Association (SIFMA), a group of trade associations representing broker dealers, banks, asset managers and related financial institutions of all sizes, today issued the following statement on the agreement to raise the federal debt ceiling:“We are encouraged that the Administration and Congressional leaders have reached a bipartisan agreement to raise the federal debt ceiling.&nbsp; America’s capital markets are the strongest, deepest, and most liquid in the world, and we should not do anything to jeopardize that.&nbsp;It is critically important that the United States stand fully behind its obligations.&nbsp; Failure to do so would immediately ripple through the financial system and do irreparable harm to the U.S. economy.&nbsp; &nbsp;“We respectfully urge our public leaders to finalize the debt ceiling deal and take the remaining critical steps necessary to protect our nation’s financial standing in the world.”&nbsp;###&nbsp;About the American Bankers Association: The American Bankers Association is the voice of the nation’s $23.6 trillion banking industry, which is composed of small, regional and large banks that together employ more than 2 million people, safeguard $19.2 trillion in deposits and extend $12.2 trillion in loans.Media Contact:&nbsp; Josh Britton, 202-663-7553, jbritton@aba.com&nbsp;About the Bank Policy Institute: The Bank Policy Institute (BPI) is a nonpartisan public policy, research and advocacy group, representing the nation’s leading banks and their customers. Our members include universal banks, regional banks and the major foreign banks doing business in the United States. Collectively, they employ almost 2 million Americans, make nearly half of the nation’s small business loans, and are an engine for financial innovation and economic growth.Media Contact: Sean Oblack, 202-538-4227, sean.oblack@bpi.com&nbsp;About the Consumer Bankers Association: The Consumer Bankers Association represents America’s leading retail banks. We promote policies to create a stronger industry and economy. Established in 1919, CBA’s corporate member institutions account for 1.7 million jobs in America, extend roughly $4 trillion in consumer loans and provide $275 billion in small business loans annually. Follow us on Twitter @consumerbankersMedia Contact: Billy Reilly, 412-956-6162, brielly@consumerbankers.com&nbsp; About the Financial Services Forum: The Financial Services Forum is an economic policy and advocacy organization whose members are the chief executive officers of the eight largest and most diversified financial institutions headquartered in the United States. Forum member institutions are a leading source of lending and investment in the United States and serve millions of consumers, businesses, investors, and communities throughout the country. The Forum promotes policies that support savings and investment, deep and liquid capital markets, financial inclusion, a competitive global marketplace, and a sound financial system.Media Contact:&nbsp; Barbara Hagenbaugh, 202-457-8783, bhagenbaugh@fsforum.com &nbsp;About the International Swaps and Derivatives Association: Since 1985, ISDA has worked to make the global derivatives markets safer and more efficient. Today, ISDA has over 1,000 member institutions from 78 countries. These members comprise a broad range of derivatives market participants, including corporations, investment managers, government and supranational entities, insurance companies, energy and commodities firms, and international and regional banks. In addition to market participants, members also include key components of the derivatives market infrastructure, such as exchanges, intermediaries, clearing houses and repositories, as well as law firms, accounting firms and other service providers. Information about ISDA and its activities is available on the Association’s website:&nbsp;<a href="http://www.isda.org">www.isda.org</a>. Follow us on <a href="https://twitter.com/isda">Twitter</a>, <a href="https://www.linkedin.com/company/isda">LinkedIn</a>, <a href="https://www.facebook.com/ISDA.org/">Facebook</a> and <a href="https://www.youtube.com/channel/UCg5freZEYaKSWfdtH-0gsxg">YouTube</a>.Media Contact:&nbsp; Nick Sawyer, ISDA London, +44 20 3808 9740, nsawyer@isda.org&nbsp;&nbsp; &nbsp;About the Investment Company Institute: The Investment Company Institute (ICI) is the leading association representing regulated investment funds. ICI’s mission is to strengthen the foundation of the asset management industry for the ultimate benefit of the long-term individual investor. Its members include mutual funds, exchange-traded funds (ETFs), closed-end funds, and unit investment trusts (UITs) in the United States, and UCITS and similar funds offered to investors in Europe, Asia and other jurisdictions. Its members manage total assets of $29.9 trillion in the United States, serving more than 100 million investors, and an additional $8.1 trillion in assets outside the United States. ICI has offices in Washington, DC, Brussels, London, and Hong Kong and carries out its international work through ICI Global.Media Contact:&nbsp; Stephen Bradford, 202-993-3760, stephen.bradford@ici.org About Managed Funds Association: Managed Funds Association (MFA), based in Washington, DC, New York, Brussels, and London, represents the global alternative asset management industry. MFA’s mission is to advance the ability of alternative asset managers to raise capital, invest, and generate returns for their beneficiaries. MFA advocates on behalf of its membership and convenes stakeholders to address global regulatory, operational, and business issues. MFA has more than 170 member firms, including traditional hedge funds, credit funds, and crossover funds, that collectively manage nearly $2.2 trillion across a diverse group of investment strategies. Member firms help pension plans, university endowments, charitable foundations, and other institutional investors to diversify their investments, manage risk, and generate attractive returns over time.&nbsp;Media Contact:&nbsp; Noah Theran, news@managedfunds.org&nbsp;&nbsp;&nbsp;About the Securities Industry and Financial Markets Association: SIFMA is the leading trade association for broker-dealers, investment banks and asset managers operating in the U.S. and global capital markets. On behalf of our industry’s one million employees, we advocate on legislation, regulation and business policy affecting retail and institutional investors, equity and fixed income markets and related products and services. We serve as an industry coordinating body to promote fair and orderly markets, informed regulatory compliance, and efficient market operations and resiliency. We also provide a forum for industry policy and professional development.&nbsp; SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA).Media Contact:&nbsp; Katrina Cavalli, 212-313-1181, kcavalli@sifma.org&nbsp;

Joint Financial Services Trade Associations Comment on Debt Ceiling Agreement

CONTACT: Barbara Hagenbaugh(202) 471-0436bhagenbaugh@fsforum.com&nbsp;Washington, D.C. – Financial Services Forum President and CEO Kevin Fromer issued the following statement today regarding the agreement to address the debt limit:“The Financial Services Forum urges Congress to adopt the agreement between President Biden and Speaker McCarthy to increase the debt limit.&nbsp;We appreciate the efforts of the President and his administration, and the Speaker and other members of Congress, in forging this compromise. Responsible and timely action will preserve the full faith and credit of the United States and our nation’s important position of global economic leadership.”&nbsp;&nbsp;###&nbsp;&nbsp;The Financial Services Forum is an economic policy and advocacy organization whose members are the chief executive officers of the eight largest and most diversified financial institutions headquartered in the United States.&nbsp;Forum member institutions are a leading source of lending and investment in the United States and serve&nbsp;millions of consumers, businesses, investors, and communities throughout the country. The Forum promotes policies that support savings and investment, deep and liquid capital markets, a competitive global marketplace, and a sound financial system. &nbsp;Follow us on Twitter <a href="https://twitter.com/fsforum">@fsforum</a> and <a href="https://www.linkedin.com/company/financial-services-forum/">LinkedIn</a>

Forum Urges Congress to Adopt Debt Limit Agreement

CONTACT: Barbara Hagenbaugh(202) 471-0436bhagenbaugh@fsforum.com&nbsp;Dispelling Five MythsWashington, D.C. – U.S. regulators are expected to issue a proposal to implement an international accord, known as Basel III Finalization, that would significantly raise requirements for the largest U.S. banks. In anticipation of this proposal, it is important that everyone understand the facts.&nbsp;<h3>Myth #1</h3>The largest U.S. banks need more capital.<h3>Fact:&nbsp;</h3>Policymakers have regularly <a href="https://fsforum.com/a/media/what-they%E2%80%99re-saying--policymakers-on-capital-levels-and-the-largest-banks.pdf">attested</a> to the strength and resiliency of the largest U.S. banks.Further, these policymakers – across the political spectrum – have underscored how the nation’s largest banks have supported the economy and the broader financial sector during the pandemic and recent banking events.Proof points of this strength and resiliency can be found in this week’s Federal Reserve <a href="https://www.federalreserve.gov/publications/files/202305-supervision-and-regulation-report.pdf">Supervision and Regulation report</a>, which noted, “As of the fourth quarter of 2022, banks in the aggregate were well capitalized, especially U.S. global systemically important banks (G-SIBs).”&nbsp; Further, consulting firm PwC recently <a href="https://www.pwc.com/us/en/industries/financial-services/library/basel-iii-endgame.html#:~:text=Basel%20III%20Endgame%20is%20a,%2Dweighted%20assets%20(RWA).">found</a> that the capital levels of the largest U.S. banks were in line with academic research of optimal capital levels.&nbsp;<h3>Myth #2</h3>Raising capital requirements on the largest U.S. banks does not impact the economy.<h3>Fact:</h3>Capital is connected to activity throughout the economy.According to <a href="https://www.pwc.com/us/en/industries/financial-services/library/basel-iii-endgame.html#:~:text=Basel%20III%20Endgame%20is%20a,%2Dweighted%20assets%20(RWA).">PwC</a>, higher capital requirements lead to more expensive and fewer loans for families and businesses. A particular impact could be felt by small businesses and households in historically underserved communities.Federal Reserve Chair Jerome Powell has acknowledged the negative impact to credit availability as a consequence of increased capital requirements, <a href="https://www.banking.senate.gov/hearings/02/28/2023/the-semiannual-monetary-policy-report-to-the-congress">testifying recently</a>, “It’s always a balance” and “you will at the margin provide less credit, the more capital you have to have.”Higher capital requirements also increase financial risk by pushing activity outside of the regulated banking sector while also harming the competitiveness of the U.S. banking sector, which already faces higher <a href="https://fsforum.com/news/u-s-vs-european-capital-adequacy-the-increasingly-unlevel-playing-field-unfolding-in-basel-iii-finalization">requirements</a> than foreign competitors.&nbsp;<h3>Myth #3</h3>Raising bank capital is not costly because, whatever the size of the capital increase, a “long transition period” will be provided to attenuate the costs of complying with the new and higher requirements.<h3>Fact:</h3>Costs are nearly instantaneous despite government transition periods.Financial market participants respond to new information about capital requirements and other regulatory changes as soon as they are announced, irrespective of government transition periods.&nbsp; As a result, banks act to come into compliance with new rules in a matter of months following announced policy changes.&nbsp; The costs, therefore, are borne in full shortly after being announced.&nbsp;Indeed, <a href="https://www.clevelandfed.org/publications/working-paper/2022/wp-2211-the-impact-of-the-basel-iii-reforms-in-the-united-states">research</a> from the Federal Reserve documents that in the case of the implementation of Basel III, banks began to increase their capital ratios “prior to the publication of the specific language applicable to US banks” and that “bank responses we estimate take place well before the Basel III rules started to come into force after 2014.”&nbsp;&nbsp;<h3>Myth #4</h3>New and higher Basel III Finalization capital requirements will only impact large banks’ trading activities.<h3>Fact:</h3>New and higher capital requirements will impact a broad range of functions at the largest banks, including lending.Basel III Finalization is expected to impact a wide array of bank lending activities as it contains significant changes across the entire capital framework. Some have estimated that the new capital rules will increase overall capital – across the entire bank – by up to 20 percent.&nbsp; Specifically, the new capital requirements, as agreed to internationally, contain a new methodology for capitalizing operational risk that is applied across the entirety of a bank’s balance sheet. Basel III Finalization also contains significant changes to the capital rules that are expected to impact corporate and consumer lending.&nbsp;<h3>Myth #5</h3>Large banks only serve large corporations.<h3>Fact:&nbsp;</h3>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.Forum members – the eight U.S.-based Global Systemically Important Banks – hold roughly $85 billion in <a href="https://fsforum.com/a/media/u.s.-gsibs-are-committed-to-helping-small-businesses-across-the-country.pdf">small business loans</a>, representing roughly one-third of all small business loans made by banks.&nbsp; Additionally, Forum members reach small businesses all across the country and in all industry segments. Throughout the pandemic, Forum members facilitated $94 billion in loans to nearly 1.25 million small businesses through the government Paycheck Protection Program (PPP). More than a quarter of these loans were made in low- and moderate-income communities and 91 percent of the PPP loans made by Forum members went to businesses with 20 or fewer employees.The nation’s largest banks are also an important source of financing for Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs). U.S. GSIBs have invested nearly $9 billion in CDFIs and $500 million in MDIs and provide technical assistance and employee training to maximize the important reach CDFIs and MDIs have into underserved communities.Moreover, U.S. GSIBs meet two-thirds of the funding needs of other financial institutions made by banks. This supports the ability of institutions such as community banks, insurance companies, and mortgage finance companies to provide important services to businesses and households.&nbsp;&nbsp;###&nbsp;&nbsp;The Financial Services Forum is an economic policy and advocacy organization whose members are the chief executive officers of the eight largest and most diversified financial institutions headquartered in the United States.&nbsp;Forum member institutions are a leading source of lending and investment in the United States and serve&nbsp;millions of consumers, businesses, investors, and communities throughout the country. The Forum promotes policies that support savings and investment, deep and liquid capital markets, a competitive global marketplace, and a sound financial system. &nbsp;Follow us on Twitter <a href="https://twitter.com/fsforum">@fsforum</a> and <a href="https://www.linkedin.com/company/financial-services-forum/">LinkedIn</a>

Capital Requirements for the Largest U.S. Banks – Separating Fact from Fiction

Press Releases

This op-ed was featured in the <a href="https://www.americanbanker.com/opinion/dont-delay-public-input-on-feds-review-of-capital-requirements">American Banker's BankThink.&nbsp;</a>&nbsp;<blockquote>Last month, Federal Reserve Vice Chair for Supervision Michael Barr outlined the Federal Reserve's agenda to make the financial system safer and fairer by improving banks' safety and soundness. Barr <a href="https://www.federalreserve.gov/newsevents/speech/barr20220907a.htm">called for a holistic review</a> of the bank capital framework, including a review of leverage and capital requirements for large banks. We welcome the Fed's review. And we urge the Fed to be more transparent about it.</blockquote>Mr. Barr is right. Currently, the U.S. capital framework is comprised of a dizzying array of moving parts: risk-weighted assets, stress capital buffers, surcharges on global systemically important banks, countercyclical buffers and leverage buffers, just to name a few. All these requirements are implemented separately, sometimes with several years between rules. No singular element of the capital regime determines overall capital requirements — rather, the various constraints knit together in complex and unpredictable ways to determine the overall amount of capital required of large banks. Given that capital requirements strongly influence the cost and amount of lending by banks in our economy, getting the mix of requirements right is critical, as is transparency around this process.&nbsp; Right now, all we know is that the Fed expects to complete its review this fall, and will only seek public input on proposed capital rules that are informed by the findings of the review after it is complete. We don't know much about how the review is being conducted, but we do know it is happening quickly — and without public input. But waiting for public input until so late in the game — once the direction of travel is set — is too late and risks consequential errors based on a lack of full information. The Federal Reserve should commit to seeking public feedback on its holistic review of the capital framework before the review is finalized and before any subsequent capital rules are proposed. Public feedback is crucial for several reasons.&nbsp; First, regulators' analysis can be improved by taking input from a variety of stakeholders, including academics and practitioners with significant expertise in bank capital.&nbsp; Second, public input will help ensure an evenhanded approach in reviewing the capital framework. A review solely conducted by regulators runs the risk of tipping the scales in a direction confirming existing policy preferences, even if there may be data supporting other perspectives.&nbsp; For example, studies have found that central bank-sponsored research on quantitative easing's effectiveness is more positive than other research on the topic. A full, open review of the capital framework soliciting input from a wide array of stakeholders will help ensure a thorough, unbiased and informed assessment.&nbsp; Most important, any study of the capital framework either implicitly or explicitly embeds a value judgment about the appropriate trade-off between economic growth and financial stability. Regulators are charged with maintaining financial stability, but they are not solely in charge of determining how society balances safety versus growth. Finding the right balance between growth and stability requires weighing the costs and benefits of additional financial stability measures against the impact on job creation and living standards. That debate must be informed by the views of all relevant stakeholders. The Federal Reserve and other agencies reviewing regulations routinely do so with public input. At least every 10 years, the bank regulatory agencies are <a href="https://egrpra.ffiec.gov/">required</a> by federal law to gather public input and review existing regulations. During the last cycle, regulators traveled the country for in-person meetings and collected written feedback. At one of these meetings, Federal Reserve Board Chairman Jay Powell <a href="https://www.federalreserve.gov/newsevents/speech/powell20150204a.htm">explained that</a> creating balanced, effective and thoughtfully calibrated regulations to avoid undue burden requires input from stakeholders. Researchers' review of the capital framework should also adhere to existing transparency standards for published academic research — and all of the data and analysis should be made public. The economics literature is replete with examples of studies that came to drastically incorrect conclusions because of simple data errors that were later uncovered by other researchers. Most academic journals now require that the data and programs used to conduct any analysis be made public before the results are published.&nbsp; The stakes are too high to accept even a small probability of an errant mistake. A comprehensive review of the capital framework and soliciting public input are necessary to ensure a safe and sound banking system in balance with the promotion of economic growth. Doing one without the other will be counterproductive — and risks reaching an outcome that does not reflect the needs of our economy.&nbsp;

BankThink Op-ed: Don't Delay Public Input on Fed's Review of Capital Requirements

This op-ed was featured in <a href="https://morningconsult.com/opinions/strength-of-large-u-s-banks-means-its-time-to-rely-on-rigorous-capital-distribution-process/">Morning Consult</a>.&nbsp;<blockquote>Later this week, the Federal Reserve will issue results of its latest round of stress tests, offering an update on the health and safety of the largest banks in the country. This assessment marks the third round of stress tests the government has conducted in a year to measure the capital adequacy of large U.S. banks.</blockquote>These results will herald the full return to the government’s normal capital distribution oversight <a href="https://www.federalreserve.gov/newsevents/pressreleases/bcreg20210325a.htm">process</a>, which was halted in 2020 due to the uncertain economic effects of the pandemic. Given the strength of the nation’s largest banks and the rapid improvement in the economy, it is clearly time to rely on the established and rigorous regulatory process, which allows banks to return excess capital to investors across the country. This return to regular order will support the economy as we build a strong, inclusive recovery.Capital distributions are expected by investors in any large corporation. Companies in a variety of&nbsp;<a href="https://www.wsj.com/articles/companies-are-flush-with-cashand-ready-to-pad-shareholder-pockets-11621157406">industries</a>&nbsp;routinely distribute portions of their earnings to investors — it is how American companies attract investment so that they can grow, create jobs, expand services and better support the economy.Despite what critics would have you believe, the capital distribution process is not a zero-sum game. Share distributions&nbsp;<a href="https://finance.yahoo.com/news/tax-cuts-fuel-stock-buyback-spike-130545937.html?acid=twitter_yfsocialtw_l1gbd0noiom&amp;ncid=twitter_yfsocialtw_l1gbd0noiom&amp;guccounter=1">complement</a> — not replace — the investments that banks make in their communities, workers, operations and businesses. Only safe and highly capitalized banking institutions can even consider buybacks or dividends.What’s more, unlike every other industry, large financial institutions face higher regulatory scrutiny and approval to buy back shares or to issue dividends.This year, large banks must pass a strenuous stress test to demonstrate they maintain a strong capital position and can support the economy, even during a significant downturn. They must further satisfy several different regulatory capital&nbsp;<a href="https://www.federalreserve.gov/newsevents/pressreleases/files/bcreg20200304a2.pdf">requirements</a>&nbsp;each quarter to continue making planned buybacks and dividends. Then, and only then, are banks able to distribute capital.In the most recent test, which the Federal Reserve completed in&nbsp;<a href="https://www.federalreserve.gov/publications/files/2020-dec-stress-test-results-20201218.pdf">December</a>, the average post-stress capital ratio for the U.S. Global Systemically Important Banks was 9.7 percent, significantly larger than that of other U.S. banks subject to the stress tests and more than twice the minimum requirement of 4.5 percent.The largest U.S. banks entered the global pandemic in a strong position and they acted quickly to&nbsp;<a href="https://fsforum.com/our-impact/covid-19-response">support</a>&nbsp;customers, small businesses, employees and the communities in which they operate. They also&nbsp;<a href="https://fsforum.com/news/financial-services-forum-statement-on-share-buybacks">suspended</a>&nbsp;their share buybacks — which account for the majority of their capital distributions — and aggressively reserved for potential losses. Importantly, large banks’ strength and scale allowed them to significantly support the economy.In 2020, the nation’s largest banks increased their provision of&nbsp;<a href="https://fsforum.com/a/Credit_ad3853a06e/Credit_ad3853a06e.pdf">credit</a>&nbsp;by 10 percent, helping families, small businesses, large employers and the government. They accepted a massive surge in deposits and facilitated loans to nearly 850,000&nbsp;<a href="https://fsforum.com/a/COVID_19_Response_b55baf7fc3/COVID_19_Response_b55baf7fc3.pdf">small businesses</a>&nbsp;through the Paycheck Protection Program. They also committed significant resources to communities across the country, creating or preserving more than 158,000 affordable&nbsp;<a href="https://fsforum.com/a/Committed_to_Affordable_Housing_2021_4c59c48264/Committed_to_Affordable_Housing_2021_4c59c48264.pdf">housing</a>&nbsp;units, and supported their nearly 758,000 employees by giving them extra time off, paying for child and elder care and providing economic incentives.The largest banks have also been strong&nbsp;<a href="https://fsforum.com/our-impact/supporting-underserved-communities">supporters</a>&nbsp;of historically underserved communities. In addition to the work they are doing to promote lending in minority neighborhoods, they are investing in mission-driven financial institutions so that they can succeed and serve diverse and low- and moderate-income communities. From 2015 to 2020, the largest banks&nbsp;<a href="https://fsforum.com/a/cdfifactsheetfinal2021_861e28ce56/cdfifactsheetfinal2021_861e28ce56.jpeg">invested</a>&nbsp;$9 billion in Community Development Financial Institutions, and they have also&nbsp;<a href="https://fsforum.com/a/MDI_One_Pager_6a4a12345f/MDI_One_Pager_6a4a12345f.pdf">committed</a>&nbsp;more than $500 million to Minority Depository Institutions, in some cases investing directly in the MDIs to support their long-term wellbeing.The largest banks are committed to supporting their employees and the communities they serve. These institutions can and will continue to provide this support while distributing&nbsp;capital.It’s important to remember that the benefits of buybacks and dividends to the economy go far beyond the shareholders. More than half of all U.S. households own stocks, either directly&nbsp;or indirectly, according to the&nbsp;<a href="https://www.federalreserve.gov/econres/scfindex.htm">Federal Reserve</a>. Moreover, stock holdings are most concentrated among households headed by a retiree and dependent on dividends to meet their financial needs. Therefore, money returned to shareholders recirculates throughout the economy.&nbsp;It is our banks’ responsibility to those teachers, first responders, veterans and small businesses who invest in them to always use capital in the highest and most efficient way possible.As Federal Reserve Chairman Jerome Powell&nbsp;<a href="https://www.govinfo.gov/content/pkg/CHRG-115shrg32517/pdf/CHRG-115shrg32517.pdf">said</a>: “When a company buys back its shares or pays higher dividends, the resources do not disappear. Rather, they are redistributed to other uses in the economy. For instance, shareholders may decide to invest the windfall in another company, which may in turn make productivity-enhancing investments. Or they may decide to spend the windfall on goods and services that are produced by other companies, who may in turn hire new workers. In these ways, stock repurchases would also be likely to boost economic growth.”The nation’s largest banks are committed to serving our country and to building an economic recovery that supports everyone. They have been through a real-life stress test during the past year and have shown that they are safe, strong, and are a key source of support for the economy. Government oversight of share distributions by the largest U.S. banks is rigorous, and ensures the continued strength of the financial system. The fact that banks have such excess capital to reinvest in the form of buybacks and dividends is a promising sign for the economy. It is now time to rely upon a normal process of assessing our institutions, and ensuring that they may support a durable, inclusive recovery.&nbsp;Kevin Fromer is president and CEO of the Financial Services Forum, which represents the eight largest, most diversified U.S. banking institutions, and previously served as&nbsp;the Assistant Secretary of the Treasury for Legislative Affairs from 2005 to 2009.&nbsp;

Op-ed: Strength of Large U.S. Banks Means It’s Time to Rely on Rigorous Capital Distribution Process

This op-ed was featured in <a href="https://www.americanbanker.com/opinion/capital-relief-is-good-for-big-banks-and-the-economy">American Banker's BankThink</a>.&nbsp;<blockquote>The nation’s largest banks have been instrumental in supporting the economy through the coronavirus pandemic, providing vital assistance to consumers and businesses and facilitating critical financing from government programs.To ensure the banking industry can be a key source of support during the crisis, regulators rightly made temporary and targeted adjustments to certain regulations.</blockquote>Yet, some critics including in a recent&nbsp;<a href="https://www.americanbanker.com/opinion/dont-weaken-the-g-sib-surcharge">BankThink</a>&nbsp;op-ed, have shown a clear misunderstanding of big bank capital levels and the objective of the Federal Reserve in navigating one of the most serious economic crises to ever hit the U.S. and global economy.The author argues that regulators “gutted” large bank capital by temporarily excluding deposits at the Federal Reserve and U.S. Treasuries from the supplementary leverage ratio’s (SLR) risk-insensitive measure of total exposure, which determines the amount of capital required by the SLR. A few points should be noted in response.First, regulators have long held that risk-insensitive leverage capital requirements are intended to be a backstop to risk-based capital requirements. Prior to the crisis, the minimum capital requirement for a risk-based capital measure, called Tier 1, was 4% of risk-weighted assets. Today, that minimum stands at 6%, a 50% increase.What’s more, over the past decade banks have significantly improved both the quality and quantity of capital maintained. Financial Services Forum members, for instance, have grown their capital base by&nbsp;<a href="https://fsforum.com/a/forum_value_and_resiliency_2020q1_1_f835ef3ee5/forum_value_and_resiliency_2020q1_1_f835ef3ee5.pdf">$260 billion</a>&nbsp;and substantially raised capital levels as a proportion of the risk-weighted asset base.Regulators rightly made a temporary change to the SLR standard in the pandemic to help ensure that risk-insensitive leverage requirements do not move to the fore and become the binding capital constraint. This would further distress capital markets and the ability of banks to provide credit to businesses and households during an unprecedented economic disruption.Second, large banks are currently bound by the Federal Reserve’s new capital policy announced in late June with this year’s stress test results. All large banks are prohibited from making any share repurchases through the third quarter and dividend payouts are frozen at previous levels.Accordingly, it is hard to understand how large bank capital will decline significantly as the Federal Reserve has actively taken steps requiring banks to conserve capital. These measures outweigh any potential impact that the temporary change to the SLR could have.Some critics also maintain that the finalization earlier this year of the&nbsp;<a href="https://www.americanbanker.com/news/fed-finalizes-new-capital-buffer-ahead-of-2020-stress-tests#:~:text=The%20final%20SCB%20%E2%80%94%20which%20the,severely%20adverse%E2%80%9D%20stress%20test%20scenario.">stress capital buffer (SCB) rule</a>&nbsp;— which was first introduced during the Obama administration and ties large bank capital requirements to stress testing — somehow represents a big bank giveaway.Yet the Federal Reserve’s&nbsp;<a href="https://www.federalreserve.gov/newsevents/pressreleases/files/bcreg20200304a1.pdf">analysis</a>&nbsp;showed that the SCB will have the effect of raising capital for global-systemically important banks (G-SIBs) by roughly $46 billion on average, while at the same time lowering capital requirements for smaller banks. Given that the analysis shows the SCB final rule raises capital for G-SIBs, it is difficult to understand how one would assert that the SCB represents a weakening of the large bank capital regime.Also, this year the Fed opted not to set bank capital distribution policy with regard to the SCB. Rather, the Fed is using a new “sensitivity analysis” to determine bank capital distributions.This year’s sensitivity analysis found that 75% of all large banks subject to the stress tests — a universe that goes well beyond the G-SIBs — would maintain capital levels above the minimum requirement.In the parlance of the previous stress testing regime, most banks actually passed the stress tests, but are still being required to conserve capital per the Fed’s new capital distribution policy. Accordingly, the suggestion that somehow large banks are either not well-capitalized or are shedding capital simply does not add up.All of the capital modifications announced by the Fed are temporary and explicitly designed to deal with the coronavirus crisis to help ensure that banks of all sizes can continue to support the economy in this time of great need.<blockquote>Data and existing research convincingly show that large banks have been&nbsp;<a href="https://www.fsforum.com/types/press/unprecedented-increase-in-large-bank-lending-to-help-businesses-through-the-recovery/">playing an outsized role</a>&nbsp;in supporting the U.S. economy. Indeed,&nbsp;<a href="https://www.nber.org/papers/w27256">research</a>&nbsp;from Boston College and Federal Reserve staff further documents that the bulk of corporate lending during the pandemic has come from large banks, showing these institutions have risen to the occasion during such trying times.</blockquote>The Federal Reserve and other regulators are wisely and judiciously making temporary adjustments to certain capital rules to ensure that formulaic and risk-blind capital requirements do not unnecessarily cinch the flow of credit, which is so crucial to managing through this crisis. The Fed’s modification of the SLR in these exigent times is a shining example of what a good regulator should do in a crisis.It is not a “rollback” or “weakening” of anything. Rather, it illustrates the central bank’s resolve in putting the economy and people ahead of inflexible rules.As the economic and public health data clearly show, the nation is not out of this pandemic yet. Regulators should continue to prudently modify regulations that risk unnecessarily crimping private credit expansion, which would present even more challenges to an already unstable economic recovery.&nbsp;<a href="https://www.americanbanker.com/author/sean-campbell">Sean Campbell</a>Sean Campbell is chief economist and head of policy research at the Financial Services Forum.

BankThink Op-ed: Forum Head of Research Explains Why Targeted Capital Relief Makes Sense for Large Banks & an Economy in Crisis

Opinion

Letters

Comments on Notice of Proposed Rulemaking on Safeguarding Advisory Client Assets 

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Forum members recognize that climate change poses risks to the world’s economy.
The transition to a low-carbon economy will occur over several decades and requires collaboration between a wide range of industries and government. The Forum advocates for appropriate policies and international cooperation to ensure that climate policies and regulations related to the financial industry are based on science, risk, and sound methodologies.


Climate Finance

 Forum Comments to The Federal Reserve on Climate-Related Financial Risk Management Principles

Comments in Response to the Second Consultation on the Prudential Treatment of Cryptoasset Exposures

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Understanding the Role of Big Banks in American Competitiveness

Forum Chief Economist Sean Campbell discusses the important role that the nation’s biggest banks play in helping American companies compete internationally and explains how American international competitiveness is critical to ensuring the success and vibrancy of the U.S. economy.

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Large Bank Capital and the Economy

Forum Chief Economist Sean Campbell explains capital regulations for large U.S. banks and how those regulations impact small businesses, consumers, and the U.S. economy.

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Policy Cents

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ABA Media Contact: Josh Britton<a href="mailto:jbritton@aba.com">jbritton@aba.com</a>&nbsp;FSF Media Contact: Brigid Richelieu<a href="mailto:brichelieu@fsforum.com">brichelieu@fsforum.com</a>&nbsp;BPI Media Contact: Austin Anton<a href="mailto:austin.anton@bpi.com">austin.anton@bpi.com</a>&nbsp;ABA, FSF, BPI: Proposed SEC Rule Would Harm Investors, Financial MarketsWASHINGTON — The Securities and Exchange Commission’s proposed rule “Safeguarding Advisory Client Assets” would significantly harm investors and financial markets and exceeds the Commission’s regulatory authority, according to a new&nbsp;<a href="https://fsforum.com/a/media/joint-trades-sec-safekeeping-comment-_final.pdf">comment letter&nbsp;</a>filed today by the American Bankers Association, ABA Securities Association, the Financial Services Forum, and the Bank Policy Institute. The associations urge the Commission to withdraw and resubmit a proposal that is better targeted to the Commission’s objectives.“The Proposed Rule suggests broad and complex changes that represent a fundamental departure from current industry practice, and, if finalized, would cause significant harm to investors and financial markets,” the groups wrote. “Banks that provide custody services, or ‘custody banks,’ are among the most significant qualified custodians under the current rule, and play a critical, foundational role in the functioning of the global securities markets, ensuring broad operational efficiencies and high levels of investor protection. Custody banks have long offered safe, well-managed, and regulated custody services. The Commission has not identified any significant loss of traditional assets in custody that would warrant an extensive overhaul of the custody rules applicable to custody banks, as envisaged by the Proposed Rule. For reasons that are unclear, the Proposed Rule neither considers nor accommodates the bank custody model.”The groups also strongly believe the Proposed Rule’s effective regulation of custody bank operations and balance sheets exceeds the Commission’s authority.“The Proposed Rule inserts the Commission into matters at the core of the bank regulatory system and conflicts with well-established priorities in maintaining the safety and soundness of the banking sector,” the associations wrote. “The Proposed Rule is an unwarranted intrusion on matters properly left to the bank regulators.”The groups also note other areas of concern, which are explained in depth in the detailed letter:<ul><li>The treatment of cash deposits in the Proposed Rule is unworkable in practice and, where technically possible, impractical, highly inefficient, and costly to market participants.</li><li>The Proposed Rule shifts legal liability to custody banks, holding them accountable for actions well beyond their control.</li><li>The Proposed Rule’s requirement for custodians to monitor registered investment advisor authority to effect transactions will reduce market efficiency, create settlement failures, work against T+1 settlement, and increase costs for investors.</li><li>The Proposed Rule raises significant questions as to how a custody bank would provide custody and segregation of assets with respect to assets that are not cash or securities.</li><li>The Commission’s economic analysis is incomplete and inadequate, failing to account for numerous significant costs to custody banks and their customers.</li></ul>“The Proposed Rule would have a very detrimental effect on efficiency, capital formation, and competition because it would impose enormous costs on custody banks, registered investment advisors, and investors without a corresponding and offsetting benefit in risk reduction,” the associations conclude. “The economic analysis provided by the Commission fails to account for such costs and thereby fails to employ the well-reasoned decision-making required by the Administrative Procedure Act.”&nbsp;About the American Bankers AssociationThe American Bankers Association is the voice of the nation’s $23.6&nbsp;trillion banking industry, which is composed of small, regional and large banks that together employ more than 2 million people, safeguard $19.2&nbsp;trillion in deposits and extend $12.2 trillion in loans.&nbsp;About the ABA Securities AssociationThe ABA Securities Association (ABASA) is a separately chartered trade association and non-profit subsidiary of the American Bankers Association whose mission is to represent the interests of banks underwriting and dealing in securities, proprietary mutual funds and derivatives before Congress and the federal government. ABASA members are large financial institutions with significant capital markets businesses.&nbsp;About the Financial Services ForumThe Financial Services Forum is an economic policy and advocacy organization whose members are the chief executive officers of the eight largest and most diversified financial institutions headquartered in the United States. Forum member institutions are a leading source of lending and investment in the United States and serve millions of consumers, businesses, investors, and communities throughout the country. The Forum promotes policies that support savings and investment, deep and liquid capital markets, a competitive global marketplace, and a sound financial system.&nbsp;About the Bank Policy InstituteThe Bank Policy Institute (BPI) is a nonpartisan public policy, research and advocacy group, representing the nation’s leading banks and their customers. Our members include universal banks, regional banks and the major foreign banks doing business in the United States. Collectively, they employ almost 2 million Americans, make nearly half of the nation’s small business loans, and are an engine for financial innovation and economic growth.

ABA, FSF, BPI: Proposed SEC Rule Would Harm Investors, Financial Markets

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Fact Sheet

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State Street Corporation

Ron is chairman and chief executive officer of State Street Corporation. He is also a member of State Street Corporation’s Board of Directors.

Ron was previously president and chief operating officer of State Street Corporation, and before that president and chief executive officer of State Street Global Advisors, the investment management arm of State Street Corporation. He joined State Street in 2015.

Prior to State Street, Ron was president of Asset Management & Corporate Services for Fidelity Investments, responsible for all Fidelity asset management organizations and Fidelity’s corporate functions and enterprise technology. He served at Fidelity from 2010 to 2014.

Prior to joining Fidelity, Ron served as president and chief executive officer of BNY Mellon Asset Management in Boston, a position to which he was named in 2007. During this time, he also served as vice chairman of Bank of New York Mellon Corporation and was a member of its Executive Committee. Additionally, Ron oversaw all of Bank of New York Mellon’s activities in Asia. Prior to the 2007 merger of Bank of New York and Mellon, he was vice chairman of Mellon Financial Corporation and president and chief executive officer of Mellon Asset Management. He served at Mellon and Bank of New York Mellon from 1997 to 2010.

Prior to Mellon, Ron was with McKinsey & Company, Inc., from 1986 to 1997 and was elected a partner in 1992. He founded the Investment Management practice worldwide and was co-founder and co-leader of the firm’s North American Personal Financial Services practice. Additionally, he was a member of the Worldwide Property & Casualty Insurance practice. During his tenure with McKinsey, Ron served in the firm’s Boston, New York, and Stockholm offices.

Ron received his Bachelor of Arts degree in political science from Syracuse University in 1980 and his Master of Business Administration from Harvard Business School in 1986.

Ron serves on the boards of Unum Corp. and Rhode Island Commerce Corporation. He also serves on the boards of Beth Israel Lahey Health, The Boston Foundation, IYRS School of Technology and Trades, Syracuse University and WBUR. Ron’s philanthropic and civic interests include corporate governance, retirement/healthcare policy and funding, education, and climate. He has led several initiatives on gender equality. Ron is a frequent speaker and writer, and an avid offshore sailboat racer.

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Ronald O'Hanley

State Street Corporation Chairman And Chief Executive Officer, Forum Chair

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Citigroup

Jane Fraser is the Chief Executive Officer of Citi, the world's most global bank, serving millions of consumers, businesses and institutions across 160 countries and jurisdictions. She is the first female CEO in the firm’s history. Jane has deep experience across Citi’s consumer and institutional businesses and, in many ways, she helped shape Citi into the company it is today. Before becoming CEO in February 2021, she was President of Citi and CEO of the Global Consumer Bank, responsible for all of Citi’s Consumer businesses, including Retail Banking and Wealth Management, Credit Cards, Mortgage and Operations and Technology in 19 markets. Before that, she was the Chief Executive Officer of Citigroup Latin America from 2015 to 2019. From 2013 to 2015, she was the Chief Executive Officer of the U.S. Consumer and Commercial Banking and CitiMortgage. From 2009 to 2013, Jane served as the Chief Executive Officer of Citi's Global Private Bank. Prior, Jane was the Global Head of Strategy and Mergers & Acquisitions for Citi from 2007 to 2009. She joined Citi in 2004 in the Corporate and Investment Banking division.
Before joining Citi, Jane was a Partner at McKinsey & Company. She started her career at Goldman Sachs in the Mergers & Acquisitions department in London and then worked for Asesores Bursátiles in Madrid, Spain. Jane serves as a Board Member for the Business Roundtable and the Council on Foreign Relations. She is Vice Chair for the Partnership for New York City and a member of Harvard Business School’s Board of Dean’s Advisors, the Stanford Global Advisory Board and the Economic Club of New York. Jane has an M.B.A. from Harvard Business School and an M.A. in economics from Cambridge University. She is married with two children.

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Jane Fraser

Citigroup Chief Executive Officer, Forum Vice Chair

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Bank Of America

Brian Moynihan leads a team of more than 200,000 employees dedicated to making financial lives better for people, companies of every size, and institutional investors across the United States and around the world.

Bank of America is recognized as a top employer by Working Mother magazine and Military Times. The company is also listed on Fortune magazine’s list of the Best Workplaces for Diversity and the Best Workplaces for Parents. It was also named one of the Best Places to Work for Disability Inclusion by the U.S. Business Leadership Network and the American Association of People with Disabilities. In 2018, Euromoney recognized Bank of America as the World’s Best Bank and the World’s Best Bank for Diversity and Inclusion, as part of their annual Global Awards for Excellence. Bank of America was also named the 2019 Catalyst Award winner, honored for supporting the continued development, empowerment and advancement of women in the company and around the world.

Moynihan participates in several organizations that focus on economic and market trends, including the World Economic Forum International Business Council, the Financial Services Forum, the Bank Policy Institute (chair), the Business Roundtable, and the American Heart Association CEO Roundtable (co-chair). He is also a member of the Federal Advisory Council of the Federal Reserve Board.

Moynihan leads the company’s Global Diversity and Inclusion Council and is a member of the museum council for the Smithsonian’s National Museum of African American History and Culture. Moynihan is also a member of the Brown University Corporation’s Board of Fellows and the Congressional Medal of Honor Foundation Board.

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Brian Moynihan

Bank Of America Chairman Of The Board And Chief Executive Officer

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BNY Mellon

Robin Vince is President and Chief Executive Officer of BNY Mellon and a member of its Board of Directors. Previously, he was Vice Chair of BNY Mellon and CEO of Global Market Infrastructure. In that role, he oversaw BNY Mellon’s Clearance and Collateral Management, Treasury Services, Markets and Execution Services and Pershing businesses.

Prior to joining BNY Mellon in October 2020, Robin was the Chief Risk Officer of Goldman Sachs and a member of the Management Committee. He joined Goldman Sachs in 1994 and held many leadership roles, including Treasurer, Head of Operations, Head of Global Money Markets, COO of the EMEA region and CEO of Goldman Sachs International Bank, among others. He served on several key subsidiary boards and governance committees. He was named managing director in 2002 and partner in 2006.

Robin is a member of National Geographic Society's Hubbard Council and serves on the Board of Advisors of The Hospital for Special Surgery.

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Robin Vince

BNY Mellon Chief Executive Officer

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The Goldman Sachs Group, Inc.

David Solomon is Chairman and Chief Executive Officer and a member of the Board of Directors of The Goldman Sachs Group, Inc.

Previously, he was President and Chief Operating Officer and prior to that, he served as Co-Head of the Investment Banking Division from 2006 to 2016. Before that, Mr. Solomon was Global Head of the Financing Group, which includes all capital markets and derivative products for the firm’s corporate clients. He joined Goldman Sachs as a Partner in 1999.

Mr. Solomon is a member of the Board of Trustees of Hamilton College and serves on the board of The Robin Hood Foundation.

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David Solomon

The Goldman Sachs Group, Inc. Chairman and Chief Executive Officer

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JPMorgan Chase & Co.

Jamie Dimon is Chairman of the Board and Chief Executive Officer of JPMorgan Chase & Co., a global financial services firm with assets of $2.5 trillion and operations worldwide. The firm is a leader in investment banking, financial services for consumers, small business, commercial banking, financial transaction processing and asset management.

Dimon became CEO on January 1, 2006 and one year later also became Chairman of the Board.  He was named President and Chief Operating Officer upon the company’s merger with Bank One Corporation on July 1, 2004. Dimon joined Bank One as Chairman and CEO in 2000.

Dimon began his career at American Express Company.  Next, he served as Chief Financial Officer and then President at Commercial Credit, which made numerous acquisitions and divestitures, including acquiring Primerica Corporation in 1987 and The Travelers Corporation in 1993. Dimon served as President and Chief Operating Officer of Travelers from 1990 through 1998 while concurrently serving as Chief Operating Officer of its Smith Barney Inc. subsidiary before becoming co-Chairman and Co-CEO of the combined brokerage following the 1997 merger of Smith Barney and Salomon Brothers.  In 1998, Dimon was named President of Citigroup Inc., the global financial services company formed by the combination of Travelers Group and Citicorp.

Dimon earned his bachelors degree from Tufts University and holds an MBA from Harvard Business School. He serves on the boards of directors of a number of non-profit institutions including the Clearing House and Harvard Business School. Additionally, he is the Chairman of the Business Roundtable and serves on the executive committee of the Business Council and the Partnership for New York City, and is a member of the Financial Services Forum, Financial Services Roundtable and Council on Foreign Relations.

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Jamie Dimon

JPMorgan Chase & Co. Chairman And Chief Executive Officer

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Morgan Stanley

Mr. Gorman is Chairman and CEO of Morgan Stanley.

Mr. Gorman became CEO in January 2010 and Chairman in January 2012. He joined the Firm in February 2006 and was named Co-President in December 2007.

Before joining Morgan Stanley, Mr. Gorman held a succession of executive positions at Merrill Lynch. Prior to this, he was a senior partner of McKinsey & Co. and began his career as an attorney in Melbourne, Australia.

Among his civic activities, Mr. Gorman serves as a Director of the Federal Reserve Bank of New York and the Council on Foreign Relations, and is a member of the Board of Overseers of the Columbia Business School, the Monetary Authority of Singapore International Advisory Panel, the Business Council, and the Board of the Institute of International Finance.

He formerly served as President of the Federal Advisory Council to the U.S. Federal Reserve Board, Co-Chairman of the Partnership for New York City, Chairman of the Board of the Securities Industry and Financial Markets Association and Co-Chairman of the Business Committee of the Metropolitan Museum of Art.

Mr. Gorman, who was born in Australia, earned a B.A. and Law degree from the University of Melbourne and an M.B.A. from Columbia University.

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James Gorman

Morgan Stanley Chairman And Chief Executive Officer

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Wells Fargo & Company

Charles W. Scharf is chief executive officer and president, and a member of the Board of Directors of Wells Fargo & Company.

A financial services veteran with 24 years of experience in leadership roles in the banking and payments industries, Charlie served as chief executive officer of Bank of New York Mellon from July 2017 to October 2019 and the chairman of its board from January 2018 to October 2018. He also was chief executive officer and a director of Visa Inc. from October 2012 to December 2016.

During his tenure at Bank of New York Mellon, Charlie demonstrated a strong track record in initiating and leading change, driving results, strengthening operational risk and compliance, and innovating amid a rapidly evolving digital landscape.

As the CEO of Visa, Charlie transformed the firm into a technology-driven digital commerce company by partnering with the world’s leading technology companies to drive new payment experiences and introduce new technologies to improve payment system security.

Previously, he was a managing director of One Equity Partners at JPMorgan Chase & Co. and chief executive officer of Retail Financial Services at JPMorgan Chase. He also was chief executive officer of the retail division of Bank One Corp., chief financial officer of Bank One Corp., chief financial officer of the Global Corporate and Investment Bank division of Citigroup, and chief financial officer of Salomon Smith Barney and its predecessor company.

Charlie earned a Bachelor of Arts degree from Johns Hopkins University and an MBA from New York University.

He is a director of Microsoft Corporation, serves on the board of trustees of Johns Hopkins University, is a member of The Business Council, and is chairman of the New York City Ballet. He lives in New York City.

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