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Sean Campbell

Chief Economist, Head of Policy Research

Last week the Federal Reserve released this year’s stress test results. &nbsp;The results showed that large banks were resilient and robustly capitalized. &nbsp;Indeed, all 23 large banks were shown to maintain sufficient capital to warrant a return to shareholder distributions consistent with the Federal Reserve’s risk-based capital requirements.Figure 1 below shows how Financial Services Forum members fared in this year’s stress tests. &nbsp;As shown in the first bar in the chart, after absorbing a total of $297 billion in hypothetical losses in the severely adverse scenario, Forum members collectively maintained a capital ratio of 10 percent, which is more than double the regulatory minimum of 4.5 percent (the third bar in the chart).<figure class="image image-style-align-center image_resized" style="width:60.36%;"><img src="https://fsforum.com/a/Screen_Shot_2021_06_28_at_9_38_37_AM_7187bc8ba1/Screen_Shot_2021_06_28_at_9_38_37_AM_7187bc8ba1.png"><figcaption>&nbsp;Source: Federal Reserve Board and FSF Calculations</figcaption></figure>Some have argued that this year the stress tests were “too easy” and that the banks are only being permitted to return capital to shareholders because the test was too lenient. &nbsp;This simply doesn’t measure up with the facts. &nbsp;As shown in Figure 1, Forum members would maintain a capital ratio in excess of the minimum requirement even if the stress test losses were significantly larger than those hypothesized by this year’s test. &nbsp;More specifically, as shown in the middle bar of Figure 1, even if stress losses were increased by fifty percent to $445 billion, Forum members would still maintain a capital ratio well in excess of the regulatory minimum. &nbsp;Indeed, not only would Forum members maintain sufficient capital in the aggregate, each individual member would maintain a capital ratio in excess of the regulatory minimum if losses were fifty percent larger than those hypothesized by this year’s test.&nbsp;Finally, the idea that this year’s scenario is somehow too easy doesn’t hold up. &nbsp;In Table 1 below, we compare the value of three key variables in the stress test – the peak unemployment rate, the decline in GDP, and the decline in the stock market – across the 2021 stress scenario and the 2008-2010 recession. &nbsp;<figure class="image image_resized" style="width:57.24%;"><img src="https://fsforum.com/a/Screen_Shot_2021_06_28_at_10_16_20_AM_fff3190dbe/Screen_Shot_2021_06_28_at_10_16_20_AM_fff3190dbe.png"><figcaption>Source: Federal Reserve Board and FRED Database</figcaption></figure>As shown in Table 1, these key variables in the 2021 stress scenario are either more severe or on par with the experience of the 2008-2010 recession.And of course, it goes without saying that there would be some level of scenario severity at which large banks would not have sufficient capital. &nbsp;That statement, however, is simply a matter of arithmetic that itself says nothing about either the proper severity of the stress tests or the capital adequacy of Forum members and other large banks. &nbsp;One can always envision a scarier, and more extreme doom-and-gloom scenario. &nbsp;The mere fact that one can hypothesize more extreme events does not mean that those events are relevant for measuring the capital adequacy of large banks.Indeed, this kind of thinking has also prompted some to argue that the only reason large banks are healthy and strong is because “the government bailed them out” during the pandemic and absent this infusion of funds, the situation would be far worse. &nbsp;This argument is fallacious for two reasons. &nbsp;First, as already shown, Forum members would be resilient to a stress scenario significantly more severe than the 2021 scenario. &nbsp;Second, as a matter of course over the past year, our government engaged in macroeconomic stabilization policy. &nbsp;In other words, the Federal Reserve and the Congress acted swiftly and forcefully to protect the American economy. &nbsp;Those actions benefitted all industries and households. &nbsp;The fact that the government took steps to address an external macroeconomic shock emanating from outside the financial sector to support all businesses and households should not be used as a rationale to penalize the shareholders of large banks. &nbsp;Rather, we should applaud these efforts and recognize the strength and resiliency of our financial system in the face of an unprecedented economic and social shock. &nbsp; &nbsp;&nbsp; &nbsp;

Article

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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

Large Bank Resilience and the Stress Tests

<h3>Introduction</h3>Over the past decade, regulators have taken steps to disincentivize the use of short-term wholesale funding (STWF) by large banks.&nbsp; This regulatory initiative has been driven by concerns that STWF is systemically risky.&nbsp; The chief concern is that if short-term creditors stop extending short-term debt, large banks would be forced to quickly liquidate illiquid assets at “fire-sale” prices that would create large losses and impose large costs on the rest of the economy.&nbsp; This concern fundamentally rests on the assumption that short-term funding is used primarily to finance long-term, illiquid assets.&nbsp; New <a href="https://www.nber.org/system/files/working_papers/w28658/w28658.pdf">research</a> from economists at the Federal Reserve Board and the University of Chicago, however, demonstrates that the role played by STWF in the banking system has changed significantly over the past decade. Specifically, they find that large banks increasingly use short-term wholesale funding to finance low-risk, liquid assets, such as bank reserves, that can be liquidated quickly without taking losses or impacting the rest of the financial system.&nbsp; These findings show that STWF presents a lower level of risk to the financial system and suggests regulators should reconsider how STWF is addressed by financial regulations, such as the GSIB surcharge. &nbsp;<h3>Short-Term Funding and Asset-Liability Management</h3>A key point made in the new research is that the amount of short-term funding, all by itself, does not generate systemic risk.&nbsp; Rather, what matters is how the short-term liability is managed on the asset side of a bank’s balance sheet.&nbsp; Specifically, imagine a situation in which a bank raises $100 in short-term funding – say through the issuance of short-term debt – and then invests that $100 in cash.&nbsp; Now suppose that once the short-term debt matures, short-term creditors are unwilling to re-extend or “roll” the same short-term credit to the bank.&nbsp; In this case, the bank simply repays the creditors with the $100 in cash that it has on hand.&nbsp; Repaying the existing creditors with cash does not result in any losses to the bank or to the creditors and does not impose any spillover costs on the economy.&nbsp; In this case, the use of short-term debt creates no financial stability risk because the short-term maturity of the debt is matched with a liquid asset – cash.&nbsp; As the authors themselves state, “global banks have become more resilient to negative wholesale funding shocks, as they can swiftly reduce their arbitrage positions in response to wholesale funding dry-ups.”&nbsp; In this context, the authors use the term “arbitrage” to refer to situations in which global banks invest funds in liquid assets, such as bank reserves, that pay a rate of interest marginally higher than the rate of interest they pay on the short-term funding.This state of affairs, in which large banks increasingly invest short-term funding in low-risk and liquid assets became increasingly important over the course of 2020 as the Federal Reserve expanded its balance sheet from roughly $4 trillion to $7 trillion.&nbsp; Figure 1 below shows the increase over 2020 in bank reserves and short-term wholesale funding for the eight Financial Services Forum members.&nbsp;<figure class="image image_resized" style="width:62.34%;"><img src="https://fsforum.com/a/image_3e165f5515/image_3e165f5515.png"><figcaption>Data available from FR Y-9C and FR Y-15 forms</figcaption></figure>As can be seen in Figure 1, while total STWF rose for Forum members, so too did bank reserves.&nbsp; What’s more, the increase in bank reserves more than offsets the increase in short-term funding.&nbsp; As a result, the potential risks associated with STWF were largely attenuated for the reasons cited by the Federal Reserve and University of Chicago researchers – each dollar of STWF was matched against a low-risk and liquid asset that could be used to repay short-term creditors at any time.&nbsp; &nbsp;<h3>Short-Term Wholesale Funding and Financial Regulation</h3>The level of STWF employed by FSF members has a direct impact on the level of their GSIB surcharge – an additional capital buffer required by the Federal Reserve that only applies to Global Systemically Important Banks, or GSIBs.&nbsp; As STWF levels rise, so too do does their GSIB score, which then results in a higher GSIB surcharge.As this new research and the data in Figure 1 show, recent changes in the way that STWF is used and managed by large banks suggests that this relationship should be reconsidered.&nbsp; Over the course of 2020, increases in STWF were largely offset by holdings of bank reserves, which pose no risk to the banking sector and can be liquidated quickly to repay short-term creditors.&nbsp; Accordingly, the observed increase in STWF over 2020 does not automatically represent an increase in systemic risk that should be impounded into the GSIB surcharge.&nbsp; More broadly, and over the long term, the way in which STWF is used and managed by large banks has clearly changed.&nbsp; As the role of STWF in the banking system changes, so too should its role in financial regulations, such as the GSIB surcharge.&nbsp; Accordingly, the Federal Reserve should consider this new research and how its findings would impact the way STWF determines GSIB surcharges.&nbsp; &nbsp;&nbsp;<h3>Conclusion</h3>Short-term wholesale funding is viewed by regulators as a source of systemic risk.&nbsp; As a result, financial regulations, such as the GSIB surcharge, have been designed to dis-incentivize its use.&nbsp; The argument that STWF is systemically risky rests on the assumption that the proceeds from STWF will be used to fund long-term, illiquid assets that would be difficult to liquidate if short-term creditors refuse to continue extending short-term funding.&nbsp; New research shows that the way in which the banking sector utilizes STWF has changed significantly over the past decade.&nbsp; Namely, STWF is increasingly used to invest in short-term, liquid assets such as bank reserves that can be easily liquidated to repay short-term creditors.&nbsp; As a result, the risks posed by the use of STWF have declined significantly. The changing risks of STWF should be considered by regulators in the context of financial regulations that dis-incentivize its use, such as the GSIB surcharge.&nbsp;&nbsp;

Changing Realities and Financial Regulation: The Changing Nature of Short-Term Wholesale Funding

<h3>Introduction</h3>As a young economics student, I once asked one of my professors, “Should markets or the government run the economy?” &nbsp;I still remember the puzzled look on my professor’s face as he considered the question. &nbsp;A moment later he answered my question with a question. &nbsp;He asked, “Do you like driving cars?” I quickly nodded my head and he then followed up with, “Well then, do you think the car’s engine should be run by its pistons or its spark plugs?” &nbsp;His point was simple, but important. &nbsp;A car’s (gasoline) engine can’t run without both its pistons or sparkplugs. &nbsp;Having a preference for one over the other simply makes no sense. &nbsp;Similarly, large banks, and all private enterprises, coexist alongside government in our economy. &nbsp;And our modern economy can’t operate productively or efficiently without contributions from both.&nbsp; In this post, we discuss the ways in which large banks and government policy work together to support a strong, stable and growing economy.<h3>Implicit Government Support for Large U.S. Banks Is No Longer Prevalent</h3>A lot has changed in our economy over the past twenty years. &nbsp;In the case of the banking sector, large banks have undergone a number of significant changes to improve their overall safety through stronger capital and liquidity as well as improvements to their corporate structure, risk management, and governance. &nbsp;In addition, regulators have new tools that they can use to address a large bank that is in trouble. &nbsp;As a result of these significant changes, market perceptions that the government implicitly supports or subsidizes large banks have waned. &nbsp;And this observation is backed by data and research. &nbsp;In 2014, the Government Accountability Office (GAO) published a <a href="https://www.gao.gov/products/gao-14-621">report</a> that examined whether market participants expected government support for large banks. &nbsp;The findings of the GAO report showed that the evidence in favor of implicit government support for large U.S. banks had significantly declined by 2014. &nbsp;Specifically, the report found that “recent regulatory reforms have reduced but not eliminated the likelihood that the federal government would prevent the failure of one of the largest bank holding companies.” &nbsp;Since 2014, the evidence in this regard has only strengthened. &nbsp;In “<a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3497897">The Decline of Too Big To Fail</a>,” economists at Stanford University and the Australian National University recently found, in 2021, even stronger evidence of a lack of expected government support for large U.S banks. &nbsp;They conclude that, “[t]he data are consistent with measurable effectiveness for the official sector’s post-Lehman GSIB [large bank] failure-resolution intentions, laws, and rules. GSIB [large bank] creditors now appear to expect to suffer much larger losses in the event that a GSIB [large bank] approaches insolvency. In this sense, we estimate a major decline of "too big to fail.”<h3>The Positive Feedback Loop Between Government Support and Large Banks</h3>The fact that large banks do not benefit from implicit government support, however, does not mean that large banks do not benefit from government policy. &nbsp;Large banks, like all businesses and households, benefit from all sorts of government policies.&nbsp; Some policies are narrowly targeted at banks, such as deposit insurance or access to the Federal Reserve’s discount window. &nbsp;Other policies reflect broader government policy that is aimed at supporting the whole economy, such as macroeconomic stabilization policy. &nbsp;Consider the recent government efforts to stabilize the economy during the pandemic. &nbsp;Many of these policies, such as stimulus checks and enhanced unemployment benefits, have been crucial to supporting the economy during the pandemic. &nbsp;And large banks, like all industries and households, have benefitted from a stabilized economy. &nbsp;Effective stabilization policy reduces the severity of macroeconomic cycles and improves outcomes for everyone. &nbsp;Also, and importantly, government policy that supports the economy also helps large banks to continue supporting the economy, which further enhances the effectiveness of government policy. &nbsp;This complementarity between government policy and the contribution of large banks results in a “positive feedback loop” that benefits the whole economy. &nbsp;As the economy improves, large banks are able to further support the economy through lending and financial intermediation, which leads to a further strengthening of the economy. &nbsp;Accordingly, government policy and the activities of large banks work in tandem to support our economy.<h3>Large Banks Have Been a Conduit for Pandemic Government Polices</h3>The onset of the pandemic witnessed an aggressive government policy response to curb its fallout. &nbsp;A number of policies were enacted that operated through large banks. &nbsp;Examples of such policies would include the government’s Paycheck Protection Program, facilities that were erected by the Federal Reserve to support the financial system such as the Primary Dealer Credit Facility &nbsp;and the Money Market Liquidity Facility, as well as limited duration, and targeted modifications to certain regulations, such as the now-expired exclusion of bank reserves and U.S. Treasuries from the supplementary leverage ratio. &nbsp;In each of these cases, the government’s stated policy objective was to support households and businesses. &nbsp;Large banks participated in these programs as a conduit to channel credit and liquidity into the economy. &nbsp;To analogize, after a hurricane, local governments often hire construction companies to rebuild homes and schools. &nbsp;This rebuilding is necessary to revitalize a battered community and bring it back to life. &nbsp;In the same way, the government’s pandemic policies have buoyed our economy at a time of great need and large banks have been a constructive and important part of that effort.<h3>Conclusion</h3>Across the entire economy all industries work in tandem with government policy to realize the maximum potential of our economy. &nbsp;Large banks are no different from other industries that benefit from all sorts of government policy. &nbsp;The important point is that this partnership between government and industry is an important part of ensuring that the whole economy operates as productively and efficiently as possible.&nbsp; Going forward, large banks will continue to work constructively with the government to realize the maximum potential of our economy. &nbsp;

Pistons or Sparkplugs? How Large Banks and Governments Work Together to Support the Economy

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<ul><li>We hold more than $4.2 trillion in loans, accounting for 40% of total lending to businesses and households.</li><li>We provide more than $679 billion, or nearly half, of all consumer loans by banks in the U.S., supporting everything from the purchase of a new car to furnishing a new home.</li><li>Lending by our institutions accounts for 34% of total commercial and industrial (C&amp;I) lending by banks, helping businesses grow and contribute to the economy.</li><li>We represent a major source of lending to small businesses in communities across the country, holding $126 billion in small business loans&nbsp;and allowing the economy to grow at both a local and national level.</li><li>We also collectively meet nearly three-quarters of the bank funding needs of other financial institutions, supporting community banks, insurance companies and mortgage finance companies, for example, which then provide important services to businesses and households.</li></ul>

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Lending

Our institutions lend to consumers, businesses and other financial institutions, promoting savings and investment that positions individuals and entities at all layers of the U.S. economy for resiliency and success. At the same time, we are supporting consumers, governments, and businesses of all sizes in growing and creating American jobs.

<ul><li>We underwrite nearly three-quarters of debt and equity transactions – such as initial public offerings – among large institutions in the U.S., providing a critical service that other U.S. institutions cannot offer on a similar scale.</li><li>With $4.2 trillion of mutual funds and annuities under management, we support the retirement and other savings needs of many Americans.</li><li>We finance a significant portion of state and local government expenditures for vital projects, like hospitals, roads, bridges, and schools, through $120 billion in municipal securities holdings. Additionally, we support a large portion of federal government expenditures through $1.1 trillion in U.S. Treasury securities holdings.</li></ul>

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Liquid Capital Markets

Our institutions help foster deep and liquid capital markets, ensuring the U.S. government and private institutions are able to effectively finance public spending and investments in the real economy. 

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Our Employees

Our institutions collectively employ more than 750,000 people, offering a variety of benefits and opportunities to help our employees achieve their personal and professional goals.

Forum members increased credit to businesses and households by 10%
to nearly $8.3 trillion in 2020.


Supporting the Economy

BankNotes Blog

Dear reader,Welcome to the fifth edition of the Forum File. This issue, we are highlighting how our members are fulfilling their commitments to create a more equitable and inclusive economy as we continue to recover from the pandemic.Thanks for reading, and don’t hesitate to share your thoughts.Kevin Fromer, President and CEO, Financial Services Forum&nbsp;<h2>Penny For Your Thoughts</h2>“We are listening to our employees and know how deeply concerned they are about the ongoing challenges facing their communities and society as a whole. They want to contribute and be part of an organization committed to driving positive change.” – Jolen Anderson, Global Head of Human Resources and Global Impact Citizenship at BNY Mellon<h3>How is BNY Mellon investing in the people and communities it operates in?</h3>It’s hard to categorize all the ways the global pandemic has changed our society, but two substantial areas it has highlighted is the need to continue to digitize the processes and programs we all rely on and the even more urgent need for us all to address widespread racial, social, economic, and health-related disparities. As we have considered our giving strategy following the pandemic, we’ve recognized the incredible opportunity of combining these two areas (people and community) to ensure all communities have access to the digital economy.In pursuit of this idea, we are supporting efforts that educate, train, and develop traditionally underrepresented communities in the business and advanced technology fields. Especially young people will need to possess critical, foundational technical skills, soft skills, and relevant work experience to maximize their potential in the future economy. At the same time, others need support reskilling and upskilling.<h3>What steps are BNY Mellon taking to support the education and training underserved communities need to truly access the future digital economy?</h3>A core part of BNY Mellon’s philanthropic efforts and overarching philosophy around employee volunteerism is a commitment to developing a workforce for the future – one that is equipped to meet the demands of a technologically-driven society.In the past year, we’ve taken critical steps to support this goal. In 2020,<a href="https://www.bnymellon.com/us/en/about-us/newsroom/company-news/bny-mellon-commits-20-million-to-fund-the-future-workforce.html"> we made a $20 million, multiyear commitment</a> to academic and job training organizations for educational and workforce development programming. Building on our existing workforce initiatives, we are investing in the educational success of underserved populations, upskilling and reskilling members of the communities we work in. Specifically, this commitment includes $10 million to City University of New York (CUNY), a long-standing grantee for BNY Mellon, to underwrite the launch of the NYC Future of Work Initiative to further expand the BNY Mellon Transfer Scholarship Program. We also committed $5 million to the Community College of Allegheny County (CCAC) to establish the BNY Mellon Early College in High School program.&nbsp;The remaining $5 million of our Future of Work commitment includes investment in additional workforce training to better equip individuals with skills, experience, qualifications and access to a tightening labor market through 2022.<h3>What other strategies is BNY Mellon pursuing to ensure positive, impactful change?</h3>Beyond our efforts to support our Future of Work initiative, we are also Committed to Putting the <a href="https://www.bnymellon.com/us/en/about-us/esg-and-responsible-investment.html">Future First</a> by powering a new era of ESG. BNY Mellon is committed to using our reach, market influence and resources to help address a variety of pressing global environmental, social and governance (ESG) issues. We aim to accelerate the evolution of ESG—on behalf of clients, investors, communities and all the stakeholders—to make a positive impact on people and the planet.With our size, scale and significance at the heart of the financial system, we touch many points along the financial value chain-giving us an unparalleled view of the continuous shifts in ESG. We're uniquely positioned to collaborate with clients to drive transparency, insight and impact.Recently, we published our <a href="https://www.bnymellon.com/content/dam/bnymellon/documents/pdf/insights/considering-climate-at-bny-mellon.pdf.coredownload.pdf">Considering Climate Report </a>which clearly and publicly outlines our approach and commitment as a global financial institution to sustainability and combatting climate change.We also hosted the <a href="https://futurefirstforum.bnymellon.com/?cid=ALL_OSM_XC003275_Week430secpromoTwitter_ALLSEG_PUB_GL_TWT_BRN__DV__">Future First Forum</a> to help foster a larger conversation about what our industry and others can do to develop meaningful ESG strategies and share ideas that help us all truly safeguard the future.<h2>&nbsp;</h2><h2>Value Add</h2>Community Impact, Skills-based volunteering, and signature pro-bono program<figure class="image image_resized" style="width:100%;"><img src="https://fsforum.com/a/media/screen-shot-2021-07-28-at-12.13.47-pm.png"></figure>Since the launch of our Community Impact Program in 2008, BNY Mellon employees volunteered nearly 1.3 million hours valued at approximately $25 million.Skills-based volunteering leverages the company’s greatest asset — our employees’ knowledge and expertise — and opens opportunities to make an impact on society. In this regard, 2020 was no exception. Despite the lockdowns and restrictions on in-person activities, employees from 16 countries continued to volunteer in 2020.Many volunteer projects pivoted to virtual volunteering, totaling more than 54,000 hours to serve a variety of important causes and organizations.This included activities such as virtual mentoring with underrepresented high school students, coaching young first-generation-to-college entrepreneurs, and providing strategic advising to non-profits through the Signature Pro Bono Program.Through pro bono volunteering, we leverage the talent of our employees to increase the nonprofit sector’s capacities in our communities. In fact, since 2017, the Signature Pro Bono Program has provided critically needed capacity-building support in areas such as finance, technology and marketing to a number of non-profit organizations. BNY Mellon employees delivered nearly 3,000 hours of corporate and legal pro-bono services, valued at over $500,000 in 2020. Additionally, 100% of participants reported that the experience allowed them to develop professionally and that they would participate again.&nbsp;<h2>Capitol Gains</h2>What we're doing in WashingtonAs seen in <a href="https://fsforum.com/news/op-ed-strength-of-large-u-s-banks-means-it-s-time-to-rely-on-rigorous-capital-distribution-process">Morning Consult</a>, we supported the full return to the government’s normal capital distribution oversight process. U.S. Global Systemically Important Banks are strong and resilient. In fact, in the second most recent stress test, the average post-stress capital ratio for our members was 9.7 percent—more than twice the minimum requirement of 4.5 percent.In addition, we have been highlighting Forum members’ commitments to addressing racial and economic inequities through:·&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Significant contributions to Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs) with $9 billion in investments in CDFIs and $500 million into MDIs.·&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Financing the creation or preservation of more than 158,000 affordable housing units in 2020.&nbsp;·&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Improving representation in the workplace by increasing diversity among Forum member professional employees, managers, and executives from 2018 to 2020.Learn more <a href="https://fsforum.com/a/Supporting_Workforce_Diversity_a4bf164240/Supporting_Workforce_Diversity_a4bf164240.pdf">here</a>.&nbsp;<h2>Our Two Cents</h2>Research from the ForumThe BankNotes Blog Spotlighted:·&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <a href="https://fsforum.com/news/large-bank-resilience-and-the-stress-tests">Results of this year’s stress test</a> released by the Federal Reserve, showing Forum members maintained more than double the regulatory minimum capital ratio. Even if stress losses were increased by 50 percent, Forum members would still maintain a capital ratio well in excess of the minimum.·&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <a href="https://fsforum.com/news/changing-realities-and-financial-regulation-the-changing-nature-of-short-term-wholesale-funding">New research</a> from economists at the Federal Reserve Board and the University of Chicago demonstrating that the role played by short-term wholesale funding in the banking system has changed significantly over the past decade.·&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <a href="https://fsforum.com/news/pistons-or-sparkplugs-how-large-banks-and-governments-work-together-to-support-the-economy">Large banks coexist alongside government</a> in our economy and our modern economy can’t operate productively or efficiently without contributions from both.&nbsp;<h2>Checking the Balance</h2>Members in the newsBank of America announced grant funding for <a href="https://newsroom.bankofamerica.com/content/newsroom/press-releases/2021/06/bank-of-america-announces-2021-art-conservation-project-grant-se.html">23 major art restoration projects</a> in 13 countries and nine U.S. cities through the 2021 Bank of America Art Conservation Project. The firm is celebrating a decade of providing grant funding to nonprofit cultural institutions throughout the world to conserve historically or culturally significant works of art that are in danger of deterioration. The bank further showed its dedication to the arts by announcing a <a href="https://newsroom.bankofamerica.com/content/newsroom/press-releases/2021/07/bank-of-america-awards--1-million-dollar-grant-to-cleveland-s-ka.html">$1 million dollar anchor grant</a> to Karamu House, the oldest African American producing theatre in the United States.BNY Mellon earned a <a href="https://www.bnymellon.com/us/en/about-us/newsroom/company-news/bny-mellon-named-to-2021-disability-equality-index.html">100% on the Disability Equality Index</a> for 2021 and was recognized by the American Association of People with Disabilities and Disability:IN as a Best Place to Work for its disability inclusion practices and policies. HEART, BNY Mellon’s Employee Resource Group for Diverse Abilities, helps support work that elevates awareness of disabilities and promotes a safe, respectful and welcoming environment.<a href="https://urldefense.com/v3/__https:/www.bloomberg.com/news/articles/2021-07-21/citigroup-traders-bankers-vie-to-do-stints-at-black-owned-banks__;!!Jkho33Y!w8NN97EHACTtWgbbvwStb2UfHWVehWR5zvsjptN3moUX4xEFRzFS2yb6Cx4ovGI$">Bloomberg reported</a> Citi’s new mentorship program which allows senior executives to spend time working at black owned banks and help the minority depository institution (MDIs) shore up operations or establish new lines of business as part of the firm’s efforts to mentor and offer long-term revenue growth opportunities to the country’s dwindling MDIs. In addition to these recent efforts, Citi has provided $50 million to half a dozen such banks as part of a broader $1 billion commitment to closing the nation’s wealth gap.Goldman Sachs announced the <a href="https://www.goldmansachs.com/media-relations/press-releases/2021/ombw-first-round-of-capital-and-philanthropic-grants.html">initial grants and investments</a> for the One Million Black Women initiative, which has committed more than $10 billion to advance racial equity and economic opportunity by investing in Black women. Investment capital and philanthropic grants will provide organizations funds to advance causes including expanding broadband access, increasing access to financial coaching, providing affordable housing, decreasing maternal mortality rates, and more.JPMorgan Chase announced new steps <a href="https://www.forbes.com/sites/brendarichardson/2021/06/24/chase-commits-400-million-toward-closing-the-housing-affordability-gap/?sh=73196881b95f">to improve housing affordability and stability</a> as well as affordable homeownership opportunities for Black and Latinx households. As part of its $30 billion commitment to racial equity, a new five-year, $400 million philanthropic commitment will focus on housing stability, affordability and wealth creation. The firm also announced new efforts to advance federal housing policies that help mitigate bias in the home appraisal process such as promoting equal access to valuation data and improved appraisal process techniques. JPMorgan Chase is also providing mentors for trainees in the Appraiser Diversity Pipeline Initiative, an initiative led by the Appraisal Institute and Fannie Mae to attract new people in the field and increase diversity in the industry.Morgan Stanley awarded <a href="https://www.morganstanley.com/press-releases/usd21-7-million-award-to-opportunity-finance-network">$21.7 million in funding</a> to Opportunity Finance Network to support human capital and professional development for the Community Development Financial Institution (CDFI) network, and to make pass-through grants to CDFIs in amounts of $100,000 - $250,000. These grants are designed to help CDFIs increase their lending capacity to the communities they serve. Mission-driven CDFI grant recipients will support economic recovery and growth, especially in Black, Latinx, Native, and rural communities.State Street recently announced strategic <a href="https://clicktime.symantec.com/3JcbZHHReBsX153wiAcXSK37Vc?u=https%3A%2F%2Finvestors.statestreet.com%2Finvestor-news-events%2Fpress-releases%2Fnews-details%2F2021%2FState-Street-Announces-Strategic-Engagements-with-Industry-Groups-to-Increase-Representation-of-Black-and-Latinx-Talent-in-the-Asset-Management-Industry%2Fdefault.aspx">engagements with leading industry and education-focused organizations</a>that support the advancement of Black and Latinx professionals in financial services. Aligned with the firm’s 10 Actions to address racism and inequality in the workplace and communities and as part of its commitment to combating racial inequities within the global asset management industry, State Street will work with four organizations to provide career exploration; inclusion, diversity and equity best practices; employment; and professional development opportunities.Wells Fargo provided <a href="https://newsroom.wf.com/English/news-releases/news-release-details/2021/Opportunity-Finance-Network-Receives-Largest-Grant-in-35-Year-History-from-Wells-Fargo/default.aspx">a $25 million grant</a> to Opportunity Finance Network’s (OFN) <a href="https://ofn.org/finance-justice-fund">Finance Justice Fund</a> to assist in tackling systemic barriers to capital in communities around the country. The Finance Justice Fund aims to address the racial wealth gap and persistent poverty by delivering financing through CDFIs to communities with less access to traditional financial services. The firm also awarded $1 million in grants to four organizations to provide <a href="https://newsroom.wf.com/English/news-releases/news-release-details/2021/Wells-Fargo-Awards-1-Million-to-Assist-Asian-American-and-Pacific-Islander-Communities/default.aspx">support for the Asian American and Pacific Islander community</a> and small businesses. The funding is in response to the COVID-19 pandemic and the recent increase in anti-Asian hate, discrimination and violence.&nbsp;

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The Forum File, Edition 5

Dear reader,Welcome to the fourth edition of The Forum File. With this newsletter, we’re focusing on how our members have worked to create a more equitable and inclusive economy in local communities.We enjoy hearing your feedback. Thanks for reading. &nbsp;Kevin Fromer, President and CEO, Financial Services&nbsp;Forum&nbsp;<h3>&nbsp;</h3><h2>Penny For Your Thoughts</h2>“We realize this issue calls for more show than tell.” -&nbsp; Head of Community Investing and Development at Citi and President of the Citi Foundation, Brandee McHale<h3>How is Citi bringing its expertise to bear in addressing the racial wealth gap?</h3>Last September, Citi Global Perspectives &amp; Solutions (GPS)&nbsp;<a href="https://www.citivelocity.com/citigps/closing-the-racial-inequality-gaps/">released a report</a> revealing that if key racial gaps for Black Americans in wages, housing, education and investment are closed today, up to $5 trillion could be been added to the U.S. GDP&nbsp;over the next five years. We couldn’t ignore the role of that the financial services industry has played in contributing to the economic disparities that fuel racial inequity and the opportunity we had to be a part of the solution. Rather than just commit grant dollars and make solidary statements, at Citi, we wanted to meaningfully lead by our strengths. We did this by launching&nbsp;<a href="https://www.citigroup.com/citi/racial-equity/">Action for Racial Equity</a>, a comprehensive approach to providing greater access to banking and credit in communities of color, increasing investment in Black-owned businesses, expanding homeownership among Black Americans, and advancing anti-racist practices in the financial services industry.<h3>How have these initiatives started to deliver already?</h3>In the first seven months, we’ve&nbsp;<a href="https://www.citigroup.com/citi/news/2021/210426b.htm">demonstrated early results</a> in addressing the racial wealth gap. Citi has allocated more than half of its $100 million&nbsp;<a href="http://click.communities.citigroup.com/?qs=37cafe97c1c7d88b5c073959e55b6a3b2c98d7319b2dee49aea18de5e201807f0f23647f12b680ca021feb205618e094a1b4bc3b5701403c">commitment to Minority Depository Institutions (MDIs)</a> that are expanding banking and credit access in communities of color (detailed below). We are collaborating with the cities of Los Angeles and San Jose to provide college savings accounts for public school students, and also working with the National Urban League to offer the Citi® Access Account Package that includes no fee savings and checking products through its network. In addition to Citi’s business initiatives, the Citi Foundation has granted more than $15 million of its three-year, $100 million target to invest in community change agents addressing racial equity, including new efforts to develop entrepreneurship and skillsets among young people of color and support small businesses owned by people of color.<h3>What have you learned through the early days of this ambitious effort?</h3>We realize this issue calls for more show than tell. We announced these recent updates not to showcase how close we are to being done, but rather to provide transparency into what has been accomplished and the tremendous amount of work still to be done. We view these periodic updates as chance to have a dialogue with stakeholders and inform planning for tomorrow. While this has been one of the most challenging periods we have faced both personally and professionally, the Citi team has been inspired by the innovation and ingenuity we are seeing from partner organizations and the role they play as change agents.&nbsp;Beyond delivering on these bold commitments, we have also seen colleagues from across the firm step up and find their own approaches to embedding racial equity within our business. From a new training program facilitated by HR to support junior employees of minority broker dealers, to a new investment banking apprenticeship launching this summer for city college students in Chicago, it is clear that, at Citi, we are not just changing processes, we are changing mindsets.The scale and pace of the challenges we face, now and in the future, will demand bold and ambitious shared agendas for positive change. We are ready to play our part.&nbsp;<h2>Value Add</h2>Member Program spotlight.<figure class="image image_resized" style="width:50%;"><img src="https://fsforum.com/a/Screen_Shot_2021_05_18_at_10_25_15_AM_fe83629157/Screen_Shot_2021_05_18_at_10_25_15_AM_fe83629157.png"></figure><h3>Expanding banking and access to credit in Black communities</h3>Among Citi’s Action for Racial Equity initiatives is a $100 million commitment to Minority Depository Institutions (MDIs) to expand access to banking and credit in communities of color. In just seven months, Citi has already allocated more than $50 million to that end and the bank has closed nearly $15 million out of $50 million in affordable housing loan participation opportunities for MDIs to generate revenue and build their capacity to invest in larger transactions.&nbsp;Citi is investing more than $200 million—out of a $550 million three-year commitment to affordable housing—in five equity funds that will be co-managed by Black investment managers to preserve multi-family affordable rental housing in cities all across the country.While equity investments are a critical component of the support for MDIs, Citi emphasizes engagement and mentorship as a difference maker. Through collaboration with&nbsp;<a href="https://www2.deloitte.com/global/en.html">Deloitte</a> and the <a href="https://www.nationalbankers.org/">National Bankers Association</a>, Citi has also established a technical assistance program to support MDIs’ talent development, enhance technology, and expand business networks.For more information on Citi’s work with MDIs visit:&nbsp;<a href="https://www.citigroup.com/citi/racial-equity/data/minority-depository-institutions-brochure.pdf?ieNocache=800">https://www.citigroup.com/citi/racial-equity/data/minority-depository-institutions-brochure.pdf?ieNocache=800</a>&nbsp;<h2>Capital Gains</h2>What we’re doing in Washington.We have <a href="https://fsforum.com/a/coalitionimprovingcorporategovernancethroughdiversityact_hfsc_775406fd6f/coalitionimprovingcorporategovernancethroughdiversityact_hfsc_775406fd6f.pdf">advocated</a> for the passage of the “Improving Corporate Governance Through Diversity Act of 2021.” The bipartisan bill would establish a model to organically boost efforts to increase diversity on corporate boards of directors through disclosure. The legislation would also establish an advisory group that would carry out a study and provide recommendations on private sector strategies to increase gender, racial, and ethnic diversity among boards of directors.We also highlighted Forum members’ dedication to supporting local communities in 2020 through:<ul><li>Investing $110 billion in low- and moderate-income communities;</li><li>Creating or preserving 158,000 affordable housing units; and</li><li>Holding $120 billion in municipal securities, which provides financing for hospitals, schools, roads, bridges and more</li></ul>Learn more about how the nation's largest banks supported the economy in 2020 in our <a href="https://fsforum.com/our-impact/covid-19-response">new video</a>.&nbsp;<h2>Our Two Cents</h2>Research from the ForumThe BankNotes Blog Spotlighted:<ul><li>Findings from the Supervision and Regulation Report and the Financial Stability Report&nbsp;published by the Federal Reserve, showing that Forum members&nbsp;<a href="https://fsforum.com/news/safe-and-sound-and-supporting-the-economy-the-federal-reserve-s-view-on-large-banks">remained safe and sound</a> as they built capital and liquidity over the course of 2020.</li><li>Forum members' <a href="https://fsforum.com/news/large-bank-strength-and-resilience-a-reaction-to-the-financial-stability-board-evaluation-of-tbtf">resiliency and resolvability</a> has significantly improved thanks to a combination of reforms by banks and regulators, the Financial Stability Board found. The experience in the U.S. has generally been superior to that of other jurisdictions.</li><li>Regulators and the public&nbsp;<a href="https://fsforum.com/news/bank-risk-models-and-reality-bank-risk-models-do-not-game-the-system">should give greater consideration</a> to bank risk assessments in the regulatory framework as bank risk models often show higher levels of risk than that of regulatory risk models.</li></ul>&nbsp;<h2>Checking the Balance</h2>Members in the news.Bank of America and the Neighborhood Assistance Corporation of America (NACA) announced the <a href="https://newsroom.bankofamerica.com/content/newsroom/press-releases/2021/05/bank-of-america-and-naca-expand-mortgage-program-to--15-billion-.html">expansion of their national affordable homeownership mortgage program</a>, with a goal of providing $15 billion in mortgages to low-to-moderate income (LMI) homebuyers through May 2027. Additionally, <a href="https://www.cnn.com/videos/business/2021/05/18/bank-of-america-minimum-wage-ceo-brian-moynihan.cnnbusiness">CNN reported</a> that the firm will raise its U.S. minimum hourly wage to $25 by 2025 and require its U.S. vendors to pay their employees dedicated to the bank, at or above $15 per hour.Five BNY Mellon employees were included on the <a href="https://empower.involverolemodels.org/">2021 EMpower Role Model List</a> for breaking down barriers and inspiring the next generation of diverse talent. The firm also held the <a href="https://futurefirstforum.bnymellon.com/?cid=ALL_OSM_XC003275_EventHighlightVideo_ALLSEG_PUB_GL_TWT_BRN___TL_">Future First Forum</a>, which brings together industry experts to discuss ways to better environmental, social, and governance (ESG) practices and create meaningful change.Citi&nbsp;has been named&nbsp;#10 on 3BL Media’s&nbsp;<a href="https://100best.3blmedia.com/">annual list of 100 Best Corporate Citizens</a>, evaluated based on leadership on environmental, social and governance (ESG) issues and the transparency with which they report on them. &nbsp;Forbes also recently included Citi in its list as one of “<a href="https://www.forbes.com/best-employers-diversity/#7e9eafd59b9e">America’s Best Employers for Diversity 2021</a>,” while parenting-focused media outlets Scary Mommy and Fatherly have named Citi one of the “<a href="https://www.fatherly.com/best-places-to-work-2021/">Best Places to Work for Moms, Dad, and Remote Work</a>” through their new Parents@Work initiative.Despite COVID-19’s impact on markets, Goldman Sachs announced it is on pace to meet its goal of $750 billion in sustainable financing, investing, and advisory activity well before its 10-year target. In 2020, the firm was able to reach more than a fifth of its goal on its two priorities of climate transition and inclusive growth by achieving $156 billion in sustainable finance activity.<a href="https://financialservicesforum.cmail19.com/t/r-l-tlijdykt-ohrultuttr-v/https://www.americanbanker.com/news/jpmorgan-chase-expands-effort-to-hire-people-with-criminal-pasts#:~:text=The%20largest%20U.S.%20bank%20by,recruitment%20effort%20to%20Columbus%2C%20Ohio.">American Banker</a> highlighted JP Morgan Chase’s announcement that Columbus, Ohio, will be the second city in its <a href="https://www.jpmorganchase.com/content/dam/jpmc/jpmorgan-chase-and-co/documents/jpmc-policycenter-overview-v1-ada.pdf">“second chance” recruitment effort</a>, which is designed to give people with arrest or conviction histories a second chance by supporting their reentry into the workforce, communities, and local economies. In addition, the bank pledged an additional $12.5 million to help community organizations connect people with criminal backgrounds with entrepreneurship training.Morgan Stanley announced the inaugural class of its HBCU Scholars program, which will provide 60 full scholarships for HBCU students at <a href="https://www.morganstanley.com/press-releases/morgan-stanley-and-howard-university-announce-inaugural-class-of">Howard University</a>, <a href="https://www.morganstanley.com/press-releases/-morgan-stanley-and-morehouse-college-announce-inaugural-class-o">Morehouse College</a>, and <a href="https://www.morganstanley.com/press-releases/morgan-stanley-and-spelman-college-announce-inaugural-class-of-h">Spelman College</a>. The scholarship program is designed to support the recipients’ career skills and readiness to help set them on a life-long path to success.State Street awarded <a href="https://newsroom.statestreet.com/press-releases/press-release-details/2021/State-Street-Foundation-Awards-1.3-Million-in-Grants-to-Support-Early-College-Programs-in-Boston-Area-Schools-/default.aspx">$1.3 million to four Boston-area high schools</a> through the Massachusetts Early College initiative. The initiative allows students to save both time and money by taking college courses and earning credits while in high school.Wells Fargo launched the Banking Inclusion Initiative, a 10-year commitment to help unbanked individuals gain access to affordable transactional accounts.&nbsp; The initiative will focus on helping remove barriers to financial inclusion for Black and African American, Hispanic, and Native American/Alaska Native families. It also will assist individuals who may have a bank account yet continue to use high cost, non-bank services and have similar needs. As part of the initiative to bring more people into the banking system from underserved communities, Wells Fargo is launching a National Unbanked Advisory Task Force comprised of leading organizations including LULAC&nbsp;(League of United Latin American Citizens),&nbsp;NAACP&nbsp;(National Association for the Advancement of Colored People),&nbsp;National Bankers Association,&nbsp;NCAI&nbsp;(National Congress of American Indians),&nbsp;UnidosUS,&nbsp;National Urban League, and Mississippi-based&nbsp;Hope Enterprise Corporation.

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The Forum File, Edition 4

Dear reader,This issue, we’re highlighting how our members have been advancing racial equity, focusing on areas with longstanding disparities through substantial commitments and initiatives, and&nbsp;providing affordable homeownership options by financing&nbsp;sustainable housing units and grant programs.&nbsp;Thanks for reading, and don’t hesitate to share your feedback.&nbsp; Kevin Fromer, President and CEO, Financial Services&nbsp;Forum&nbsp;<h2>Penny For Your Thoughts</h2>"We can’t let the urgency around racial equality and economic opportunity quiet down." -&nbsp;Bank of America's Racial Equality and Economic Opportunity Initiatives Executive, Ebony Thomas.<h3>How is Bank of America working to advance racial equality and economic opportunity?</h3>None of us could have anticipated the devastating health and social impacts of 2020. Racial injustice and the disproportionate impact that these health and humanitarian crises are having on communities of color created an urgency to do more, now. At Bank of America, we feel that urgency and have taken action.Building on our longstanding focus of advancing racial equality and economic opportunity, in June 2020, we announced a <a href="https://newsroom.bankofamerica.com/press-releases/bank-america-announces-four-year-1-billion-commitment-supporting-economic">$1 billion, 4-year initiative</a> to create opportunity for people and communities of color—specifically focused on areas where systemic, long-term gaps have existed, including workforce development, healthcare, housing and small-business assistance. Since then, we’ve made significant progress deploying those funds and making sure we maintain a sense of urgency around these challenges. In March 2021, we increased our commitment to <a href="https://newsroom.bankofamerica.com/content/newsroom/press-releases/2021/03/bank-of-america-increases-commitment-to-advance-racial-equality-.html">$1.25 billion over five years</a>. This effort further accelerates work already underway to address racial equality and economic opportunity through direct actions, investments and work to catalyze similar efforts across the private sector.<h3>How are the funds from Bank of America’s $1.25 billion commitment being deployed?</h3>Our commitment is a mix of philanthropic and business opportunities, with the majority of funds being delivered at the local level. Already, we’ve allocated more than $350 million— or one-third of our initial $1 billion commitment—across 91 U.S. markets and globally.This includes <a href="https://newsroom.bankofamerica.com/content/newsroom/press-releases/2020/11/bank-of-america-gives-21-higher-education-institutions--1-millio.html">investing in jobs and skills training</a> at 21 historically Black colleges and universities (HBCUs), Hispanic-serving institutions (HSIs) and community colleges; delivering more than <a href="https://newsroom.bankofamerica.com/content/newsroom/press-releases/2021/03/bank-of-america-reaches-milestone--company-has-distributed-25-mi.html">25 million masks</a> and other personal protective equipment (PPE) to community partners across the &nbsp;U.S.; investing in <a href="https://newsroom.bankofamerica.com/content/newsroom/press-releases/2021/01/bank-of-america-announces-investments-in-40-private-funds-focuse.html">12 Minority Depository Institutions</a> (MDIs) to help them grow and serve their communities; increasing our overall commitment to Community Development Financial Institutions (CDFIs) to $1.8 billion—making Bank of America the largest private sector CDFI funder; and committing to invest <a href="https://newsroom.bankofamerica.com/content/newsroom/press-releases/2021/01/bank-of-america-announces-investments-in-40-private-funds-focuse.html">$200 million</a> in private equity funds focused on minority entrepreneurs and predominantly led by diverse fund managers across the U.S. &nbsp;We have also committed an immediate $1 million in grants, and have taken related actions in support of increased advocacy, dialogue and engagement with the Asian American community.<h3>How else do you plan to deploy your $1.25 billon commitment?</h3>Our $1.25 billion commitment stretches over five years, so we still have a lot of work to do. We’ll continue to address the four pillars of jobs, healthcare, housing and small businesses that we set out to tackle with this commitment. A mantra we have here, which our CEO Brian Moynihan continues to reiterate, is that we can’t let the urgency around racial equality and economic opportunity quiet down. We will continue to focus day in and day out on building that into our business and the work we do in our communities.&nbsp;<h2>Value Add</h2>Member program spotlight.<figure class="image"><img src="https://img.createsend1.com/resize/ei/r/21/192/849/csimport/ScreenShot2021-04-12at11.39.40AM.png?w=900" alt=""></figure><h3>Community Homeownership Commitment &amp; Affordable Housing</h3>In February this year, Bank of America tripled its <a href="https://newsroom.bankofamerica.com/content/newsroom/press-releases/2021/02/bank-of-america-triples-affordable-homeownership-commitment-to--.html">affordable homeownership initiative</a> from $5 billion to $15 billion through 2025 to help 60,000 individuals and families purchase homes. This includes the BofA Down Payment Grant, available in more than 260 cities and counties and provides as much as $10,000 to assist with down payments, as well as America’s Home Grant, which is available in nearly 800 cities and counties and provides as much as $7,500 for closing costs such as title insurance and recording fees.&nbsp;Recognizing the disparity in homeownership percentages among low- and moderate-income (LMI) individuals in communities of color, this Community Homeownership Commitment is designed to create more equitable access to affordable and sustainable homeownership within these communities. Since launching in 2019 as a $5 billion commitment, Bank of America’s affordable homeownership initiative has already helped more than 21,000 individuals and families purchase a home, and has provided $185 million in grants, with no repayment necessary.Last year, through Bank of America Community Development Banking (CDB), the company also financed the development of more than <a href="https://newsroom.bankofamerica.com/content/newsroom/press-releases/2021/02/bank-of-america-community-development-banking-provided-record--5.html">13,000 affordable housing units</a>, including 1,650 units developed by minority and women-owned business enterprises. In 2020, CDB provided a record $5.9 billion in loans, tax credit equity investments, and other real estate development solutions to help build sustainable communities through affordable housing and economic development. These solutions help create affordable housing for individuals, families, seniors, students, veterans, the formerly homeless, and those with special needs. &nbsp;Access to affordable housing is essential to increasing economic mobility and reducing inter-generational and childhood poverty, and is key pillar in Bank of America’s $1.25 billion, 5-year initiative. Homeownership has historically helped families create a legacy and build long-term wealth. Bank of America commitments in this area are among many demonstrations of the company’s work to address disparities in the communities it serves.&nbsp;<h2>Capitol Gains</h2>What we're doing in Washington.We supported the extension of the&nbsp;2021 Paycheck Protection Program to give&nbsp;small business owners and banks time to address issues on outstanding applications with the government and to fully implement changes to the program made by the administration.&nbsp;Lawmakers authorized an extension until May 31, giving the Small Business Administration until June 30 to process loans.&nbsp;Members of the Financial Services Forum have been strong partners of the PPP, facilitating&nbsp;$69 billion&nbsp;in loans to&nbsp;848,696&nbsp;small businesses in 2020. More than&nbsp;one-third&nbsp;of those loans were made to businesses in communities in which the majority of the people are minorities, and&nbsp;91 percent&nbsp;of the PPP loans by Forum members last year were made to businesses with 20 or fewer employees. In addition, Forum members have extended significant support to Community Development Financial Institutions to support their PPP lending in traditionally underserved communities.<a href="https://fsforum.com/a/factsheet_delivering_pppupdated3_8_ff4cd1ed96/factsheet_delivering_pppupdated3_8_ff4cd1ed96.pdf">Learn more</a>.&nbsp;&nbsp;<h2>Our Two Cents</h2>Research from the Forum.<h3>The BankNotes Blog Spotlighted:</h3><ul><li>Large dealers, such as Financial Services Forum Members, actively made markets and <a href="https://www.fsforum.com/types/press/blog/dealers-have-actively-made-markets-during-the-pandemic-to-support-their-clients/">provided</a> liquidity to their clients during the pandemic.</li><li>Financial Services Forum members <a href="https://www.fsforum.com/types/press/blog/economic-uncertainty-regulatory-uncertainty-and-bank-capital-distributions/">maintained</a> significantly more capital than was needed to both sustain the severe economic shock contemplated in the December 2020 stress tests and continue supporting the economy.</li><li>Large banks in the U.S. are <a href="https://www.fsforum.com/types/press/blog/the-gsib-surcharge-and-international-competition-the-unlevel-playing-field/">subject</a> to a stricter&nbsp;form of the GSIB surcharge relative to their foreign competitors.&nbsp;As a result, large U.S. banks face an unlevel playing field when competing against large foreign banks both at home and abroad.</li></ul>&nbsp;<h2>Checking the Balance&nbsp;</h2>Members in the News.Building on Bank of America’s longstanding support for the Paris Climate Agreement and commitment to advancing the United Nations’ Sustainable Development Goals, the company has announced a goal of deploying and mobilizing $1 trillion by 2030 in its Environmental Business Initiative to accelerate the transition to a low-carbon, sustainable economy. This commitment will anchor a <a href="https://newsroom.bankofamerica.com/content/newsroom/press-releases/2021/04/bank-of-america-increases-environmental-business-initiative-targ.html">broader $1.5 trillion sustainable finance goal</a> by both environmental transition and social inclusive development purposes, spanning business activities across the globe.BNY Mellon <a href="https://www.bnymellon.com/us/en/about-us/newsroom/company-news/bny-mellon-collaborates-with-yale-initiative-on-sustainable-finance-to-further-esg-research.html">announced</a> a collaboration with the Yale Initiative on Sustainable Finance to address the challenges of integrating sustainability concerns into financial markets and investment decisions. BNY Mellon will support YISF’s ongoing research agenda that includes exploring the relationship between ESG metrics and financial performance, helping to solve issues with ESG data through investor grade ESG metrics. The bank also made a donation to support YISF’s research agenda.Citi was <a href="https://www.businesswire.com/news/home/20210323005258/en/Citi-Recognized-as-an-Eleven-Time-Industry-Leader-in-Affordable-Housing?linkId=114144511">recognized</a> as the largest affordable housing lender in the country by Affordable Housing Finance Magazine in its annual survey. This is the eleventh consecutive year Citi has earned this distinction. Citi Community Capital, the bank unit through which Citi works to finance all types of affordable housing and community development projects, reported over $7 billion of lending to finance affordable rental housing projects in 2020.Goldman Sachs <a href="https://www.goldmansachs.com/media-relations/press-releases/2021/one-million-black-women.html">announced</a> an investment initiative, One Million Black Women, of more than $10 billion to advance racial equity and economic opportunity by investing in Black women. The bank will commit $10 billion in direct investment capital and $100 million in philanthropic capital over the next decade to address the dual disproportionate gender and racial biases that Black women have faced for generations, which have only been exacerbated by the pandemic.JPMorgan Chase <a href="https://www.jpmorganchase.com/news-stories/jpmc-commits-350m-to-grow-black-latinx-women-owned-sb">announced</a> a $350 million, five-year global commitment to grow Black, Latinx, women-owned and other underserved small businesses, help address the racial wealth divide and create a more inclusive recovery from the COVID-19 pandemic. This commitment, which combines low-cost loans, equity investments and philanthropy, will help reduce barriers to capital for underserved small businesses to support their immediate needs and long-term growth.Morgan Stanley Wealth Management has <a href="https://www.morganstanley.com/press-releases/morgan-stanley-wealth-management-names-18-women-and-advocates-to">recognized</a> the achievements of 18 outstanding professionals as part of its partnership with MAKERS – a project dedicated to identifying and celebrating women of accomplishment across multiple fields along with the men who sponsor and champion women’s achievement.State Street <a href="https://newsroom.statestreet.com/press-releases/press-release-details/2021/State-Street-Commits-to-Black-Equity-at-Work-Certification-Program-and-Work-Towards-Organizational-Equality/default.aspx">announced</a> its support and participation in the Management Leadership for Tomorrow’s (MLT) Black Equity at Work Certification, a results-driven certification program addressing the persistent inequities faced by Black professionals across corporate America. The Certification, which aligns with State Street’s 10 Actions to address racism and inequality in the workplace and its communities, provides a roadmap to enable employers to take a systematic, results-orientated approach to Black equity in the workforce.Wells Fargo <a href="https://newsroom.wf.com/English/news-releases/news-release-details/2021/Wells-Fargo-Sets-Goal-to-Achieve-Net-Zero-Greenhouse-Gas-Emissions-by-2050/default.aspx">announced</a> a major step by setting a goal of net zero greenhouse gas emissions — including its financed emissions — by 2050. The bank will measure and disclose financed emissions for select carbon-intensive portfolios; set interim emission reduction targets; deploy more capital to finance climate innovation; and continue to work with its clients on their own emissions reduction efforts. The company will also launch an Institute for Sustainable Finance to manage the deployment of $500 billion of financing to sustainable businesses and projects by 2030.

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The Forum File, Edition 3

The Forum File

CONTACT: Barbara Hagenbaugh(202) 457-8783bhagenbaugh@fsforum.comNiko Davis(202) 713-7322ndavis@fsforum.com&nbsp;“The strength and resiliency of the nation’s largest banks have been reconfirmed,” Forum CEO says. Washington, D.C. – Financial Services Forum President and CEO Kevin Fromer issued the following statement today in response to the Federal Reserve Board’s 2021 Dodd-Frank Act Stress Test <a href="https://www.federalreserve.gov/publications/files/2021-dfast-results-20210624.pdf">results</a>:&nbsp;“The strength and resiliency of the nation’s largest banks have been reconfirmed through this hypothetical stress test as well as their performance throughout the dramatic course of the global economy over the past 15 months. We are proud of the supportive role our member banks have been able to play for American businesses and households.“The eight Global Systemically Important Banks (GSIBs) entered the pandemic in a position of strength. Since 2010, their Tier 1 capital, which acts as a buffer against losses, has risen 51 percent to $985 billion. This strength positioned them to act quickly to support customers, small businesses, employees and communities across the country during the pandemic.“The Federal Reserve’s stress tests—the third such test conducted in a year—show that GSIBs are well capitalized and fully capable of supporting the economy, even in the face of significant losses. Given the strength of the nation’s largest banks and the rapid economic recovery, it is time to rely on the rigorous regulatory process that calculates the potential return of excess capital safely to investors across the country. This reasonable return of excess capital will support the economy as we build a strong and broad recovery.”Background:In <a href="https://fsforum.com/our-impact/covid-19-response">2020</a>, the nation’s largest banks increased their provision of credit 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 small businesses through the Paycheck Protection Program. They also committed significant resources to communities across the country, creating or preserving more than 158,000 affordable housing 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 <a href="https://fsforum.com/our-impact/supporting-underserved-communities">supporters</a> 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.The banks supported the economy while also remaining extremely healthy and strong. Still, out of abundance of caution at the onset of the pandemic, GSIBs <a href="https://fsforum.com/news/financial-services-forum-statement-on-share-buybacks">suspended</a> their share buybacks—which account for the majority of their capital distributions—and &nbsp;reserved for potential losses. The Federal Reserve also put on hold its regular process for permitting capital distributions of excess capital given the economic uncertainty. &nbsp;Today’s release marks the full return to the government’s normal, rigorous capital distribution oversight process, a process that exists for no other industry in the United States.Share distributions complement—not replace—investments businesses in all industries make in their communities, workers, capital, and businesses. Dividends and buybacks are good for the economy and benefit all shareholders. More than half of all U.S. households own stocks, either directly or indirectly, putting money into the pockets of people who can spend it in support of industries across the country.Click <a href="https://fsforum.com/a/Buybacks_and_Dividends_Supporting_the_Economy_d7452feac2/Buybacks_and_Dividends_Supporting_the_Economy_d7452feac2.pdf">here</a> for more information on share distributions.Read <a href="https://fsforum.com/news/large-bank-resilience-and-the-stress-tests">more</a> about the Forum member’s performance in the 2021 stress tests in our blog.###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 millions of consumers, businesses, investors, and communities throughout the country. The Forum promotes policies that support savings and investment, financial inclusion, deep and liquid capital markets, a competitive global marketplace, and a sound financial system. Visit our website: <a href="https://fsforum.com">fsforum.com</a> 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> &nbsp;

Federal Reserve Stress Tests Reaffirm Strength and Safety of Largest U.S. Banks 

CONTACT:&nbsp;Barbara Hagenbaugh(202) 457-8783bhagenbaugh@fsforum.com&nbsp;Legislation is unnecessary and could be harmful to bank customers and the public interestWashington, D.C. – The Financial Services Forum issued the following statement today in response to the markup of H.R. 3948, the “Greater Supervision in Banking Act of 2021,” by the House Financial Services Committee:Global Systemically Important Banks (GSIBs) are among the most transparent public companies and already provide an enormous amount of information to state and federal regulators and to the public. The GSIB Act is largely duplicative of information that is already reported or voluntarily disclosed. Some information required by the legislation is currently treated by regulators and banks as sensitive or confidential to protect customers and broader financial stability. This legislation is unnecessary and could be harmful to bank customers and the public interest.###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 millions of consumers, businesses, investors, and communities throughout the country. The Forum promotes policies that support savings and investment, financial inclusion, deep and liquid capital markets, a competitive global marketplace, and a sound financial system. &nbsp;Visit our website: <a href="https://fsforum.com">fsforum.com</a> 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> &nbsp;

Forum Statement on Markup of “GSIB Act”

Financial Markets and Institutions Provided Vital Support to the Global Economy During the Pandemic

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Supporting Communities During the Pandemic

The COVID-19 pandemic is an unprecedented challenge for the world and the global economy and the largest U.S. banks are committed to supporting customers, clients, and the nation.

PPP loans from JPMorgan have supported 3 million workers at small businesses, including those working at Community Wellness Ventures, a mental health services company that serves children and families in Washington, D.C. The PPP loan has helped Dr. Charlayne Hayling-Williams and her husband, Dr. Rod Williams, continue to pay their counselors, social workers, psychologists and housing specialists so that they can continue to serve their community.The majority of Citibank’s PPP loans went to small businesses in the service sector. A PPP loan from Citi helped the Maryland Youth Ballet in Silver Spring retain teaching staff and find a way to teach students safely and retain employees. The students range in age from 2 to 19 years old. “If we hadn’t been able to receive this PPP loan, we wouldn’t be able to keep dancing,” Principal Deidre Byrne says. <a href="https://www.youtube.com/watch?v=dMzepw_oAtQ&amp;feature=youtu.be">Learn more</a>.State Street is a lead sponsor of <a href="https://www.smallbstrong.com/">Small Business Strong</a>, a non-profit organization helping women and minority owned small businesses navigate the devastating impact of the COVID-19 pandemic. Small Business Strong provides expedited, pro-bono resources to small businesses ranging from access to capital to consulting, business restructuring, business growth, digital marketing and customer engagement plans.Another way Forum banks have worked to assist small businesses is by supporting financial institutions with particularly strong connections to certain local communities. Forum banks have increased their support for Community Development Financial Institutions (CDFIs) during the pandemic. CDFIs are private financial institutions that are dedicated to providing responsible, affordable lending to help low-income and typically underserved communities. From 2015 to 2020, <a href="https://www.fsforum.com/wp-content/uploads/2021/01/cdfifactsheetfinal2021.jpg">Forum banks have invested nearly $9 billion in CDFIs.</a> Through such assistance, Forum member banks are working to ensure that small businesses in these communities get the help they need.Goldman Sachs last year committed $1 billion to support lending through CDFIs and other mission-driven lenders. More than 15,000 small businesses with 87,000 employees were supported just partway through the commitments. Nearly half of the initial funds went to businesses in minority communities; one-third went to those in low-income communities. <a href="https://www.forbes.com/sites/maneetahuja/2020/12/15/goldman-sachs-ceo-david-solomon-announces-additional-250-million-investment-in-small-businesses-bringing-total-2020-commitment-to-1-billion/?sh=3739ddc91000">Read more</a>.

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Supporting Small Businesses

Members of the Financial Services Forum have supported small businesses across the country throughout the pandemic, helping provide important resources during a challenging time for many business owners and their employees.

In 2020, Forum members facilitated $69 billion in loans to nearly 850,000 small businesses through the government Paycheck Protection Program. 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.

At the beginning of 2020, Morgan Stanley launched the <a href="https://www.morganstanley.com/articles/alliance-for-childrens-mental-health-covid-19">Morgan Stanley Alliance for Children’s Mental Health</a> to help address children’s mental health, specifically the far-reaching challenges of stress, anxiety and depression. After the COVID-19 pandemic began, Morgan Stanley made an additional grant to the Child Mind Institute to provide digital mental health resources for children, adolescents and young adults, with a focus on vulnerable communities that traditionally lack access to these resources.Among other areas of focus, the Alliance is promoting public awareness of how the COVID-19 pandemic affects children’s mental health—both now and in the long term.In addition to providing relief to millions of customers, Wells Fargo has redirected millions of dollars from its philanthropic budget to COVID‑19 community relief efforts for the most impacted Americans. The company has worked to streamline grant making and offer highly flexible funding to nearly 1,000 nonprofits reaching more than 800 communities across the country.The program is making a difference in helping those who need it most access small business resources, stay in their homes and obtain financial health resources. In Alabama, a $100,000 grant to the Birmingham Strong Fund is providing emergency loans to small businesses to help stabilize employment, stimulate economic vitality, and offset losses related to COVID‑19. A $100,000 grant to United Way of Greater Los Angeles has helped the group create the Pandemic Relief Fund to support vulnerable populations who are at the greatest risk of health and economic impacts in this crisis. A $160,000 grant to the Institute of Community Alliances is providing rental assistance to shelter residents across the state of Iowa.Bank of America in 2020 announced a $1 billion, four-year commitment of additional support to help local communities address economic and racial inequality accelerated by the global pandemic. The programs are focused on assisting people and communities of color that have experienced a greater impact from the health crisis in areas that include:<ul><li>Virus testing, telemedicine, flu vaccination clinics, and other health services, with a special focus on communities of color.</li><li>Partnerships with historically black colleges and universities and Hispanic-serving institutions in the United States for hiring, research programs, and other areas of mutual opportunity.</li><li>Support to minority-owned small businesses, including clients and vendors.</li><li>Career reskilling/upskilling through partnerships with high schools and community colleges.</li><li>Operating support and investment for affordable housing/neighborhood revitalization, leveraging the company’s nearly $5 billion in Community Development Banking.</li><li>Further recruitment and retention of teammates in low- to moderate-income and disadvantaged communities to build on work the company has already done to serve clients locally.</li></ul>

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Supporting Communities

Forum members have collectively committed billions of dollars to communities in need. This aid is helping organizations and governments increase medical response capacity, address food insecurity, increase access to education in the face of school closures, protect impacted small businesses and provide support to the vulnerable populations.

Financial support is being dispersed to a number of organizations and programs such as the World Health Organization’s COVID-19 Solidarity Fund, the CDC Foundation, No Kid Hungry, Feeding America, National Centers for Disease Control and Prevention’s Emergency Relief Fund, the International Medical Corps and many other community-specific groups.

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Supporting Individuals

Forum members have been supporting their customers in a variety of ways, including by providing fee waivers, payment deferrals, and other assistance to help customers in need, with no negative credit bureau reporting for up-to-date clients.

Another key way in which large banks are serving households is the provision of safe, secure deposit accounts. 

People use deposit accounts as a safe store of value during uncertain times. With general economic uncertainty and an increase in market volatility, people are relying more on safe, liquid, bank deposits as they manage a variety of near-term risks. 

As people demand a safe store of value for their hard-earned money, Forum members have provided this critical service. Forum members provide depositors with a range of online services to access their deposits remotely, which are all the more valuable as people practice social distancing. 

Since the start of the crisis, <a href="https://www.bnymellon.com/us/en/insights/content-series/covid-19.html">Bank of New York Mellon</a> has worked to support its employees and their families with a number of actions and programs. The bank has provided paid leave benefits and an Employee Assistance Program for all employees and their direct family members, including a 24/7 COVID-19 support line. It is providing enhanced U.S. healthcare coverage so that COVID-19 testing and related outpatient services are provided without any employee out-of-pocket expense. The firm has also provided a 2-for-1 match for employee donations.

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Supporting Our Employees

Forum members are actively helping ensure the health and well-being of their more than 750,000 employees. 

From special compensation awards, to additional time off, to counseling services, the nation’s largest banks have been taking significant steps to support their workforces.

In 2020, Forum member institutions:<ul><li>Increased credit to businesses and households by $785 billion to nearly $8.3 trillion.</li><li>Helped raise $2.2 trillion in corporate bonds and $339 billion in equity through the third quarter for U.S. companies, allowing them to continue to pay their workers, operate their businesses and meet their funding needs. This capital raising by large banks fulfills a critical need in the economy to connect savers, such as pension funds and endowments, with companies like Pfizer and 3M that need to borrow capital for everyday business needs. <a href="https://www.fsforum.com/types/press/blog/building-bridges-between-savers-and-borrowers-during-the-pandemic-large-bank-underwriting/">Read more</a>.</li><li>Remained strong and resilient, despite the significant headwinds. The members of the Financial Services Forum in 2020 increased capital and strengthened their liquidity positions while at the same time supporting business and consumers.</li></ul>

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Forum member institutions have been a key source of support for the economy during the pandemic. They have supported the economy in a number of important ways.



In 2020, we facilitated $69 billion in PPP loans to 848,696 small businesses across the country.

COVID-19 Response

Press Releases

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;<h3>By Kevin Fromer</h3><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;<h3>By Sean Campbell</h3><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

This op-ed was featured in <a href="https://www.americanbanker.com/opinion/easing-derivatives-trading-rule-would-help-the-system-not-hurt-it?utm_source=twitter&amp;utm_content=socialflow&amp;utm_campaign=bankthink-tw&amp;utm_medium=social">American Banker's BankThink</a>.&nbsp;<h3>By Kevin Fromer and Kenneth E. Bentsen</h3>&nbsp;<blockquote>Recent attempts by policymakers to eliminate an initial margin requirement for certain trading swaps between affiliates of the same financial institution would reduce costs for consumers and businesses.Such an action would also remove a competitive disadvantage for U.S. banks while promoting safety and soundness in the financial system. This is counter to a&nbsp;<a href="https://www.americanbanker.com/opinion/the-40-billion-gift-that-wall-street-doesnt-deserve">recent BankThink</a>&nbsp;in the July 16 issue of American Banker that made a number of incorrect assertions around both the need for continuing the margins requirement, and the rationale for ending it.</blockquote>However, it is important to first address the hyperbolic characterization of swaps, or derivatives. Swaps are an important and heavily regulated tool that banks and other institutions use to help manage their exposure, and that of American businesses and consumers, to risk and market fluctuations.The requirement that banks post an initial margin based on swaps between their own affiliates is one that should be revisited and ultimately removed. And there is good reason why.First, it yields no benefit. There are two regulatory margin requirements: initial margin and variation margin.Initial margin is exchanged at the time a swap transaction is established — and adjusted during the life of the transaction as needed — to minimize losses if a counterparty defaults on its obligations.This is sound policy for third-party contracts. But in the case of two affiliates or legal entities under the same corporate holding company, the exchange of interaffiliate initial margin serves no purpose in ensuring contract performance.Variation margin, however, does properly mitigate risk between affiliates. That’s because variation margin requires the exchange of collateral between affiliates based on the current value of the swaps, and accounts for changes in market value. The amount being collected through variation margin is also quite sizable.In 2018, the top 20 firms collected&nbsp;<a href="https://www.isda.org/2019/04/09/top-20-firms-collected-nearly-160-billion-in-initial-margin-at-year-end-2018-survey-finds/">more than $850 billion</a>&nbsp;in variation margin, or more than 20 times the amount of initial margin for interaffiliate swaps.&nbsp;In addition, banks also post initial margin on all trades with covered true third parties, amounting to approximately $158 billion.The technical fix policymakers are considering would only apply to the initial margin between affiliates. It would not change the variation margin requirement between affiliates, nor the initial and variation margin requirements for external counterparties.Second, if the initial margin requirement for interaffiliate swaps is maintained, the cost will ultimately be borne by customers and hurt American competitiveness.Indeed, swaps are an important tool utilized by pension funds for teachers, firefighters, manufacturers and many other kinds of businesses — big and small — to help manage risk. The collection of initial margin on transactions between affiliates increases costs for swaps for these end-users and subsequent customers.Given that U.S. bank regulators are the only major G-20 authorities to impose these requirements, the nation’s banks are left on an uneven playing field when competing both against foreign banks and other U.S. nonbanks. European and Japanese regulators, as well as the Commodity Futures Trading Commission and Securities and Exchange Commission, do not require initial margin collection between affiliates.Further, the assertion of lax regulation outside the U.S. is a red herring. It does not support the fact that all major jurisdictions have implemented substantial and similar rules regarding swaps and margin requirements, as per the G-20 Pittsburgh accords then led by the Obama administration.The current initial margin requirement also puts the safety and soundness of banks at risk. Initial margin requirements on interaffiliate swaps perversely act as a disincentive to better, centralized risk management of an institution.The associated costs discourage interaffiliate swaps in favor of hedging with third parties. Removing the requirement would help broaden a bank’s view of its overall risk exposure, and enhance the safety and soundness of the financial system.Finally, the recent BankThink piece oddly mentioned a proposal to revise the enhanced supplementary leverage ratio — a wholly unrelated issue — and repeated an inaccurate assertion that the change would lead to a large decrease in the amount of required capital at banks.Margin is not the same as capital. And importantly, the Federal Reserve’s own analysis showed that the proposal would not result in a material change in capital at the eight U.S.-based global systemically important banks.The eight global systemically important banks have&nbsp;<a href="https://www.fsforum.com/research/">increased their capital</a>&nbsp;to roughly $925 billion, or more than 40% during the past 10 years.Regulators worldwide and institutions have taken other important steps to greatly enhance the safety and resiliency of the global financial system. CFTC leadership of both political parties have supported the revision.<blockquote>After a decade of rapid regulatory change, we agree with the domestic and foreign regulators who have said it is imperative to review the rules to ensure its effectiveness and efficiency.Elimination of the interaffiliate initial margin requirement has bipartisan support because it would enhance the ability of banks to serve the economy without sacrificing regulatory improvements made in the past decade. Such a move is smart policy that would benefit consumers and businesses alike.</blockquote>Kevin Fromer Kevin Fromer is president and CEO of the Financial Services Forum, which represents the eight largest, most diversified U.S. banking institutions.Kenneth E. Bentsen Kenneth E. Bentsen, Jr., is president and CEO of the Securities Industry and Financial Markets Association.

BankThink Op-ed: Easing derivatives trading rule would help the system, not hurt it

Opinion

Letters

Joint Trades Letter in Support of the Adjustable Interest Rate (LIBOR) Act

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The Forum supports proposals that would require public companies to annually disclose the gender, race, ethnic, and veteran status of their boards of directors, nominees, and senior executives. Diversity of corporate boards is an area of focus for our institutions and is critically important to investors and other stakeholders.

Board diversity ensures representation of differing experiences and perspectives and allows for unique approaches to solve complex problems. Our members recognize that board diversity bolsters competitiveness around the world, helps foster a sustainable and inclusive economy, and leads to better results for consumers, clients, and communities.


Diversity, Equity and Inclusion

Statement for the Record Before the Subcommittee on Diversity and Inclusion House Financial Services Committee

Cybersecurity Joint Trades Letter

WCNC

External Link

Bank of America Provides 10,000 Chromebooks to CMS Students in Charlotte

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<ul><li>Citi has provided $173 million in capital, administered over $886 million in financing, and committed more than $79 million in philanthropic funding to more than 80 CDFIs across the country since 2015. The bank has also made its ATM network available free of charge to clients of nearly 30 MDIs and CDFIs – providing their customers with convenience and nearly $1 million in savings.</li><li>Goldman Sachs&nbsp;provided $774.5 million to eight different CDFIs between 2016 and 2020.</li><li>JPMorgan Chase&nbsp;has made 64 loans totaling more than $870 million to CDFIs and invested more than $1.4 billion in 49 different CDFIs through the New Markets Tax Credit program since 2015. Additionally, from 2015 to 2019 the firm provided 1,001 grants to 145 CDFIs totaling $194 million and continues to mentor and advise select MDIs and CDFIs to help them achieve their future success.</li><li>Morgan Stanley&nbsp;has provided $3.6 billion in investment in 41 CDFIs and $30.5 million in investment in three MDIs between 2016 and 2020. Additionally, the firm has <a href="https://www.morganstanley.com/press-releases/morgan-stanley-announces--10-million-to-support-minority-deposit">committed</a> $10 million in grants supporting MDIs.</li><li>Wells Fargo&nbsp;has invested $847 million in 305 unique CDFIs through grant and debt capital since 2015. Additionally, the bank has <a href="https://stories.wf.com/wells-fargo-announces-seeking-commit-50-million-capital-minority-depository-institutions/">committed</a> to investing up to $50 million in capital for MDIs.</li></ul>

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Supporting CDFIs and MDIs

We are supporting hundreds of Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs) by providing over $8.5 billion in capital and financing between 2016 and 2020.

<ul><li>Bank of America&nbsp;in 2020&nbsp;<a href="https://newsroom.bankofamerica.com/press-releases/bank-america-announces-four-year-1-billion-commitment-supporting-economic">committed</a> $1 billion over four years to help local communities address economic and racial inequality. The firm has also <a href="https://newsroom.bankofamerica.com/press-releases/community-development/smithsonian-announces-race-community-and-our-shared-future#:~:text=Bank%20of%20America's%20%2425%20million,economic%20opportunity%20in%20minority%20communities.">committed</a> an additional $25 million to the Smithsonian to fund its Race, Community and Our Shared Future initiative, <a href="https://newsroom.bankofamerica.com/press-releases/corporate-philanthropy/bank-america-expands-support-boys-girls-clubs-america-1">provided</a> a $1 million grant to the Boys &amp; Girls Clubs of America, and made a $22.1 million <a href="https://newsroom.bankofamerica.com/press-releases/corporate-philanthropy/bank-america-expands-support-boys-girls-clubs-america-1">investment</a> in 2020 Neighborhood Builders and Neighborhood Champions in Support of Local Organizations.&nbsp; &nbsp;&nbsp;</li><li>BNY Mellon&nbsp;has <a href="https://www.bnymellon.com/us/en/about-us/newsroom/company-news/bny-mellon-commits-20-million-to-fund-the-future-workforce.html">committed</a> $20 million to community colleges and a select group of local and national organizations to support workforce training programs in traditionally underrepresented minority groups and communities. Additionally, the bank made an initial pledge of $1.5 million to organizations including My Brother’s Keeper, the NAACP Legal Defense and Education Fund, the Southern Poverty Law Center, the National Network for Safe Communities and the Vera Institute of Justice.</li><li>Citi <a href="https://www.citigroup.com/citi/news/2020/200923a.htm">launched</a> more than $1 billion in strategic initiatives in 2020 aimed at closing the racial wealth gap. The bank also <a href="https://www.citigroup.com/citi/news/2020/200117a.htm">launched</a> the $150 million Citi Impact Fund to make equity investments in ‘double bottom line’ private sector companies, with a focus on women and minority owned businesses.</li><li>Goldman Sachs&nbsp;has launched the One Million Black Women <a href="https://www.goldmansachs.com/our-commitments/sustainability/one-million-black-women/index.html">initiative</a>, a $10 billion investment initiative to advance racial equity and economic opportunity by investing in Black women with the goal of impacting the lives of at least 1 million Black women by 2030. It has also <a href="https://www.goldmansachs.com/media-relations/press-releases/current/gs-fund-for-racial-equity.html">created</a> the Goldman Sachs Fund for Racial Equity, which launched with $10 million – building on the more than $200 million the firm has granted over the past decade to organizations serving communities of color – and aims to support organizations addressing racial injustice, structural inequity and economic prosperity.</li><li>JPMorgan Chase&nbsp;in 2020 <a href="https://www.jpmorganchase.com/news-stories/jpmc-commits-30-billion-to-advance-racial-equity">committed</a> $30 billion to advance racial equity over the next five years through promoting affordable housing and homeownership for underserved communities, growing Black- and Latinx-owned businesses, improving financial health and access to banking in Black and Latinx communities and accelerating investment to build a more diverse and inclusive workforce.</li><li>Morgan Stanley&nbsp;<a href="https://www.morganstanley.com/press-releases/morgan-stanley-announces-10-million-to-support-national-urban-le">announced</a> $10 million in grants to support the National Urban League, aimed at supporting financial literacy, homeowner counseling and workforce development programs. The firm also <a href="https://www.morganstanley.com/press-releases/morgan-stanley-commits--5-million-to-naacp-legal-defense-and-edu">committed</a> $5 million on top of matching employee contributions to the NAACP Legal Defense and Education Fund to support its work in fighting for racial justice.</li><li>State Street&nbsp;in 2020 <a href="https://www.statestreet.com/content/dam/statestreet/documents/New_Commonwealth_Racial_Equity_and_Social_Justice_Fund_Press_Release.pdf">announced</a> a five year, $5 million commitment to the New Commonwealth Racial Equity and Social Justice Fund, which supports Black- and brown-led organizations that are working on economic empowerment, youth civic engagement, healthcare equity and criminal justice reform.</li><li>Wells Fargo&nbsp;<a href="https://stories.wf.com/60-billion-plan-aims-to-boost-african-american-homeownership/">launched</a> a ten-year initiative with the National Urban League and the National Association of Real Estate Brokers to provide $60 billion in home loans to 250,000 African American homeowners and to invest $15 million in homeowner education and counseling.</li></ul>

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Combatting Inequality

We are dedicated to combatting inequality through a series of important initiatives. These initiatives support minority owned small businesses, provide funding for community organizations that are dedicated to closing the racial wealth gap and expand access to affordable housing for traditionally underserved communities. 

<ul><li>Bank of America&nbsp;has committed to spending nearly $2 billion annually with diverse businesses through its <a href="https://about.bankofamerica.com/en-us/what-guides-us/vendor-management.html#fbid=tlM4qFkwCad">Supplier Diversity program</a>.</li><li>BNY Mellon&nbsp;has established a dedicated <a href="https://www.bnymellon.com/us/en/supply-chain-responsibility-program/supply-chain-responsibility-program-statement.html">Supply Chain Responsibility program</a> to build and maintain a diverse supplier base, as well as host workshops and expos to support diverse vendor development.</li><li>Citi actively seeks diverse suppliers through minority and women business development organizations and participation in various trade show activities while utilizing diverse suppliers and consultants through their <a href="https://www.citigroup.com/citi/suppliers/who.htm">Supplier Diversity program</a>.</li><li>Goldman Sachs&nbsp;has <a href="https://www.goldmansachs.com/our-commitments/sustainability/our-vendor-program/vendor-diversity/">committed</a> to increasing spending with diverse vendors by 50 percent by 2025.</li><li>JPMorgan Chase&nbsp;has set a goal of continually exceeding $1 billion in spending with <a href="https://www.jpmorganchase.com/about/suppliers/supplier-diversity">diverse suppliers</a> each year.</li><li>Morgan Stanley&nbsp;<a href="https://www.morganstanley.com/about-us/supplier-diversity">partners</a> with supplier diversity organizations like the Women’s Business Enterprise National Council and the National Minority Supplier Development Council.</li><li>State Street&nbsp;has committed to increasing its spending with diverse suppliers over the next three years in order to strengthen Black- and Latinx-owned businesses.</li><li>Wells Fargo&nbsp;aims to spend 15 percent of its procurement budget with diverse suppliers through the bank’s <a href="https://www.wellsfargo.com/about/diversity/supplier-diversity/commitment/">Supplier Diversity program</a>.</li></ul>

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Supporting Diverse Suppliers

Our institutions are committing to partner with diverse vendors and suppliers to support minority and women-owned businesses.

We invested nearly $9 billion in Community Development Financial Institutions between 2016 and 2020.

Supporting Historically Underserved Communities

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Youth INC

Goldman Sachs Invests in Rise Academy For Leaders of Color

Desert Sun

Bank of America Donates Nearly $800k to Inland Empire Nonprofits

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Yahoo Finance

Morgan Stanley Awards $21.7 Million to Opportunity Finance Network to Support Equitable Recovery in Underserved Communities and Bolster the CDFI Industry

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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, Forum Chairman

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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 Vice Chairman

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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

Todd Gibbons currently serves as the Chief Executive Officer of BNY Mellon. Prior to that, Todd had been a Vice Chairman of BNY Mellon and CEO of Clearing, Markets and Client Management. In that role he oversaw the Pershing clearing business; the trading, financing, collateral and liquidity management solutions delivered through the Markets business; treasury services and commercial payment activities; the U.S. government securities clearance and U.S. tri-party repo businesses delivered through BNY Mellon Government Securities Services Corp; credit services; global client management; and regional area management. From 2008 through 2017, he served as CFO. Previously, for six years he was Chief Risk Policy Officer, overseeing credit, operational and market risk management of the company and The Bank of New York.

Todd also served as CFO of The Bank of New York for almost a year prior to the merger. He first joined The Bank of New York in 1986 and held top management positions in the capital markets business, including head of global treasury, with responsibility for asset and liability management, funding, money market trading, swaps and derivative products. Prior to joining The Bank of New York, he was assistant treasurer at Handy and Harman, a leading refiner, processor and fabricator of precious metals.

Todd is a member of BNY Mellon’s Executive Committee. He also serves on the advisory board of Wake Forest University’s Business School. He holds a B.S. in Business Administration from Wake Forest University and an MBA from Pace University.

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Thomas Gibbons

BNY Mellon Chief Executive Officer

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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.

She is Vice Chair for Partnership for New York City and a member of the Harvard Business School’s Board of Dean’s Advisors, the Stanford Global Advisory Board, the Economic Club of New York and the Council on Foreign Relations. 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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