Goldman’s diversity push; bitcoin futures expire
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Goldman Sachs said it will try to hire more women, blacks and Hispanics by requiring managers to interview two diverse candidates for any new job opening, “a push the firm hopes will change its heavily white, male workforce.” The bank said it is close to achieving its goal of having women account for 50% of its workforce by 2021. “The new targets, though, don’t include a time frame, suggesting that racial imbalance is a tougher problem to solve.”
“It is a sign of the times and, honestly, a sign of how critical it is to achieve gender diversity for business goals that they are making a public statement on it now,” said Anna Beninger, a senior director of research and corporate engagement at Catalyst, a non-profit that advocates for greater inclusion in the workplace. Financial Times, Washington Post
Banking isn’t the only industry with gender issues. The American Economic Association announced a policy banning harassment and discrimination as it released disturbing survey results that “come at a moment of soul-searching for the economics profession over its treatment of women. The survey found that 2% of female economists “had been assaulted, 6% said they had been the victim of an attempted assault and 12% said they had been touched in a way that made them feel uncomfortable. Also, 42% of female economists said they had heard or overheard another economist or a student make inappropriate, sexual or suggestive remarks at some point over the past 10 years.” AEA President Ben Bernanke, the former Federal Reserve chair, called the survey results “disturbing.” Wall Street Journal, New York Times
Fidelity National Information Services’ offer to buy Worldpay for $35 billion “the biggest financial services takeover since the recession,” is being “fueled by a boom in ecommerce and digital payments … one of the biggest structural changes in financial services since the crisis, [which] is now driving a record-breaking run of merger and acquisition activity as companies scramble to take advantage.”
“The shift in payments has pushed the reliable but aging systems underpinning banking and commerce to their limits,” the Wall Street Journal comments. “Large banks are merging to free up more money for tech overhauls. Silicon Valley is pouring money into financial-technology startups. Governments are pressuring financial firms to find new ways to fight fraud and corruption.”
While the FIS-Worldpay merger “has some logic, justifying its high price will require delivering on an ambitious strategy to expand into developing markets,” the Journal says. “Where the strategy holds particular promise is in emerging markets, where reaching smaller merchants is a challenge. On a conference call with analysts, the companies stressed that FIS has significant relationships with banks in India, Brazil and Southeast Asia. Using them as a conduit to end-clients in need of payments solutions makes sense.”
FIS CEO Gary Norcross discusses what the deal means for both companies.
Winning them over
Support appears to be growing among big investors in Deutsche Bank for a merger with its German rival Commerzbank, even among those previously opposed to the idea.
But Andrea Enria, the chairman of the European Central Bank’s Single Supervisory Mechanism, the eurozone’s top financial supervisor, “has criticized the idea of creating national or European champions to compete with global rivals, potentially putting [it] on a collision course with Berlin’s efforts to protect its banking industry via a merger of Germany’s two biggest lenders.”
Separately, the New York Times explores the long history between President Trump and Deutsche Bank, which is the “subject of investigations by two congressional committees and the New York attorney general. Investigators hope to use Deutsche Bank as a window into Mr. Trump’s personal and business finances.”
Wall Street Journal
Over and out
Cboe Global Markets, the first U.S. exchange company to launch bitcoin futures, “has pulled the plug on them, the latest sign that mainstream financial firms are losing their enthusiasm for cryptocurrencies. Cboe’s move means that the bitcoin-futures market it launched in 2017 will wind down once its last contract expires in June.” When the exchange launched bitcoin futures in December 2017, one bitcoin was worth about $17,000. It’s currently trading at about a quarter of that.
The sharp drop in bitcoin prices “is forcing even its most ardent supporters to shelve dreams of global disruption and focus on simply tightening their belts long enough to outlast the downturn.”
“With only a House majority, Democrats are unable to enact legislation — but that doesn’t mean they’re powerless,” an op-ed says, noting that pressure from the House Financial Services Committee forced JPMorgan Chase and Wells Fargo to “cater to their demands and cut off relationships with disfavored clients,” such as the private prison industry.
French banks have been told to put aside more capital amid fears that “credit in the country might be growing too quickly and the financial system needs to hold more ammunition in the face of growing risks,” according to the paper.
“French banks are healthy and have done their work in providing credit to the economy but we are using this precautionary instrument to provide a cushion when the cycle turns,” said François Villeroy de Galhau, governor of the Banque de France.
A new audience
JPMorgan Chase announced a $4.95 a month checkless banking account with ATM and mobile app access, a debit card, digital payments and free check cashing with no minimum balance. The account does not allow overdrafts, which have “generated significant [fee] revenue for banks in the past” but “have angered customers, brought down the wrath of politicians and discouraged people with low incomes from using banks.” Thasunda Duckett, head of Chase Consumer Banking, “said she hoped the new accounts will attract more low-income individuals and people who have never had bank accounts.”
“We will hold business unit heads accountable for working to ensure an inclusive environment and to progress the goals that we have described. The extent of their efforts will become an important part of what is considered as we pay and promote managers.” — A memo to Goldman Sachs employees about the bank’s new hiring policies.