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If bank bosses have learned one thing since the financial crisis, it’s that it’s much easier to inflict pain on an individual than a big, faceless company – and it’s really hard to hurt six faceless companies at the same time. That’s why the financial bosses who appeared before the U.S. Senate Banking Committee on Wednesday were mostly as bland as can be. Shareholders probably wouldn’t have it any other way.
During the grilling, JPMorgan’s Jamie Dimon and peers from Citigroup, Morgan Stanley, Wells Fargo, Goldman Sachs and Bank of America faced questions on topics such as their lack of new lending during Covid-19, share buybacks and worker pay gaps. They stuck to the script, pledging to fund green energy, help reduce racial wealth inequality and let workers make their voice heard, whatever that means.
On one topic, they were decisive and unanimous. Asked by Republican Senator Pat Toomey if they were committed capitalists, all enthusiastically said yes. In that light, their patchy progress on social issues makes sense. Even though Morgan Stanley’s top division heads are mostly male, and JPMorgan charged $1.5 billion of overdraft fees last year, the banks are serving their owners quite well. An investor in Dimon’s bank has beaten the S&P 500 Index by 50% over five years. Democrats like Elizabeth Warren disdain the game but can’t do much to the players if there are no major scandals and shareholders remain content.
Meanwhile what the banks want is to be left alone, and the remotely-held hearing’s stage management spoke to that. From Wells Fargo chief Charlie Scharf’s dentist’s-reception artworks to Morgan Stanley boss James Gorman’s heartrendingly empty office, the six chiefs made sure no personality was discernable. Faux-austerity is wise since all of them were in fact paid tens of millions of dollars last year.
Behind the blandness lie uncomfortable inconsistencies. Lenders have pledged to raise minimum wages, but none would explicitly support employees if they wanted to unionize. All plan to lend more to communities of color, but executive teams remain overwhelmingly white. In short, the banks say they’re doing what they can, and that’s enough to keep politicians at bay. But in reality they’re doing only as much as they have to, which is all shareholders want.