Wall Street CEOs Testify in Washington on COVID Relief, Diversity Efforts
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JP Morgan, Goldman Sachs, Citi CEO Testimony Talking Points
- CEOs highlighted the role banks played in deploying capital to struggling Americans and small businesses
- Senate Democrats remain concerned that the banks’ record on social justice is still not “up to par”
- XLF, the broad-based S&P financials ETF, pushed higher on Wednesday continuing recent outperformance
Wall Street CEOs took to Washington on Wednesday, albeit virtually, to answer questions from lawmakers about social justice and the role banks played in COVID relief efforts. Wall Street leaders were quick to highlight the role they played in deploying capital to struggling families and businesses, most notably getting over $69 billion in federal funds to nearly 850,000 small businesses.
JP Morgan CEO Jamie Dimon, the only major bank executive remaining from the financial crisis of 2008, was quick to highlight the work JP Morgan has done to support the economy over the last 12 months. “We entered this crisis from a position of strength, and leveraged our size and scale to contribute to stability in our country and ongoing support for the ‘real economy’,” said Dimon during his testimony.
Much of the hearing focused on the issues of racial and social justice, and what major institutions on Wall Street are doing to combat serious inequities. Jane Fraser, the newly appointed CEO of Citi Group, represents the dawn of a new era as the first woman to lead a major Wall Street bank. In her testimony, Fraser spoke about how banks have historically contributed to “systemic inequities,” and that Citi had set aside more than $1 billion to fight racial and wealth inequality in America.
Also taking part in the testimony was David Solomon of Goldman Sachs, James Gorman of Morgan Stanley, Charles Scharf of Wells Fargo, and Bank of America’s Bryan Moynihan.
While bank CEOs were speaking with policymakers, financial stocks continued their push higher as equities posted modest gains on Wednesday. Financial stocks have benefitted tremendously over the last 6 months as sectoral rotation, higher yields, and other macro themes have turned last year’s laggards into some of this year’s leaders. In 2021 alone XLF has risen over 29%, while the S&P 500 is up just over 13% respectively.
XLF vs. S&P 500 YTD Performance
Chart created with TradingView
--- Written by Brendan Fagan, Intern for DailyFX
To contact Brendan, use the comments section below or @BrendanFaganFX on Twitter
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.