“Silence on race is no longer an option”

Protests have been escalating across America -- and in 10 days, we’ve seen some large corporations and Wall Street firms grapple with change, sometimes stumbling along the way.

“Silence on race is no longer an option” for companies, explain my colleagues Jeff Green and Gerald Porter Jr. From the perch of finance, Morgan Stanley added new members to the bank’s operating and management committees, while Bank of America pledged $1 billion over the next four years to battle racial inequality. Yet Wall Street still must confront its own failings.

At most of the large banks, less than 5% of the senior executives (and often fewer than 3%) are black. And in some cases, diversity has declined over the past decade.

Frederick Baba, a black managing director at Goldman Sachs, wrote a Bloomberg Opinion piece to share advice for his white colleagues.

"So as to the question — 'how’s it going?' — it’s not going great. While I appreciate how many colleagues and others have reached out and expressed solidarity, I would appreciate it more if people in finance and business would instead do the following:

1. Reach out to and support diverse analysts and associates within your firms and businesses; a common bit of feedback from junior colleagues at Goldman Sachs is that while there is a commitment to equality and social justice up top, they don’t necessarily see commitment and support from their direct managers.

2. Donate money to advocacy organizations. There are six times as many white Americans as black Americans. The more people who get off the sidelines, the better.

3. Donate time to advocacy organizations and directly to members of disadvantaged groups.

4. Support minority-owned businesses. Policing is closely tied to class, just as socioeconomics are closely tied to race.

The interracial wealth gap is huge. Our society naturally defends vested economic interests, and while it won’t solve everything, economic empowerment and socio-political empowerment are closely linked."

Meanwhile, Mike Novogratz was a rare Wall Street type to walk in the protests in New York. He spoke with me for Bloomberg Television about his experience, and reflects on how he felt he should have done more to build a diverse firm as he started anew. Find his full interview here.

Here's also an interview with Ariel Investments CEO John Rogers on how corporate America is missing its moment to act.

Continue to send thoughts to [email protected].

The Great, Uneventful Reopening

It’s the moment we’ve all been waiting for. New York can start to see stores reopen on Monday after coronavirus lockdowns, but many of the biggest won’t, Bloomberg’s Kim Bhasin reports.

At the same time, stocks were jumping on Friday with the Nasdaq 100 setting a record, as a bet on the economy came roaring back. Employers added 2.5 million jobs in May -- beating the 7.5 million loss that economists expected. Still, black unemployment climbed to the highest in more than a decade.

And with more than 40 million Americans having filed for unemployment, there are still major doubts on Wall Street about an even-handed recovery. Lazard CEO Ken Jacobs -- whose firm is working on a wave of restructurings -- said he thinks there’s more crisis ahead. “The second wave likely starts sometime this summer for the companies that don’t have enough money to make it through,” he said.

More on Wall Street

• The Fed is flirting with moral hazard, Bill Dudley tells my colleagues Tom Keene, Lisa Abramowicz and Jonathan Ferro.
• And the Fed’s actions will force it to face “a day of reckoning,” Guggenheim’s Scott Minerd tells me. He said he also sees a fundamental change to capitalism underpinned by an addiction to debt.
• Perella Weinberg becomes the latest investment bank to make cuts to its workforce, following Evercore and Lazard.
• Wall Street warns corporate America -- get your cash now while investors are still ready to dish up.

More to come. - Sonali