Federal Reserve demands clarity on US banks’ diversity efforts
The US Federal Reserve has asked banks it oversees to provide more clarity on what they’re doing to tackle the lack of racial and gender diversity in the financial industry.
Sheila Clark, the Fed’s programme director for its diversity office, says submissions of diversity policy and practice assessments had “slightly increased” over the past two years.
But in a congressional testimony published ahead of a hearing on Tuesday, the Fed official says the central bank is “not satisfied with the level of responsiveness”.
Part of Clark’s current approach to boost this responsiveness has seen the Fed work with other financial regulators, though it doesn’t name which ones.
State of diversity in the US banking industry
In December 2019, The Washington Post asked America’s 15 biggest banks to publicly disclose their most recent government diversity reports.
These two-page forms, known as EEO-1s, are what Clark refers to in her congressional testimony.
Banks submit these forms each year to the Fed. They break down banks’ US workforce by race and gender across ten job categories.
Just two – TD Bank and BNY Mellon — of the 15 banks The Post requested these forms from actually revealed all data they had submitted to the Fed.
At TD Bank, there were no black women in its top ranks in 2018, out of 42 senior executives. At BNY Mellon, its US executive tier was made up of 14 people in 2018, all white except for one Asian man. The bank has since added two black executives.
But if you look at the last decade, many banks have regressed rather than progressed in their diversity efforts.
In 2018, just 2.7% of Goldman Sachs’ senior executives were black, compared with 3% in 2012.
At Citigroup, black employees fell from 16% of its US workforce in 2009 to 10.3% 2018. In December 2019, black executives accounted for less than 2% of its senior ranks.
The Fed’s own progress to date
Clark’s congressional testimony mainly focused on the progress made by the Fed itself.
In 2019, there were 19 appointments to the Fed’s official staff. Five of these appointments (26%) were minorities, and six (32%) were women.
As of September 2020, the Fed employs six female division directors, of which one is African American. Eight division directors are male, of which one is Hispanic.
In addition, there are three African Americans, one Hispanic, and three women serving as deputy directors. Clark did not reveal how many deputy directors the Fed employs.
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