Transcript
Mike Johnson: This is truly a national conversation at a national event, so thank you for that. Let's dive right in. Today I'm excited to welcome Raphael Bostic and Raymond McGuire. A little bit about their background.
Raphael Bostic is the 15th president and CEO of the Federal Reserve Bank of Atlanta. He's responsible for all the Bank's activities including monetary policy, importantly, bank supervision and regulation bylaws, and [inaudible] services. He's also a participant on the Federal Open Market Committee.
Raymond McGuire is the vice chairman of Citigroup and chairman of Citi's Banking Capital Markets and Advisory business. Mr. McGuire, Ray, is a member of the Institutional Clients Group executive committee, and the Institutional Clients Group business practices committee, and he's a board member of Citigroup Global Markets. Ray's based in New York. Welcome both of you. Really glad to have you here today.
Their full biographies and the biographies of all the other speakers are on the event page for the conference, and there have been links to those in the emails that you've received throughout the week. Finally, this wouldn't be a Federal Reserve event if I didn't have a disclaimer.
Please note that the views and opinions expressed today are those of the speakers and do not necessarily represent those of the Federal Reserve System. I was going to say or the Federal Reserve Bank of Atlanta, but that may not be quite true with Raphael being here today, so thank you for that. Again, thank you Raphael and Ray for joining us today.
Before we get into the Q&A discussion and the meat of our conversation, I just wanted to give each of you an opportunity to say a word of hello and any opening comments that you wanted to provide to our audience. Raphael, do you want to kick us off?
Raphael Bostic: Sure, thanks Mike for that nice introduction. Yeah, I'd be happy to do Mike's introduction because he's on my team. It's really good to see you, and I'm really glad to be here. I'm glad that even with the pandemic and all that's going on, we're able to have this conference, and [crosstalk] minorities in banking and find ways to improve their standing and their stature.
This is a really important issue, and in these times, I think it's very appropriate for us to be paying attention to these things, putting a spotlight on where there are challenges but also highlighting places where there are opportunities and some really good things happening. I'm really glad to be here. Chairman McGuire, it's really great to have you with us. I'm really looking forward to the conversation.
Raymond McGuire: Thank you, Mike, for the introduction. Mr. President, thank you. It is an honor to be with you. You are so respected and admired by so many across this country, and please add me to the top of that list. All of that which you stand for and the excellence and the leadership is exemplary and gives us all something to which we can look forward, including myself. I'm delighted to be here. As they say in the neighborhood, if you don't know, now you know. Mike?
Johnson: Right. Well you all introduced the event much better than I did, so thank you for that. Ray, if you don't mind, let's start with you.
Given the importance of this topic and the roles that you both play in the industry, I think it would be great for our audience to hear a little bit about your story, your brief career path, to the extent of any obstacles you faced and clearly overcame. Maybe I shouldn't have even said it that way but addressed systemic racism along the way. Start us off by sharing your story a little bit.
McGuire: I would first like to observe that this is an unprecedented time, and this is an unprecedented session given the journey that each of us have traveled to get here today. I started off on the other side of the tracks, in the neighborhood in Dayton, Ohio, raised by my single mother. In sixth grade or fifth grade, there was a teacher who recognized that I had some talent, and she suggested that I go to a school where there was a huge focus on education. Education was and is the ticket.
I went to the school from sixth grade to 11th grade, and in the 11th grade there was a teacher who said based on my 4.0 average, being president of the school ... and averaging 28 points per game, if I were as good as they said I was, then maybe I should go and test myself against the big boys and girls in the East.
We were able to put together a little money to find an airplane ticket to Bradley Field, which is now Bradley International Airport. I got to Bradley International Airport and took a Greyhound bus around New England, looking at schools, at 16, by myself. I landed at a school called Hotchkiss, and I did well enough that I applied to six colleges: Harvard, Yale, Princeton, Amherst, Johns Hopkins, and Northwestern. I was fortunate to get into all six and decided to go to Harvard.
Went to Harvard and did relatively well. Spent a year in France on a fellowship and came back and started the joint program of Harvard Law School and Harvard Business School. Completed that, and this September will mark 36 years on Wall Street. Along the way, it's been scholarship and financial aid.
People ask, Mike and Mr. President, "how did you get here?" I tell them there are four factors that have allowed me to get here. Prayer, preparation, performance, and paranoia. Each of those gives you the wherewithal to get through the systemic racism about which we will talk, but you have to be equipped with at least one or two of those in order to make it up what we call the rough side of the mountain.
We're here now, and there's a lot to discuss about how we go from here forward. How do we address that systemic racism that permeates the entire country? What steps can we collectively take and what can we do individually to as you said appropriately, overcome the systemic racism?
Johnson: That's an incredible story, Ray. Before I turn it over to Raphael, can I ask a follow-up question? I loved your four Ps. Could you unpack the paranoia just a little bit so that myself and I think everyone else has a clear picture of what you're talking about here?
McGuire: When you grow up in the neighborhood and you grow up on the courts, somebody's always trying to dunk, and I'll speak a bit in the vernacular so that people connect. They're always trying to dunk on you, or they're always trying to take your lunch money.
The same rules apply on Wall Street, which means that there are always people who covet the position that you're in, and they either covet the position that you're in or they want to be on the deals in which you've been appointed.
They want to have the relationships with the clients that you've developed over time. It's a highly, highly competitive field. Not dissimilar to others, but especially it's highly competitive for people who look like me.
As I said, 36 years on Wall Street, 13 years running an investment bank—that is—history I think will show–that is the longest head of an investment bank in the history of Wall Street, of any color.
In order to get there, you have to perform; you have to prepare; you have to be a bit paranoid—maybe a lot—and for me this is a walk of faith. It's a walk of faith. My steps have been ordered, so I'm fortunate and blessed to be here.
Johnson: Thank you for sharing that and unpacking that. Actually, in the chat, there was a comment about a great analogy from the streets to Wall Street, so thank you for that.
McGuire: I will say from the streets to the suites, or as we say in Dayton, from Dayton to Davos.
Johnson: Thank you for sharing that. We'll unpack that a little bit more, too. Let me give Raphael a chance.
Bostic: I've never been to Davos, so maybe I can add on that at some point. It is funny; when I heard Ray's four Ps, I was expecting to hear something like paranoia because fear has been a tremendous motivator for me as well, and just in the sense of I'm given privilege, I'm given opportunities, and I've got to do my best to make sure I don't stumble and keep pushing through.
My background is very different from Ray's. I was raised in a suburban town in southern New Jersey near Philadelphia. Both my parents had gone to college, and so they had really infused in me the idea that I needed to do great in school, and that if I did great in school, good things would happen.
I actually got lucky in the sense that I did very well in high school, as well. We had neighbors across the street who had some older children than ours, and [they] just told us about something that we would not have known about, like the SAT or the PSAT, which sets you up to get scholarships for college. We did not know about those things and were really given an opportunity to participate because of some Good Samaritans on our block.
With that, I took the test, did well. I also went to Harvard undergrad, and that was for me a very eye-opening and expanding experience. There were just so many people and backgrounds and experiences and perspectives I'd never seen before. It was a bit intimidating to be honest, but then it was like, "well, I'm here; I better just make something of it," and really tried to invest and commit to it.
For me, I studied economics. I fell in love with it and decided to get the PhD out of, just as a [inaudible], really. Went to grad school, hated it. It was a very, very difficult experience, but there again, I had at key junctures some people who looked out for me and really said, "keep with it, you can do it, and you can achieve." I almost quit banking a couple times. I went to professors and they were like, "OK, take a deep breath, step back, refocus, recommit, and try to move forward."
Since then, I've really focused on things that I care about and am passionate about. Urban places, growth, discrimination, access to capital—all of those sorts of issues—and whether it's a vision or for some deeper sense, the world has kind of come around to the places where I've been interested in.
With the Great Recession, I had been working on housing and home ownership and mortgage lending and discrimination. Then we have a housing practice. Here at this Bank, all the events that have happened in the past three or four months—we had started on that journey here, but the events have given us an opportunity to have a profile that we might not have had otherwise.
I guess for me, the thing that I have also stuck to is just [inaudible]. Saying things that I feel and that I know and not being apologetic but really acknowledging the world as it actually exists and hoping that people hear that and will appreciate that; that is stuff that's required and merits reflection. I don't have any catchy phrases like Ray does, so I'm sorry about that.
Johnson: No, but you had great insight. I mean my key takeaway from both of you is education, timely mentorship, a degree of paranoia, but also sticking to your guns and what you believe in and your commitment. Thank you both for sharing that.
Let's shift gears a little bit and talk about today. Maybe talk a little bit—Raphael, I'm going to start with you—about how your role—you started to touch on this—but how your role and the role of your organization, meaning our organization, has changed amidst the racial justice movement and I guess I should say the societal injustice that we're seeing in the country these days, particularly with respect to Black Americans. How have you thought about your role differently and thought about the role of your organization differently?
Bostic: That's a really interesting question. For me, when I first took this job, there was a lot of focus on being the first Black president of a reserve bank. I really wanted to push back against it is not the right way to say it, but really to say, "I'm the president of a reserve bank who happens to be Black, and I need to be excellent at being the president and if I do that, then the fact that I'm a Black person will stop being an issue, and it'll stop being a theme."
What changed I think is that being a Black person actually has at least come up to the same level of prominence in the sense [that] I still have to be a great president, but the position now gets me to talk about what it means to be a Black person and also really makes the point that just because I have a title doesn't mean that those other realities don't exist for me. That's been something that I've had to sort of lean into a bit more.
Now the world takes it where it wants you, and I guess for me, I've not tried to push back when the waves have taken me somewhere; just ride it and make the most of it. In this instance, there are some messages that need to be heard and need to be said, and I have a platform to do that. I'm going to do that. I still do the president stuff.
I also think that this race element is something that it really informs being the president and should inform the Fed and all of our institutions. That's really what I'm trying to talk about. I kind of shifted into a much more balanced perspective, and I guess I'm less sensitive about the distribution of my public [inaudible], because all of them come back to this issue, as well.
Johnson: That's great. We didn't plan on this, but I'm going to follow up, Raphael, with a question or maybe it's a comment, I'm not sure. Would you comment a little bit on the article that you wrote that was very poignant about participation in the economy and what that means to you?
Bostic: Actually, I want to take this back, back up a little bit. One of the realities that I face in my role is that people ask me questions that they don't ask my other president colleagues because I'm a Black person. That is a reality that became much more central to thinking about sort of the position that I was going to take on all of these events.
I had a good conversation with my team, and they said, "look, you're going to get a bunch of questions on this, so you might as well sit down and just say what you're thinking. Put it out there, eliminate all uncertainty, and then refocus the discussion on not about what my reaction [is] because that's already out there, but what should we be thinking about doing about it."
For me, I think the biggest message is that ... our racism and structural racism is not just a moral issue. It drags us down economically, and that's something that we need to be talking about much more. I'm really pleased that since that essay has come out, there's been a ton of attention on it and it has gone far...
The first viral thing I've ever done, really, and it's really reached a range of people to make me think that there's hope. It's reached them, and it's also made them think hard about what's going on, I think, differently. I think that's been a really good thing. It's allowed us to have conversations I couldn't have imagined we would have had before.
Johnson: Thank you for that. Ray, what about your role in a related but slightly different profession? Your role and the impact on both you and your institution.
McGuire: Let me echo a lot of what President Bostic has said, but let me underscore the following. We should not in any way miss the opportunity to underscore, notwithstanding his humility, the unassailable excellence that is represented by President Bostic. The unassailable excellence. He has gotten here because he was the best.
What we need to understand in this world is notwithstanding the levels which we achieve as Black people, the adage still applies: In order to be equal, in order to be considered for these positions, your excellence has to be unassailable. He's tremendously humble at the position that he's achieved, but he didn't have a Plan B by what we write and what we say. We can't demur from that today.
Those of us who have been fortunate to be put in these positions of leadership, if we so choose, if we so choose—and I'm not certain that we have an option—then we have to be vocal. We have to live by an example, and he's written, and he's written precisely and eloquently with results.
There are other publications that have now come up. I just saw a publication that came out yesterday written by a brilliant economist who happens to be Black that identified the income gaps and the impact on the U.S. economy for the past 20 years given the systemic racism. She identified $16 trillion, and she's gone through it methodically. The role that the president has outlined and the role that I have is one where we have to represent.
We have to do our day jobs, and we have to perform in order to maintain credibility within the institutions. Given that we have not only the profit motive; we now have an agenda that says we need to take care of all of our shareholders, we have to be focused on both, but we don't get there without performing. It's not a popularity contest. You have to perform. You maybe even have to overperform to get here.
The roles again, to that point, the roles that we have, my word says when the foundation is crumbling, what will the righteous do? We have to stand up. We have to stand up, and so you see us today standing up in ways perhaps we weren't requested to stand up as visibly as what we have been, and so we accept that responsibility. We accept it with humility, and we accept it with all of the things that it comes with, which is tough. It's the hardest of the journey.
I said, up the rough side of the mountain, when it has been the rough side of the mountain, and so we're here now. Hollywood never scripted this years ago. You get two of us who look like we do, being interviewed by you on such an important stage. It doesn't get any bigger than the Federal Reserve. This is it.
Johnson: Thank you for that, Ray.
Bostic: [inaudible] and say, you know you talk about my background and my uniqueness; you've been a pioneer as well. For all the folks out there who are thinking, can I do this on Wall Street, can I do this in banking, you're example number one.
You are the pillar who has sort of come before so many and sort of lived with the sharks and beaten them down and triumphed and prospered. Your humble place is probably in other places. There's a pretty big spotlight on you, too, and that's why it's really [inaudible] just to have you here with us today. It's truly an honor to be talking with you.
McGuire: Thank you. Thank you very much. Mike?
Johnson: I couldn't agree more. Thank you both for that. If you have a chance to look at the chat, obviously it's resonating very well with the folks who are on the call today.
Let me shift gears a little bit and talk about ways to dismantle systemic racism, including and primarily by one way in the finance field, narrowing the racial wealth gap, whether it be financial policy, financial systems, how those play out in our world.
I guess the fundamental question is we came through the last Great Recession, and that gap widened. Do you have thoughts on how today's moment with COVID, with the racial justice movement in the world, how do we seize the moment today and within our systems, make sure that that wealth gap can narrow? Ray, what are your thoughts on that?
McGuire: I'm going to reference the report that we just issued that identified the $16 trillion of addition to the U.S. GDP, $5 trillion today if we addressed it. The racial gap over the past 20 years would provide an additional $2.7 trillion, if you closed that gap. Access to credit, housing credit, 700 and some odd 1,000 Black homeowners over the last 20 years, $200 billion-plus to the GDP.
Access to higher education, $100 billion. Providing lending and capital to Black entrepreneurs, $13 trillion. If you scale those numbers as they have been scaled, look at the impact of it, and let's look at the four pillars of systemic racism. Education, economics, healthcare, and the criminal justice system.
If we had access to economics and access to better education, we could've closed the gaps. Home ownership happens to be the foundation for much of what we think about when it comes to wealth. Black ownership, and that is as we think about our own individual wealth. If you think about Black ownership, homes, the median amount of housing for a Black family is $124,000. The median amount for white families is $200,000.
If you think about how systemic this has been, I look at what has occurred between 1934 and 1968 [when] 98 percent, 98 percent of home loans approved by the federal government were given to White applicants. Now project that forward. Looking at the disconnect between Black wealth and white wealth, we must begin to address these systemically.
Johnson: Thank you. Thank you for sharing that. The Ts that you threw out, meaning trillions, is just astounding. Just astounding. Raphael, your thoughts.
Bostic: Ray covered a whole lot there. I guess just what I would say is two things on top of that. One is that this is a long-term issue. The problems that we have, we're facing today and the exacerbation of this—they're not going to resolve overnight.
For me, I think the four Ps, the four areas, those pillars of structural racism are ones that are exactly the right ones to think about. I was going to talk again about capital and how it flows into minority neighborhoods, into minority families, and that entrepreneurship in small business is incredibly important.
Thinking hard about how do we get more capital to people so that they can be more effective in that entrepreneurship and our society is something that's very important. I really appreciate Citibank with their announcement yesterday and their commitment to providing capital to African American small businesses; it's incredibly important. That's the type of investment we'll need to see moving forward.
I also think, though, that it's going to be very important that we do a lot in the area of financial literacy to make sure that every dollar that exists in African American communities is used as effectively as possible. When you don't have that much, every dollar that doesn't work for you is even more important, so we need to make sure that we prevent predatory activities; and we make sure that people in our communities really do appreciate and understand what opportunity looks like, and also understand that there's risk everywhere, and that we need to be thoughtful about how do we navigate that risk and move forward.
I think there's going to be multitargets. Our Bank, I'll tell you, we are taking this on in a number of directions. We do a lot on financial literacy and education. We are doing a lot right now on workforce development because building skills in our community for the jobs of tomorrow is going to be one way that we reduce the income trajectories, the uncertainty.
In African American communities, many times incomes are very unstable. That means that you're never able to really get firm footing and invest in the long term. We've got to change that. We're focused on that theme, those areas as well. I think we've got to think about our skills, that income becomes stable, and then we also have to make sure that there's a surrounding infrastructure so that capital flows and we really see growth.
Johnson: That's a great segue, Raphael, into the next question that I was going to ask, which relates to the financial ecosystem. There are a lot of megatrends going on, including consolidation in the industry, fintech, quite a number of dynamics.
Those dynamics have played out in a way that have also reduced the number of Black-owned, minority depository institutions, which play a huge role in the dissemination of that capital that you mentioned. Any thoughts on what we can do with the financial plumbing to make sure that that's working for everyone, but especially for minority communities? Raphael?
Bostic: I think I'm up. I think the first thing to really appreciate is that many people in African American communities have not had very positive experiences with the mainstream banking and financial systems. That has really colored a lot of what people are willing to do and what they're willing to trust.
I think about this even in the context of the pandemic today, where we have a need for African Americans to participate in the vaccine trials, they're reluctant to do so because of a history of abuse in testing in healthcare. That history of abuse is exactly the same thing that people feel when it comes to financial institutions.
That's why minority-owned banks are so important, because for so many communities, that has been that trusted source. I think it's really important that that continues to exist. At the same time, I think that we need to be thinking hard about really raising this issue with all banking institutions across the sector.
Let me just say one other thing. Mike and I actually, for those of you who don't know, have been learning about trends in banking and how consolidation and [inaudible]. It's really putting at risk banks that are now the mega-large. I think we all need to be thinking hard about how do we preserve them because they play a very special role in so many communities, certainly in African American and Latino communities, but also in rural places all across my district in the Southeast, where a lot of banking happens in small family run community-type banks. Many of those serve Black [inaudible] communities. We need to make sure they work as well and provide access to the set of services that makes [inaudible].
Johnson: I know we're committed to continue that work, as well. Ray, thoughts on the same topic but also I also saw the recent announcement from Citigroup. If you want to add how that came about within the difference that you as an organization hope to make through that, I think that would be a welcome conversation as well.
McGuire: Sure, thank you. What [Bostic] is outlining is so fundamental to how we begin to address these systemic inequities. The banking system, before I get to the banking, let me tell you what Citi is doing since Dr. Bostic referenced that.
Yesterday, we came out with an announcement of investing $1 billion in our action for racial equity, $1 billion. Five hundred fifty million [dollars] of that is going to go to support home ownership for people of color in affordable housing by minority developers. Three hundred fifty million [dollars] of that will support Black-owned business suppliers, fifty million [dollars] of that is going to invest in capital. One hundred million [dollars] of that will invest in minority depository institutions for their growth and revenue generation, and 100 million [dollars] of that will go to our foundation in grants to help change the agents addressing racial equity, all of which is critical, again, to this topic.
Let's focus a little bit on the minority depository institutions. In 2000, there were 41. Today there are 18, according to the latest statistics outlined by the FDIC. Of the 18, there's $5 billion in assets, $5 billion in assets. In the overall system, there are 5,000 banks with $21 trillion in assets, 5,000, $21 trillion, 18 with $5 billion, and that $5 billion in assets has remained constant since 2000. The number of banks has gone down; the number of assets remain constant.
The focus on these banks, which are in often otherwise financial deserts, is paramount to how we allocate capital to the communities. When we discuss the community and capital, there are three buckets that we need to include. One is capital, and capital is identified or defined as grants, low-interest loans, and equity capital.
The second has to be mentorship. Often, these entrepreneurs need just a little guidance, so how do we do that? The third is where they convene, because the entrepreneurs often need places to convene. The financial institutions can be the convening place. What do they need? They need at least two things. One, they need capital, so they need equity capital because they can only lend against a certain amount of their equity capital, and you referenced earlier, technology. They need to be able to compete in the world of technology, financial technology. They need to have systems and they need to be able to afford the systems so that their customers can access. They join the increasing population of the digitally literate.
As we focus on the issues of economics and equity, you have to start there because that can be one of the areas where all the community knows, and they're safe there. Safety is very important in this environment. They have relationships there, so there is a real opportunity for us to invest in these institutions to make certain that these institutions are strong and vibrant and can compete in the modern world technology, especially financial technology.
Johnson: Thank you for sharing that, Ray, and thank you for you and your organization's commitment. I'm going to ask a follow-up question to you if I may that's more on the, I'll say, personnel side. Development and growth of minorities in the roles of leadership in the financial services industry.
We have received a question about comments made by the CEO of Wells Fargo. This is not a conversation of one institution versus another, anything like that. I don't want us to go there, but your thoughts on the pipeline of talent, developing the pipeline of talent of minorities and maybe just kind of the general state of play, but also what can we do better and more in that process.
McGuire: I think it's important to put this in context. We're now in 2020. Sixty-five years ago in August of 1955, there were three things, at least three things that happened. There was a little Black boy, 14-year old named Emmett Till in August of 1955. In December of 1955, there was a woman named Rosa Parks. In 1955, we see the creation of the Fortune 500. Today, of the Fortune 500 CEOs, four are Black, having peaked at a number of 20 in 65 years.
Of the $70 trillion of assets under management, less than 1 percent is managed by Black folks. In New York City, 65 percent of the population being Black and brown, 3 percent of the contracts. At my alma mater, and to his credit the dean identified this, over the past 20 to 30 years, the number of African and African American students who are enrolled at Harvard Business School has remained constant at 50.
It's not for lack of talent; it's lack of opportunity, and so if you think about the basis of the systemic inequities—and it starts with education. Let's focus on the education system that then leads to higher educational attainment, that then leads to higher-paying jobs, that helps to reduce the gap.
If we invest in education, education now, I have to broadly define it. It is not only the traditional education for which we've been so fortunate to achieve, it is also workforce development and giving folks the opportunity whose skill set and interest may not be in traditional education [but] who still have enormous skills in which we're not investing where we can invest.
There's talent out there. Comments made by others—they have to rest on their own laurels or not, so I can't comment on that; but I can tell you there's talent out there, and we need to invest in the systems that can identify and develop and then recruit and continue to refine the skill set of that talent. It's all about opportunity.
Johnson: Thank you, thank you.
Bostic: Yeah, so Mike I agree with that, completely.
Johnson: Please go ahead, Raphael.
Bostic: I would say that for me ... Ray laid out that it is the art of over a lifetime how you get to a better place. You start off with a good school, [inaudible], and you're able to graduate and to get nurtured in the workplace and all that. The challenge we have today is I think there are a lot of people who have talent who have missed out on the first four steps, and now it's sort of how do we sort of rediscover that talent and give it opportunities to shine.
Our Bank for example, we're starting to ask the questions of when we put in requirements that are expected of our applicants, how many of those are real? If you require 25 years of experience, you're [inaudible] people unless they've had those prior four or five steps. I think that's an important thing to think about. I think at the end of the day, the thing that's the most important is intentionality and a desire on the part of leaders to make a difference in this and give it the type of prominence and intention that it actually deserves. If you don't, as I said before, these organizations will not perform as they might otherwise. You're leaving talent on the sidelines, you're leaving a tip on the table, and you need to find ways to tap into that and leverage it so that your group, your organization can be better and stronger and more innovative and creative.
For us, I go back to the essay. By not being intentional, we are all losing out. At $16 trillion or however you want to estimate it, it's real money. This is not $3 over the course of 50 years. It's something that's much more substantial, and it's really cost us all.
Johnson: Education, opportunity, intentionality are great, great points, everyone. We have a question that came in on modernization of the Community Reinvestment Act. I'm going to ask it a little bit broader. Again, we talked about education, opportunity, intentionality. Policy has to also play a role in that. Particularly from within the financial services industry, what can we do more from a policy perspective, whether that's CRA, whatever that may be? What can we do more in that space? Raphael, since that's kind of squarely within your bailiwick, why don't I start with you on that question?
Bostic: For me, I think first of all, we need to really lay out our values that opportunities should be supported, and we should treat people and businesses and proposals that have similar rich profiles similarly. That's the message we need to send from a regulatory perspective, anytime we need to ask questions. There needs to be a clear expectation and more of that treatment to be occurring in all the services that are being provided.
At the same time, I also think that there's some creativity, referring to creativity. We also say the CRA needs to be updated. We issued a proposal; I guess we announced the proposal we were making earlier this week because banking has changed. If our roles don't match how things actually happen, they're not going to serve the people that need to be served in-house.
We need to modernize the CRA, and I think talk about what do you do about internet banks that don't have branches anymore. How do we think about places that may have an abundance of branches so that investments there just may be coming and handling [crosstalk] when there are other places not that far away that don't have banks [but] have needs.
I think we need to be thinking about how we address all those things and provide incentives for capital to go where they need it. I think a lot about where do you get your most value-add. Is it an extra dollar where there's already been $1 million spent, or is it an extra dollar where there's been a $1,000 spend? We need to make sure that we're trying to get every value-added dollar that we can out of this. That's really the message that I think [inaudible] needs to give.
On that last point, creativity, meaning how we think about risk, I think is critical. As I've talked to our Sixth District, one thing that's been very clear [is that] every place is not the same, and so the same proposal in two different places may represent very different risks. We need to make sure that we are considering that, thinking about how we model that kind of advancement so that we don't leave some really good ideas on the sidelines that don't get to be realized. I think historically what we've seen is that in Black communities, the baseline level for everything used to be a whole lot higher, which means the hurdle you've got to get over to get that capital is just that much more difficult to step over.
Johnson: Thank you for that. Ray, if you wanted to chime in on that, feel free. We also had a number of questions about minority and Black banks, particularly on your thoughts about investments and deposits into those institutions and their role. You put out a lot of numbers and statistics so just in general, your thoughts on continuing to work for Black and minority banks.
McGuire: Well, listen, I can only say that they're fundamental. They're fundamental to the neighborhoods; and let me give you one prime example. A prime example is the [Paycheck Protection] Program under the Cares Act. Many of those institutions were the place to where the entrepreneurs in the neighborhood had to turn in order to get their PPP facilitated.
Many of these banks—we had Carver Bank here—it was [a] very supportive process. An enormous number of those [included] banks in Texas, many of the banks that are under the president's jurisdiction. In addition, in order to help facilitate that, we at Citibank saw $50 million worth of loans that were processed through the PPP led by one of our partners.
We have been invested. Our CFO, Mark Mason, was instrumental in the design of this billion-dollar investment focusing in large part on what takes place with the minority monetary institutions. We have to embrace the necessity, the vital necessity of these institutions in these communities. President Bostic said it so appropriately. This is the essence of what we do, and it's an integral part to the Fed system.
Johnson: Very, very well said. We could have this conversation all day long, but we are coming up on time. I'm going to ask one last question, which is a bit of a call to action. We've got a wide group of participants in the financial services industry. What would you ask them to do to help advance this conversation, help advance people's lives—particularly those in the minority, in African American community—develop that pipeline of talent. What's your parting call to action? Ray, how about we start with you?
McGuire: Listen, each of us has a role to play. I ask myself—maybe rhetorically, maybe not so much—but for George Floyd, would we be having these conversations? The country and the world saw eight minutes and 46 seconds of a murder, and as a result of that, we said, "we're better than this, and we need to make certain that we are focused on making a difference." What difference can we make individually, and what difference can we make collectively?
I'm encouraged by the response. I certainly want it to be a consistent and a sustained response. I'm also encouraged by the fact that conversations like this were being sponsored by President Bostic and the Atlanta Fed long before George Floyd, and so there are examples out there of leadership from which we all can learn and from which we all must be inspired, or at least develop the courage to address the problems, all of which are now in stark [inaudible]. There is no debate. There is no debate about where we are.
There certainly should be no debate about what each of us can do and what we can do collectively. None whatsoever. We have the capacity; we have the talent. We just need to exercise the courage.
Johnson: Raphael?
Bostic: I'm reluctant to go after that. We could just drop the mic and say we're done, right there. I'm thinking about three dimensions where we all can make a difference.
The first is internal for our own organization. Do we know what the facts are about our organizations? Are there policies and practices that are not promoting racial equity or are a barrier to that? What things can we do internally in things that we control to make sure that doesn't happen.
I know at our Bank, we do a lot of [inaudible], just to know what's happening in terms of promotion and hiring and pay. I've got a really clear signal if it's not happening across the board, and so that self-knowledge, that is very important.
A second thing I would say is in trying to be that model of behavior for others, and then yelling from the mountaintop about the behavior that you're doing. Making it hard for people to ignore the ways that we can do this the right way and make a difference.
I've talked to many leaders across the Sixth District who actually say they want to do the right thing, but they don't know what to do. We should make it hard for them to ever be able to say that. So when we see things that work, let's get up and yell about it. Then the third thing I think that is also very important, which I've seen so much more of in the last three or four months, is that we should talk to people and really just not in an accusatory way, but be real about what our reality is.
At our Bank, we've had so many conversations in the last couple months [inaudible] and other things where sort of my African-American staff members have just talked about the burdens they carry every day when they walk into the Bank because things have happened to them, things may have happened to them in real time, and they don't feel like they can talk about it. People don't know, and when they find out, it really changes their... I've experienced this, it changes their perspective on how the world is working and what their obligation is.
I think that if we can really work to make our reality unknown an understood reality, not in a politicized way but just in a "these are the facts" way, I think we can build a broader coalition of people who actually understand, feel that it is an injustice and wrong, and are going to be willing to devote some of their own personal energy and capital to make a difference. Just by talking to people, I think that is a third way that we can really make some real headway in this and fuel our commitment to change.
McGuire: I'd like to amplify the last. We're so polarized. We all must come together. We all must come together. We cannot [inaudible] in a polarized, divided country. [inaudible], we don't go anywhere. Together we can go wherever it is, like Star Trek Adventures.
Johnson: Well those are great, great parting capstone comments to what has been a perfect conversation. I thought about the three Is to describe this: informative, insightful, and actually inspirational. I just want to thank you both, Raphael and Ray, for taking the time to have this conversation with us today. Ask everyone to give the virtual applause, whether it's in chat, or if you just want to stand up and clap in your own living room or wherever you may be today. Let's say thanks to Ray and Raphael. Very much appreciate it.
McGuire: Thank you.
Bostic: Thank you.
Johnson: A few comments to close out, as we have to with respect to the conference. Don't forget to join us tomorrow morning from 9 to 10 a.m. Central Time for a panel discussion on leading in a time of crisis. It's featuring our own at the Atlanta Fed's André Anderson, Joanne Kim, Mariel Arraiza, and Robert James.
We also want you to join our Minorities in Banking LinkedIn group. Stay connected to other conference attendees, features, and events. The link is posted in the chat. Feel free to start a conversation within that using the hashtag, #MinoritiesinBanking, and see what others share.
As you may know, this event is normally hosted at one of the reserve bank facilities. This is our first virtual event. We hope to be able to have this annual event in person, and I'm actually hoping maybe a combination of in-person and virtual so we can continue to leverage this broad attendance, but we hope to have it in person at the Federal Reserve Bank of Atlanta sometime in 2021, so look forward to that.
Following tomorrow's session, you'll receive a survey asking for feedback. Please let us know your thoughts on how we could bring weekly content developed for you and [how] we can get better and continue to have discussions and dialogue such as we had today.