Wall Street has always been involved in politics even if bank bosses sometimes want to pretend disinterest. In the past, they were able to stick mainly to battles about tax and regulation. Now, it is ever harder to avoid the U.S. culture wars.
Citigroup Inc. Chief Executive Officer Jane Fraser has stuck her head highest above the parapet with vaccine mandates to combat Covid and pledges of support for female staff in states that are banning or criminalizing abortions.
Jamie Dimon at JPMorgan Chase & Co. wouldn’t answer the question directly on Bloomberg TV this week, but he did say the bank would always look after the health of its staff. His institution and Goldman Sachs Group Inc. are both discussing policies like Citigroup’s now that the Supreme Court appears set to overturn Roe V. Wade, Bloomberg reported.
Fraser told shareholders at their annual meeting last month that funding travel for abortions wasn’t political but meant to ensure equal healthcare for all staff wherever they live.
This isn’t the only area banks are getting caught in the cultural crossfire and being denounced as “woke” bogeymen. Policies around finance and payment for guns have already helped turn municipal bond sales into an unlikely battleground.
Texas passed laws last year to block banks from underwriting muni bonds if it deems their gun-sale policies restrictive. Other states are jumping on the bandwagon with copycat laws, including Arizona, Kentucky, Ohio and West Virginia, which is considering an additional bill to punish banks that discriminate against energy companies.
The muni market isn’t the biggest in the world, but it is significant. Texas is the third-biggest state for sales of long- and short-term bonds, commercial paper and municipal-backed corporate debt after California and New York, with more than $50 billion worth of sales in each of the past three years, more than 10% of all sales, according to Bloomberg data.
The law has upended debt sales since it came into effect last September: JPMorgan, for example, has gone from leading the league tables in 2020, to seeing its business cut in half last year and drying up almost entirely so far this year. Topping the Texas table instead is Royal Bank of Canada.
Citigroup’s involvement has also dropped dramatically, but a Texas legislator has still threatened further exclusion over its abortion policy. Republicans in Congress have called for all government contracts with Citi to be canceled, while Senator Marco Rubio of Florida wants to cut all tax breaks from “woke corporations.”
With the threat of commercial damage, why would CEOs like Fraser risk backlash with public pronouncements on contentious issues? She could ensure staff are protected without saying it aloud.