You're listening to Bloomberg Business Week with Carol Messer and Tim Stenebeck on Bloomberg Radio.
First of all, just a little bit of a setup. Remember we caught up with Marcus Shaw, CEO at All Finance.
Yes, I will never forget because he gave me that phrase that I use all the time, which is you need to put your greed above your bias.
Yeah right, yeah, it makes so much sense. Well, and he is really specifically working on diversifying the All Finance space, and he talked about All Finance having their first graduating class of HBCU students who are now headed to the investment world. So all about diversifying the financial space. And that's where we get to our next guest. It's our regular Equality segment because JUNI is Equality Month. Harold Butler is City Group Global Markets, head of Diverse Financial Institutions Group,
joining us on site here at Bloomberg Headquarters. Although I will say that we try to delve into this all the time, I don't need a month to do it.
Yes, and I'm.
Looking forward to the time where I think it's really important, but that we don't have to talk about it because it's just done.
Wouldn't it be wonderful?
Why aren't we done already? I've been doing this a long time, Yes, and Matt's been.
Doing a long time.
And do you know what is funny?
I was reading there was a story today about the Supreme Court backing black congressional district and I think Alabama was in Alabama, Alabama, and I was thinking, how insane is it that we still have to deal with this kind of crap. If somebody a hundred years ago had read that headline, they would have been like, seriously, they haven't dealt with the racial problems in America yet.
Seriously. Yeah, I mean exactly.
It's just unbelievable.
The right to vote, other things. Absolutely, I agree with you.
What's wrong with society?
You know, if I had a crystal ball, I could probably give you that answer, right.
I think people need to relax. Quite frankly, what does that mean? What do you mean? I think people?
I actually think folks are very uptight right in the US and general. And it's not necessarily just a financial markets. You know, I'll give you an example. You know, when you go my very first time to Europe, I had the pleasure of serving in the US Army and I got stationed at NATO's SUBPEC.
And when I landed, and this is back several years ago, it was how many years? A long time?
And when I landed in Belgium, I went to the installation and I said, well, where.
Is everybody this?
Oh, it's sies the time where people are taking the lunch and taking a break so they can reset themselves for today, right, and communicy families or whatever. And then they come back to work and to work a couple of hours, and they're much more effective.
And I said, what's wrong with this picture?
I'm in, I'm in.
I want to join that too.
We said that about Germany, right, that there was more balance.
I mean, you know what because of the social system, because of the safety nets. I think also, you know, people aren't as worried about how am I going to pay for if I have an accident, how I pay for health care? If I get fired, how am I going to afford to pay my restaurant? Because there are so many more safety nets. And as a result, I think they need to use them less.
To be honest, now I get it, they get you're not worried about it.
So if we relax, Yes, I like to relax.
Why do you think how can that improve the situation in terms of diversification. We I'm tired of hearing I love you, Mackenzie, but tired of hearing about the studies. I get it. It's better to be diversified. And there's a bottom line financial component to it. So tell me if we relax, how does that make things better?
Well, I mean, let's use the financial component. Right. So, like you, I.
Am oftentimes mind boggled at the same conversation around you know, why are we doing what we're doing?
Right?
Just recently, in fact, I was asked, so, why are we having the same conversation about equity?
Yeah, why are we still having this conversation?
And you know, without having to go into a history lesson which sometimes I don't mind doing. Right, uh, and and really helping that individual ask me the question to talk about helping them to understand why things.
Are the way they are.
I said, let's let's refocus your question and you ask yourself, right, if if the shoe were on the other foot, what how would it be different for you?
Right?
And when I say the shoe of being on the other foot, you know he's talking about in this case, I'm kind of tired of hearing about diverse and equity and all this kind of stuff.
No, no, no, I'm just saying, why isn't it done right?
That's just the whole point is that I think, I think we and I hope this is where we're going now.
Right.
Much of the work that's been done, certainly past the horrific events that took place several years ago. There's a lot of corporations that have come into the space that are putting capital in the space. George Murder, George Floyd.
The conversation shifted dramatically.
Dramatically, right yet and yet I think I think progress is happening, But yet we're not there yet, right. And I think it's because it continues to be a difficult conversation for people to have. I think people some people don't really understand steal the what or what needs to happen. And I think some folks just get for clint about the level of commitment that they need to make right.
We over a.
Lot of times financial institutions in general, because it's the nature of how we do business. You know, we think about it a lot, right, We put do you think about risk and we think about this, and we think about that, and all.
This out of time. The trader's got to pull the button and make the trade.
You got to do it right. If we weren't on UH Radio, Live radio. I have a nice little term for.
Them, but it's probably it sounds like we got to get off the pot. I mean, really what we need to do.
I think also it's just it's so hard for people to over come their biases. When Marcus Shaw came on and he gave us this term, you need to put your greed over your biases, because his point was, if you have that kind of diversity, you're going to be able to generate more revenue, better margins. You're going to be able to make money. And that's what we all want to do, we all want ostensibly, right.
So bias is that strong that people will give up making money.
Let's talk about black banks versus sure, because you said sometimes you don't mind giving people a history lesson, and I think people need that. Here there are historically black banks. Are they still in operational the same sort of scale that they once were?
Well, you know, since reconstruction, the black banks that are in existence today, about seventeen of them, So that's not a big number across the country, probably have more capital than they ever ever had. Right the number of years prior to these events that we've talked about, such as the murder George Bloyd and how the whole industry sort of change, it was a tough world, right, and it's still tough, but it is changing because the banks do
have capital. Prior to you know, there wasn't capital to do things right, and so people oftentimes ask me, well, how come there are black financial institutions that have been around for one hundred years and they remain under a billion dollars.
In assets for example, right?
And then I like to say to the history lesson things, I said, well, if you were denied capital markets, if you couldn't play in the capital markets, you'd be the same way, right, because it's a vicious cycle, right, And if you don't have access to capital, you don't grow, right, And if you don't grow, you cannot offer the communities that you serve services and things like that.
So you know, it has been a I think it's exponential.
It does if if they're able to lend out and you keep going, it's.
Just that's right, That's right.
So what can be done about it? You are at city, can you do you work with them? Or are you competitors?
Definitely not competitors.
Right, so we've taken we're well, we're not that I'm gigantic waistline maybe a little bit, but you're what.
We considered one of the big banks.
Well, we are a big bank, right, and I'm thankful we're a big bank because we're able to do things in a unique way and we're the first. Really maybe you didn't know this, I'm so I'm happy to tell you this. We're the only bank still on the street, the first to actually create a dedicated business unit, the Verse Financial Institutions group. This focused at the minority deposit institution are to include broker dealers and asset managers because
they're part of the equation as well. Absolutely right, And so our mission, our focus really has been to get to communities underrepresented, right, under invested communities through these financial institutions in a way that you know, we can help those banks attract investment to a community, to get rid of food deserts, which helps people eat more healthy so they don't go to the doctor. And you know as much, and it's you said earlier.
It's a vicious cycle.
Yeah, all those things that keep people from moving ahead financially as well as just kind of personally.
Stay in touch.
Let's know how things are.
I'm happy to stay in touch. I got so much to talk about. You.
If you have me back, we can have all kinds of fun talking about this week.
We will definitely have you back. Thank you for coming in. Thank you for your service.
Thank you very kind. By the way, thank you.
Waistline is just fine.
I'm just okay. I appreciate that.
Harold Butler, who's Global Markets head of Diverse Financial Institutions Group at City Group