Oct 27, 2022 - Podcasts

Holding banks to their racial justice promises

Since the 2020 murder of George Floyd, companies and banks have pledged to do better when it comes to racial justice. So how are they doing?

  • Plus, the U.S.-mediated deal between Israel and Lebanon.
  • And, what to know about staying healthy this winter.

Guest: Axios' Barak Ravid and Adriel Bettelheim, and The New York Times' Emily Flitter.

Credits: Axios Today is produced by Emiy Peck, Niala Boodhoo, Sara Kehaulani Goo, Alexandra Botti, Fonda Mwangi, Robin Linn and Alex Sugiura. Music is composed by Evan Viola. You can reach us at [email protected]. You can text questions, comments and story ideas to Niala as a text or voice memo to 202-918-4893.

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Note: We asked J.P. Morgan for comment on our story, and they told us that in response to Emily Flitter's reporting they have made efforts to improve internal culture, revamping policies around diversity and inclusion. And this week a bank spokesperson also told the New York Times that J.P. Morgan "has committed to making sustainable, long-term systemic change to help close the racial wealth gap and fight racial inequality. We are tracking investments and initiatives to ensure they are making a significant impact.”


EMILY PECK: Good morning! Welcome to Axios Today!

It’s Thursday, October 27th.

I’m Emily Peck in for Niala Boodhoo.

Today: holding banks to their racial justice promises. Plus, what to know about staying healthy this winter. But first: the US-mediated deal between Israel and Lebanon. That’s today’s One Big Thing.

EMILY: After more than a decade of US diplomatic efforts, Israel and Lebanon today sign a historic agreement which is expected to reduce the threat of a regional war. This deal between Israel and Lebanon, two staunch enemies who are actually still at war, will allow the beginning of natural gas exploration in a disputed area of the Eastern Mediterranean Sea. Axios’ Barack Ravid has been covering this deal and is here with the big picture.

Barack, how did this happen and why did it finally close?

BARAK RAVID: Yeah, so actually this is a pretty cool story. For 10 years, the United States have been trying to get a deal on the maritime border between Israel and Lebanon, and the main issue here was when they started it, they said well, there's a potential for natural gas in the Eastern Mediterranean and in this disputed area between those two countries. So we need to delineate this border in order for companies to come and start gas exploration and then we'll see maybe we’ll have, like, tons of money, money that Lebanon really needs. And as the years went by the economic situation, Lebanon became worse and worse and worse and worse until the country is on a brink of collapse. So for the Lebanese, this is quite huge news because it's sort of a hope for some recovery of their economy. Even though, all in all, we're not talking about like, you know, huge sums of money or of revenue. The assessments say that it's something like, you know, $3 billion in revenue from this whole potential gas field. But it's not only the money.

EMILY: Israel and Lebanon are at war, but have figured out a way to negotiate an agreement over natural gas exploration from which they will both benefit financially, but they're still at war?

BARAK: Exactly and there are more than 100,000 rockets aimed at Israel from Lebanon. There are thousands of Israeli troops ready to invade Lebanon, at any minute. And still those two countries managed to get this deal when they were at war. It's not that they're signing a peace deal. They are still at war and they are signing a deal to delineate a border. It's, I think, it's very historic and interesting. But it's very easy to get the situation of a miscalculation that would lead to another war. And I think that this deal dramatically reduced the threat of a potential war, regional war that will get other players to join. Iran will join. It will be a disaster. The threat of a war, it's not off the table, but it's quite significantly reduced.

EMILY: The Israeli president, Isaac Herzog, met with Biden at the White House yesterday. What was that meeting about?

BARAK: The most important thing of this meeting is the timing. We are less than a week before the Israeli people vote in an election, again, for the fifth time in three years. I think that the White House wanted to get, you know, to feel the pulse from President Herzog, and most chances are that neither Prime Minister Lapid, nor the head of opposition, Netanyahu, will have a majority that will allow them to form a coalition. Herzog will have even bigger role in trying to untangle this deep political crisis that we're in for more than three years now.

EMILY: Thank you so much. Barak Ravid is Axios’ Contributing Correspondent based in Tel Aviv.

BARAK: Thank you, Emily.

EMILY: In a moment, checking in on efforts to combat racism in banking.


Holding banks to their racial justice promises

EMILY PECK: Welcome back to Axios Today. I'm Emily Peck. Since the 2020 murder of George Floyd, companies and banks have pledged to do better when it comes to racial justice. So how are they doing?

New York Times Finance reporter Emily Flitter recently checked in on JP Morgan's $30 billion commitment to help close the racial wealth gap. She also has a new book out. It's called The White Wall, How Big Finance Bankrupts Black America. Hi, Emily.


EMILY PECK: Two years ago JP Morgan pledged to invest 30 billion to address some of the largest drivers of the racial wealth gap. What did this mean in practice?

EMILY FLITTER: First of all, that was a pledge that was made without stated, explicit observations about what was really causing the wealth gap. So they pledged some activities, mostly for-profit business that JP Morgan already does. And they pledged to marginally increase some of the activities in different categories, and count that toward an effort to address systemic racism and the racial wealth gap.

EMILY PECK: And you write the things that they pledge to do fall into the”win-win” category where the bank is gonna benefit just as much as the people it seeks to benefit.

EMILY FLITTER: That's right. I mean there's no change in their basic drive to earn a profit and keep their expenses as low as possible. Just as an example of something that they could have done that they didn't, they could have started offering mortgages that they currently don't offer because those mortgages are expensive to make and not very profitable.

EMILY PECK: And they are doing some stuff around lending to more Black and Latinx borrowers. Is that right?

EMILY FLITTER: That's true. They did increase their overall proportion of loans to Black borrowers compared to total borrowers. But there are entire categories of mortgages like FHA insured mortgages that they don't offer and didn't start offering after stopping that.

EMILY PECK: Emily, the racial wealth gap is a result of so many factors. I mean, the banks played a role, but so did public policy?

EMILY FLITTER: Absolutely. I'm not saying JP Morgan should, you know, define the racial wealth gap and then seek to entirely close it alone. But, my purpose for writing the book was to point out just how much of a role these institutions, including JP Morgan, are still playing in keeping the wealth gap wide. I have seen leaked emails that show bank tellers treating black customers with great suspicion from the minute they walk into banks. That's just the tiniest beginning of what happens when you're black and you try to deal with these financial institutions.

And so if they really wanna fix this, they first need to take a look at themselves, admit things that big companies never wanna admit these days because it opens them up to all kinds of legal liabilities and then really change.

EMILY PECK: Emily's new book is The White Wall. Emily Flitter. Thank you so much.

EMILY FLITTER: Thank you, Emily.

EMILY: We asked JP Morgan for comment on all this, and they told us that in response to Emily Flitter's reporting, they have made efforts to improve internal culture, revamping policies around diversity and inclusion; and that it's an issue they're continually working on. For more, check out our show notes.

What to know about staying healthy this winter

EMILY: So we've told you on the show that this year's flu and cold season started early and with a vengeance. How much could some of the covid precautions like masks help keep us healthy this winter? Axios’ Senior Healthcare Editor Adriel Bettelheim has a few things to know.

ADRIEL BETTELHEIM: Well, I think the public health experts would say definitely masks and social distancing and all the things we've been talking about, you know, the previous two winters, are important. And there's a prospect of a tripledemic – covid, RSV and flu. They have somewhat similar cold-like symptoms, at least presenting. So masks, social distancing still works if anyone wants to embrace it. The viruses, as we said, are respiratory. So there was initially during the pandemic, this feeling that a lot of covid could be spread by touching surfaces that an infected person touched.

Well, it turned out the transmissibility was not as worrisome as as originally portrayed. But, you know, when you're in a tight environment with an infected person, I'm not sure it really matters. Like in a daycare center, whether it's being aerosolized or whether somebody sneezes on the surface and then you touch it. There's all sorts of possibilities. There's always the risk of that. So, washing your hands, cleaning surfaces, especially with lots of people indoors and in closed spaces, is just always a good idea.

EMILY: Axios’ Adriel Bettelheim. Thank you so much.

ADRIEL: Nice to be with you.

EMILY: And that’s all for today. I’m Emily Peck in for Niala Boodhoo - thanks for listening - stay safe and we’ll see you back here tomorrow morning.

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