Lex: Bank chiefs should not shame staff back to offices


This article is an on-site version of The Lex Newsletter. Lex is a premium daily commentary service from the Financial Times.

Dear readers,

Is it 1995 in the Big Apple? The chief executives of big banks have a swagger that hearkens back to an era when they were unofficial spokesmen for New York City and no one worried about capital buffers. Their pet cause these days: shaming employees who feel less pumped up about returning to the office than they do.

Earlier this week, James Gorman, chief of Morgan Stanley, said: “If you want to get paid New York rates, you work in New York.” He added that if restaurants were filled with diners, offices should be similarly stocked with employees.

A few months ago, JPMorgan Chase’s Jamie Dimon said workers who wanted to “hustle” needed to be in the building. And David Solomon of Goldman Sachs reportedly grew irritated when a junior banker approached him at a Hamptons restaurant during a weekday. What was Solomon doing there himself, exactly?

Wall Street’s chieftains may have a point about the value of staff gathering in person. It supports a common culture and is essential to training young workers.

But the tone of chiefs is too often arrogant and unseemly. None of them are riding crowded public transportation from distant suburbs or struggling to secure child care. Tough-guy bravado is evidently back in fashion, thanks to the soaring value of bank stocks.

In the 1990s, New Yorkers elected Rudolph Giuliani who ran a campaign pledging to halt out-of-control street crime in Gotham. He relied on the “broken windows” theory that when small misdemeanours are tolerated, they spawn bigger ones. Crime levels dropped.

They have picked up since the pandemic, animating the race to be the official rather than self-appointed leader of New York. The mayoral election takes place on Tuesday next week. Public safety, according to opinion polls, is the top issue after a series of high-profile crimes. Those have understandably disturbed New Yorkers. But the data show how safe the city has become in recent years. There is simply no comparison with three decades ago.

According to the latest figures, murders in New York are up 12 per cent. But for the seven major crime categories in aggregate, complaints are down slightly from 2019, almost 14 per cent lower from 2010 and a whopping 80 per cent down from 1993.

In 1990, there were more than 2,200 murders in the five boroughs. In 2017, there were fewer than 300. Even in pandemic-inflamed 2020, there were just 468.

Naturally, humans perceive rates of change more than absolute levels. The question remains whether current crime trends are merely a blip capturing an aberration or the front end of a steepening curve.

New York City had, a few years ago, abandoned the “stop-and-frisk” interrogation tactic and crime continued to plummet. But the increasing calls for more aggressive policing comes awkwardly just as America has slowly begun to appreciate the costs of over-policing.

Maybe those bank chiefs are part of the solution? My hope is that as New York returns to life, which is happening quickly this summer, the uptick in violence will abate. Workers coming back to their Manhattan offices and newcomers renting in Brooklyn and Queens can be part of the energy that keeps New York alive and safe.

Wall Street bosses should lead staff back to their offices in a spirit of camaraderie rather than recrimination. They need to listen to the worries of those lower down the corporate ladder, who are exposed to high living costs, long commutes and childcare problems.

The tailing-off of the pandemic is a good moment to address New York’s broader inequities. If bank bosses really want to show leadership, they should use their public positions to float solutions.

Enjoy the rest of your week.

© Financial Times

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