Perspectives 2020-2021 Public Sector

Citi Perspectives for the Public Sector 34 35 D uring 2020, the world has been challenged by a global pandemic, the likes of which we have not seen for over a century. While all nations have suffered greatly from the virus, the U.S. has been particularly hard hit, with some of the fastest and largest increases in daily transmissions in the world. COVID-19 has disproportionality affected Blacks and People of Color, most likely due to more limited access to quality and affordable healthcare. Exacerbating the ongoing racial disparities of this health crisis are underlying inequalities in education, access to financial products and wealth generation and the slow pace of criminal justice reform. Calls to address these inequalities reached a crescendo in July following the death of George Floyd, an unarmed Black man, whose death at the hands of police was captured on video and ignited global protests. Across multiple sectors, corporates have responded boldly by looking inward at their own business and corporate social responsibility practices. Importantly, they have sought ways to create greater opportunities for People of Color and women. The financial industry in particular has a special responsibility to act on issues of racial and gender equity to create a fair and inclusive society; it plays a pivotal role in the economy and is uniquely capable of helping to close the gaps that exist. According to the recently published Citi GPS report, Closing the Racial Inequality Gaps , if the U.S. had closed key racial gaps for Black Americans in wages, housing, education and investment 20 years ago, up to $16 trillion might have been added to the U.S. economy. If these gaps are closed today, up to $5 trillion could be added to U.S. GDP over the next five years. These figures vividly illustrate the need for increased wealth generation within Black and minority communities In Congress and within other areas of the U.S. Federal Government, there have been growing calls for large financial institutions to provide greater support to minority communities by helping Black and women-owned community banks. The need is urgent: the number of these institutions continue to shrink. The Federal Deposit Insurance Corporation, a U.S. regulator, has noted that the total number of banks it insures has declined by 45% since 2001, while the number of Black-owned banks has declined by 56% over the same time. COVID-19 threatens to exacerbate this trend. Only by surviving can minority depositary institutions (MDIs) continue to address the needs of their underserved communities and help speed up the U.S. economic recovery. Using the Banking Sector to Bring Opportunity to All The financial industry in particular has a special responsibility to act on issues of racial and gender equity to create a fair and inclusive society; it plays a pivotal role in the economy and is uniquely capable of helping to close the gaps that exist. 34 Using the Banking Sector to Bring Opportunity to All Harold Butler North America Public Sector Group, Citi