Where are the banks? While Silicon Valley firms like Google, Netflix, Apple and Twitter, have denigrated Donald Trump's Friday executive order blocking refugees and barring citizens of Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen, from entering the U.S., banks have been silent. That's strange as some of their staff could be affected.
Graduates of some or Iran's top universities work on Wall Street. Goldman Sachs especially has several U.S.-based analysts and associates who've graduated from either Sharif University of Technology in Tehran or from the Iran University of Science and Technology. Goldman employs a technology analyst and software engineer from the the private Arab International University in Syria.
Goldman Sachs declined to comment on its reaction to the ban and has said nothing publicly. However, we understand that Lloyd Blankfein left a voicemail for all employees on Sunday evening which said the following:
"This is Lloyd. The President has issued an executive order that, generally, bans individuals from seven different countries from entering the United States and freezes the broader refugee program. This is not a policy we support, and I would note that it has already been challenged in federal court, and some of the order has been enjoined at least temporarily.
If the order were to become or remain effective, I recognize that there is potential for disruption to the firm, and especially to some of our people and their families. I want to assure all of you that we will work to minimize such disruption to the extent we can within the law and are focused on supporting our colleagues and their families who may be affected.
Let me close by quoting from our business principles: “For us to be successful, our men and women must reflect the diversity of the communities and cultures in which we operate. That means we must attract, retain and motivate people from many backgrounds and perspectives. Being diverse is not optional; it is what we must be." Now is a fitting time to reflect on those words and the principles that underlie them.”
Numerous ex-Goldmanites are working for the Trump administration, including Trump's treasury secretary Steve Mnuchin and the former Goldman COO Gary Cohn.
Wells Fargo, Bank of America Merrill Lynch, RBC Capital Markets and Deutsche Bank also employ graduates from Sharif University. None have made a public statement. Financial News reports that J.P. Morgan sent a private memo to its staff on Friday to say that it had an "unwavering commitment" to its staff, "all of whom have adhered to our country's immigration and employment processes."
Whilst the ban initially appeared to apply to all citizens of the countries concerned - including green card holders, Reince Priebus, the White House chief of staff, said on Sunday that green card holders would not be prevented from returning to the U.S. Naturalized U.S. citizens are also unaffected.
Nonetheless, banks might do well to speak out. When we spoke to him two years ago, Xanyar Kamangar, an Iranian-born director in Deutsche Bank's technology investment banking team described how he was working on five deals at once and flying in and out of the U.S. to visit clients."I was in Miami for two days last week and during the nine hour flight back, I was running the latter stages of a live deal. It was very challenging," Kamangar told us. It would be more challenging still if he had to spend hours at immigration. Kamangar has since quit Deutsche Bank for an Iranian private equity fund and was unavailable to speak, but there are several of Iranians in the City of London (mostly senior quants) who stand to be affected by Trump's ruling.
Banks aren't the only ones vilified for their silence in the face of the travel ban. Daily Beast columnist Daniel Gross pointed out that Blackstone's Steve Schwartzmann compared Obama's plan to hike taxes on capital to Nazis invading Poland, but that Schwartzmann has so far said nothing about Trump's new order.
Underlying the ban are worries that Steve Bannon the (also ex-Goldman banker), Breitbart founder and chief strategist to Trump is in the early stages of cracking down on legal U.S. immigrants in senior positions in the U.S. economy. During a 2015 radio interview, Bannon said he took a tougher line than Trump on the subject of talented immigrants and that, "when two thirds or three quarters of the CEOs in Silicon Valley are from South Asia or from Asia..." a country should be seen as more than an economy but as a "civic society."
With Bannon emerging as an important power in the new administration, this should have banks on high alert: as we've noted before, a significant proportion of Wall Street analyst classes are typically drawn from Asia (although students tend to have studied in the U.S first). Bloomberg reports that the Trump administration already has a draft proposal to restrict the number of H1-B Visas which enable banks to recruit overseas programmers for their growing technology functions.
Photo credit: pAAnorama. by Matt Hintsa is licensed under CC BY 2.0.