Listen to this article

On Wednesday, the CEO of the Bank of America Brian Moynihan said, “Capitalism is the best way to solve the challenges that are facing society. We at Bank of America believe in capitalism, and it’s the best way to solve the challenges that are facing society, we operate by delivering great returns for our shareholders and delivering for society. We call that responsible growth”. Senator Pat Toomey also asked questions about the importance of capitalism and shareholder capitalism versus stakeholder capitalism, from CEOs of Wells Fargo, JPMorgan, Goldman Sachs, Citigroup, Bank of America, and Morgan Stanley. Toomey said, “Thanks to capitalism, life is better for the vast majority of Americans today than it’s ever been. In fact, just before COVID, we had the best economy of my lifetime as measured by the very metrics my Democratic colleagues believe are very important”.

Point to be noted that Toomey is ranking member of the committee. He delivered his words in his opening statement and said, “That’s why I’m surprised and troubled to see, some bank leaders have embraced so-called stakeholder capitalism, which really diminishes the primacy of shareholders in our economy”. He added that he believes stakeholder capitalism encourages large corporations to pursue a social agenda, instead of a responsibility to their owners. Moreover, Toomey later got the CEOs of all six banks present at the hearing to voice their support for capitalism as the best economic system to promote prosperity. He said that the principles of stakeholder capitalism are embedded in Bank of America’s responsible growth initiative. The testimony says, “As a financial institution, our success has always been tied to the success of the communities and markets we serve”.

It added, “And we know from our own research that companies that focus on environmental, social, and governance issues tend to perform better over time than companies that do not”. It is noteworthy that Moynihan’s 2021 letter to shareholders said, “The bank is committed delivering for its clients, employees, communities, and shareholders while also doing its part to deliver progress against society’s biggest challenges”. The letter also said, “This includes our work to support the health and safety of our teammates, the many ways we help the communities we serve grow and prosper our efforts to promote racial equality and economic opportunity and our ongoing drive toward a clean energy future”.