If You Ask Me: A Global Banker Reflects on Our Times

Wriston, Walter B.


South Africa


What's your opinion on U.S. companies doing business in South Africa?

The real question you're asking me is, should we make loans to South Africa? And would we do more harm than good if we pulled out? Well, we asked ourselves the same thing. To get the answers we put Vernon Jordan, head of the Urban League, and Frank Thomas, who was then head of the Bedford-Stuyvesant Redevelopment, but who's since been elected head of the Ford Foundation, on an airplane with Bill Spencer, the president of the bank. They went down there for eleven days, and they talked to everybody you could name.

They tore themselves apart, emotionally. They worked from early in the morning until late at night, and they came home tired, but convinced that if we pulled our investment out of South African enterprises, it would create massive unemployment, which wouldn't do anybody any good.

The course of action they recommended is to keep doing what we've been trying to do all along--that is, press against the outer limits of the law. For example, Citibank was the first foreign organization there to have a pension plan for blacks and whites. We have no segregated lobbies, lending offices, tellers' lines, or any of those things in Citibank. All of which is illegal. The same thing is now true of most other multinationals there.

The investment that we have down there isn't that large. Our total capital in the Union of South Africa is only around sixteen million. But the amount isn't the real issue. What matters is a human question--how do you get rid of a system that is totally unacceptable in the civilized world, without throwing the whole country into massive unemployment? That's a hard trick. As far as the financial impact of a pullout is concerned, I don't think it would amount to much, but the human impact would be devastating.

You've been asked many times why Citibank decided not to continue lending to the Government of South Africa and government-owned enterprises there. You've responded that it was purely an economic decision. Do you see any case where you wouldn't extend credit, even though it was profitable for you in the long run?

What we really said is that we evaluate the many factors that make up what we believe is a good credit risk. One of those factors is the political stability of the host country. Apartheid is a repugnant political system, for which no humane person has any praise whatsoever. That is a big negative factor in assessing credit risk. The positive side of their credit position is that diamonds and gold are relatively good exports.

If we were to base our lending decisions solely on the purity of political systems, I'm not sure we could justify every loan we make to New York City.

No one could construe that as a moral question.

Oh, yes, they could. You didn't talk to the pickets outside our door.

Question withdrawn.

The point is that everyone has his own moral book. If we get into the business of judging the world's value systems, we're in terrible trouble. Maybe we should never have lent to the City of Atlanta prior to Martin Luther King.

So the business of the bank is to be an economic intermediary, and not a moral intermediary.

That's right.

  • The document was created from a compilation of interviews and question and answer segments with Walter B. Wriston which was later compiled into "If You Ask Me: A Global Banker Reflects on Our Times" in 1980. The original speech is located in MS134.001.034.00018.
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 Title Page
If You Ask Me: A Global Banker Reflects on Our Times
I: Getting Down to Fundamentals
The Big Cop-out
You Can't Go Bail for Everyone
Risk Is What It's All About
II: Some Basic Ills of the Body Politic
Lincoln Wouldn't Have Made It
Unpredictable Is a Dangerous Country
The Pitfalls of Single-issue Politics
Expect To Get Zapped
The Perils of Legal Pollution
The Injustice of Our Tax System
Those Wonderful People Who Bring You Inflation
Stop the Presses
Silly Premises Lead to Nutty Conclusions
Easier Said Than Done
III: New York, New York
New York City Is Alive And Well
The Road Back
IV: Careers
Rx for Happiness
Good Forward Planning
Dull Job?
A Simple Matter of Survival
Making It at Citibank
What Fast Track?
No Hiding Place
V: Once Around the World Quickly
South Africa
China: A Matter of Timing
The Real Significance of Iran
Iran and the Money Markets
Fashions in Country-criticizing
VI: The Global Financial Scene
The Elusive Eurodollar
De Facto Payments Mechanism
Too Big To Move
The Foreign Exchange Game
They Can't Leave the System
Baskets of Money
Swiss Francs
The Value of a Dollar
Not a Loss Since 1897
A Rational View of LDC Loans
Free Trade Benefits Consumers
The Destructive Costs of Regulation
The Big Rip-off
A Real Entitlement
Can Regulations Prevent Bum Loans?
The Insidious Side of Controls
Competition in Regulation
VIII: The Shape of Things To Come
Not As Big As You Think
What Lobby?
Armageddon Is Late, as Usual
Some Simple Facts about Interest Rates
An Expensive Luxury
How Big Is Big?
What We Did Yesterday Won't Work Tomorrow
A Matter of Semantics
Unpredictable Is a Dangerous Country
Privacy: A Serious Problem
The Unseen Revolution
Things Are Going To Be Different
Take the Handcuffs off Everybody
The Gray Areas of Lending
No Mouse under the Rug
Thank God We Don't Have National Banking
Competition Keeps You Awake
Accounting for Loan Losses
Not a Utility
People Like It
Computer Frauds
Some Final Words on Responsibility
About the Author