global finance: presentation articles

What drove the rise of nationwide consumer finance in the late 20th century?

Banks' strategic manipulation of local (state-level) law, not just federal deregulation.

What critical event in 1981 reshaped consumer finance?

Citibank's relocation of its credit card business to South Dakota.

What was the impact of Citibank's relocation on state usury laws?

It forced a 'race to the bottom' in state usury laws.

What was the federal regulatory system like for banks before the 1980s?

Federal law banned interstate branching, and state usury laws capped interest rates, promoting stability but limiting bank growth.

What was the Marquette Decision (1978)?

The Supreme Court ruled that a national bank could 'export' the interest rate allowed by its home state to customers in other states.

What loophole did the Marquette Decision create?

A bank in a high-usury state could lend to consumers nationwide at its home state's rates.

What crisis did Citibank face in the late 1970s?

Soaring inflation and interest rates caused Citibank's cost of funds to exceed New York's usury cap, leading to massive losses.

Why did Citibank relocate to South Dakota?

South Dakota eliminated its usury ceiling to help local banks, allowing Citibank to charge uncapped interest rates.

What deal did Citibank strike with South Dakota?

Citibank agreed to move its card operation to Sioux Falls in exchange for jobs and investment.

What restrictions were placed on Citibank's operation in South Dakota?

The operation was restricted to a back-office role that could not compete for local deposits or customers.

What was the regulatory domino effect following Citibank's move?

Other states, like Delaware, repealed their usury laws to attract bank jobs, leading to forty-four states loosening or lifting usury laws by 1983.

What was the impact of financialization on consumer credit?

Banks could directly intermediate between volatile capital markets and consumers, causing consumer credit card debt to spiral out of control.

How much did consumer credit card debt increase by 2008?

It quintupled.

What shift occurred in political power due to the changes in consumer finance?

The politics of local job creation overwhelmed the politics of local consumer protection.

What did states become as a result of the changes in consumer finance?

States became 'on-shore' financial havens.

What were the high administrative costs associated with credit cards before the 1980s?

They limited bank growth and profitability.

What was the primary focus of credit card plans before the 1980s?

They were primarily local due to geographic confinement of banks.

What was the consequence of Citibank's aggressive national credit card network building?

It aimed to bypass geographic restrictions imposed by federal regulations.

What did the elimination of the usury ceiling in South Dakota aim to achieve?

It aimed to help local banks during an economic decline.

What was the overall effect of the rise of consumer finance on banks?

It allowed banks to expand their operations and increase profitability by circumventing state regulations.

What major issue does the article address regarding Black entrepreneurs?

The historical and ongoing marginalization of Black entrepreneurs and business leaders.

What are some racial barriers that Black entrepreneurs face in business?

Discrimination in funding, leadership opportunities, and overall recognition.

What percentage of Black-owned businesses were approved for loans between 2012 and 2017?

47% of Black-owned businesses.

What percentage of white-owned businesses were approved for loans during the same period?

75% of white-owned businesses.

What challenges do Black business owners face even when loans are approved?

Higher interest rates and stricter repayment terms.

How does the marginalization of Black entrepreneurs affect economic gaps?

It prevents them from growing their businesses and competing equally, creating economic disadvantages.

What does the article say about Black contributions to management?

They are often overlooked, despite their significant impact on company growth.

Who is considered the father of Black management?

Charles Clinton Spaulding.

Who is recognized as the mother of Black management?

Maggie Lena Walker.

What percentage of senior leadership positions in large U.S. corporations are held by Black managers?

Less than 4%.

What issue do Simone Phipps and Leon Prieto highlight regarding business education?

It presents a one-sided view of history, focusing mainly on white theorists and leaders.

What contributions of early Black entrepreneurs are often overlooked in education?

Their focus on cooperation, community, and shared success.

What is the impact of teaching a biased view of business history?

Students miss lessons on social responsibility, empathy, and collective progress.

What do the authors suggest is necessary for creating a fairer economy?

Changing what is taught in business education to include overlooked contributions.

Why is recognizing Black contributions to business important?

It reshapes success and teaches future leaders about profit with purpose.

What is the main argument of the article regarding the representation of Black leaders?

It is essential for a complete understanding of business history and leadership.

What does the term 'management' refer to in the context of the article?

Leadership, decision-making, and the overall organization of a business.

How does the article describe the impact of racism on Black entrepreneurs?

It shapes who has the power and resources to succeed in the global economy.

What is the significance of Black business leaders' contributions to capitalism?

They represent a vision of success that benefits the community, not just individuals.

What are the consequences of ignoring Black innovators in business education?

It limits the understanding of diverse leadership and capitalism.

What is the call to action presented in the article?

To recognize and include the contributions of Black entrepreneurs in business education.