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The Federal Deposit Insurance Corporation has a “misogynistic” and “insular” workplace whose head, Martin Gruenberg, may not be well suited to lead needed reforms, says a new report commissioned over complaints about widespread sexual harassment inside the US banking regulator.

The FDIC, which has almost 6,000 staff, commissioned the independent report late last year in response to press accounts of harassment and discrimination against female employees.

The report released on Tuesday described an organisation with deeply rooted problems, calling it a “good ol’ boys club where favouritism is common, wagons are circled around managers, and senior executives with well-known reputations for pursuing romantic relations with subordinates enjoy long careers without any apparent consequence”.

Gruenberg, who has served at the agency for most of the past two decades, including 10 out of the last 13 years as chair, came in for criticism as an angry boss who must change his own behaviour in order to fix the agency.

As recently as 2023, the report said, FDIC employees had experienced Gruenberg “lose his temper and express anger in ways that they felt were offensive and inappropriate”.

The subjects of the ire “left these meetings feeling verbally attacked personally and in an unfair manner”.

The report said that the given the duration of Gruenberg’s time at the top, as well as allegations about his temper “may hinder his ability to establish trust and confidence in leading meaningful culture change, and so too may his apparent inability or unwillingness to recognise how others experience certain difficult interactions with him.”

The report added: “For these challenges to be overcome, there must at least be a genuine and sustained commitment to lead a culture change, accompanied by a recognition and acknowledgment that such change is necessary because of failings of the past, including his own.”

A person close to the FDIC’s management, said the board has not held discussions as to whether Gruenberg should step down. The person was unaware of any dismissals tied to the report.

The report, produced by law firm Cleary Gottlieb, lifts the lid on widespread reports of sexual and racial harassment at the regulator and detailed fears of retribution among staffers who spoke out. The report was based on conversations with more than 500 current and former employees.

Gruenberg apologised to staff in an internal memo on Tuesday, describing the report as “sobering”.

He said the agency would take the report’s recommendations, including moving forward on appointing an internal person to lead the culture transition, and an outside auditor of progress.

“Hundreds of our colleagues reported painful experiences of mistreatment and feelings of fear, anger, and sadness,” Gruenberg wrote. “I accept the findings and recommendations of this report and thank the special review committee for their exhaustive work.”

He flagged the FDIC had taken action to begin addressing some of the complaints raised — providing more support to victims, in-person training for all of its employees, strengthening procedures for reporting, and improving accountability for anyone who is found to engage in misconduct.

“We will spare no effort to create a workplace where every employee feels safe, valued, and respected,” the chair said.

An Eagle Scout Award is seen pinned to a uniform. After a lengthy sex-abuse scandal and bankruptcy, the Boy Scouts are changing their name to Scouting America.

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David Ryder/Getty Images

An Eagle Scout Award is seen pinned to a uniform. After a lengthy sex-abuse scandal and bankruptcy, the Boy Scouts are changing their name to Scouting America.

David Ryder/Getty Images

After being embroiled in a sex-abuse scandal, the Boy Scouts are changing their name. The 114-year old organization known as BSA or Boy Scouts of America will be rebranding as Scouting America early next year.

Boy Scouts of America President Roger Krone announced Tuesday that the name change is part of an evolution as the organization seeks to ensure that everyone feels welcome.

“We are an organization for all. It’s time our name reflects that,” Krone said during a virtual news conference during its annual meeting in Florida.

“Scouting under the name Scouting America will enable us to chart a course towards continued growth, relevance and impact.”

Five years ago, the Boy Scouts opened its programs to girls after allowing LGBTQ youth in 2013, and gay scout leaders in 2015.

“We want to make sure that all youth in America understand that they are welcome in our organization, that this is a safe place for them to learn and grow and to be their authentic self,” said Krone.

The Irving, Texas-based organization emerged from bankruptcy last year after facing more than 82,000 lawsuits from people sexually assaulted by scout leaders as children.

“I think it’s time that we have a game that reflects the youth that we serve today and frankly, the youth that we want to welcome in the future as part of our post-bankruptcy plan for scouting,” said Krone.

The organization, founded in 1910, had been targeted by sexual predators from its earliest days. The Scouts began keeping a secret list of accused predators back in 1919, but the national organization didn’t share the information with local chapters so suspected sexual predators could move from troop to troop.

“It institutionalized child molestation,” former scout Frank Spinelli told NPR in 2021. He was sexually assaulted for 3 years by a scoutmaster starting when he was ten years old. “It’s protected these perpetrators.”

Last year, BSA established a $2.4 billion fund to settle the flood of claims from sex abuse victims.

The Boy Scouts had more than 2 million members in 2018, but currently serves a little over a million youth with 176,234 girls.

“There’s nothing about scouting that is inherently masculine or inherently feminine,” said Bob Brady, scoutmaster of Troop 1150, an all-girls’ BSA troop in New Jersey.

“The name change is exactly what I would advocate,” said Scouts BSA Program Chair Angie Minett, the first woman to hold the position. “The most important message that people need to understand is that it’s [scouting] for everybody.

The announcement is drawing criticism from conservatives.

“The Left has now taken “Boy” out of “Boy Scouts,” Republican U.S. Representative Andrew Clyde of Georgia said on X, formerly known as Twitter. “Wokeness destroys everything it touches.”

The new name, Scouting America, will go into effect next February on the organization’s 115^th anniversary.

Welcome to Trade Secrets. Last week Olaf Scholz was in Beijing; this week Xi Jinping is in the EU, stress-testing EU unity and particularly the Franco-German relationship. Today I’ll make a couple of observations on that score and then Thursday’s Trade Secrets column will look in detail at Brussels’ apparent new get-tough regime towards Chinese companies in Europe. The rest of today’s newsletter is an author Q&A on the new book by former Australian trade negotiator and Trade Secrets favourite Dmitry Grozoubinski, a rare exception to the rule that nothing interesting on trade ever comes out of Geneva. Charted Waters is on China’s currency.

Xi loves EU, yeah, yeah, yeah?

The dynamics around Xi Jinping’s visit to the EU aren’t exactly difficult to make out. It’s clear from Olaf Scholz’s muted rhetoric during his trip to China last month that Germany’s dependence on the Chinese market still restrains Berlin from regarding China as a full-on economic competitor, let alone a strategic rival.

Emmanuel Macron, whom Xi met yesterday, gives off a more combative air, and is trying to stop China from driving a wedge between France and Germany. The French president’s recent speech at the Sorbonne (here in translation) set out a strategy aiming to operationalise “strategic autonomy”, a concept the EU invented in 2020 and has been trying to define ever since, with much more interventionist trade and industrial policy to create European industries and actively to manage supply chains.

But though Macron’s vision sounds cohesive, it will struggle not just with Germany’s continued reliance on the Chinese market but a lack of trust elsewhere in the EU. For one, Macron has a history of lurching back and forth on China. It’s not just his notorious comments on Taiwan after his trip to China last year but also a sudden last-minute switch to support the doomed Comprehensive Agreement on Investment deal with Beijing in 2020, reportedly because some trade and investment goodies were dangled in front of France to get it to shift.

The immediate deliverable of yesterday’s Macron-Xi meeting was for China to hold off on retaliatory tariffs on cognac, another France-specific concession. (Meanwhile, Scholz’s trip to Beijing apparently won him some favours on German exports of beef, pork and apples: the Chinese approach to buying off trading partners’ discontent really isn’t subtle.)

This feeds the old suspicion, fair or not, that France’s EU-wide solutions reflect its own interests. It’s less a strategic vision of the EU car industry that caused France privately to push for the investigation into subsidies for electric vehicle imports than French carmakers suffering more than their German counterparts from Chinese competition.

One of France’s previous attempts to create a pan-EU industrial policy through a sovereignty fund essentially fizzled out, again partly because of a belief elsewhere in the EU that here was Paris wanting to bail out French companies again. Macron has identified pressing issues with an overarching analysis and proposed some solutions. But France unfortunately isn’t the best country to be pushing them, at least unless Macron can convince Scholz to embrace his vision as well.

Lying trade lies and the lying pols who tell them

Dmitry Grozoubinski’s “Why Politicians Lie About Trade” comes out in May. If you want a two-word review, it’s great. It describes official myths and distortions, from overselling trade deals to claiming distance no longer matters in trade to saying corporations control the world by infiltrating the WTO. To give you a flavour of the tone, corporate lobbyists’ occasional visits to a WTO meeting have “the bemused and mildly horrified ‘what’s all this then?’ air of an English constable arriving on the scene of an out of control food fight at the local clown college”.

AB You want the book to be “accessible hard work worth doing”. (Obviously a cynical play for the mass market.) Who most needs to know this stuff? Politicians themselves, journalists, businesses, voters?

DG My publisher’s preferred answer would be “every man, woman and child on planet Earth”, but that’s probably a touch ambitious. I wrote this book for people who have policy issues they care about, whether it’s climate change, job creation, national security or anything else. Trade and the decisions governments make about it impact all of these.

AB Brexit and Trump’s trade wars might be expensive ways to learn about trade, but have they oddly led to more appreciation of the issues?

DG Absolutely. One of the reasons trade has historically been so easy to lie about is how separated causes and effects are. You sign a free trade agreement today and 10 years from now you can look back and (if you squint) make some guesses about what it actually did.

Brexit and Trump’s trade wars, because they were about unpicking the existing order and potentially doing so very abruptly, forced all sorts of people to take these issues a lot more seriously and start asking far harder questions about what’s under the hood. There’s nothing like staring down the barrel of mile-long queues at the border and empty supermarket shelves to make everyone, from voters all the way up to prime ministers, ask a few follow-up questions.

AB You had a very interesting observation about economists being brought in only at the end of trade talks to make up some figures to justify the deal.

DG What I was trying to illustrate as gently as I could is that trade negotiations and trade policy are first and foremost about politics and power. In a fight between a policy the economic modelling says will have greater long-term GDP benefits, and a policy the political affairs folk say has the strong backing of a large and vocal interest group, my money is on the latter. Polish farmers aren’t being coddled on Ukrainian grain imports because some wonky IMF econometric analysis said so.

AB I remember talking to Doug Irwin once who said that Nafta boosters said it would create half a million jobs and Nafta bashers said it would destroy half a million jobs. In fact jobs-wise it was probably a wash. How much is overstatement on both sides a problem?

DG Overstatement is the greatest problem humanity has ever faced, or ever will. More seriously, yes I think it’s a problem that especially before the text is public, both supporters and detractors of a trade agreement can say literally anything about its impacts in an ultimately unfalsifiable way. A trade agreement could do just about anything. 

More practically though, I think the challenge is that we focus on tools like trade agreements when we should be having a discussion about the problems we’re trying to solve. A trade agreement isn’t a goal in and of itself, any more than “surgery” is an objective.

AB I literally can’t think of a question to ask you about the WTO. Is that OK?

DG Probably not a great sign for the organisation, but absolutely fine by me!

AB If you had to advise governments to make a positive but honest case for more trade that they’re currently not making, what would you say?

DG I would say that tariffs are taxes on your own citizens for being insufficiently patriotic in their purchasing choices, and that feels like there should be a high bar to clear before we reach for them as a policy tool.

I would say that climate change requires us to pool the ingenuity, creativity and productivity of the entire world and we can’t afford to caveat our climate ambitions on all solar panels and electric vehicles being made exclusively in our swing electoral districts.

And I would say that people are smarter than the current level of discourse and can be trusted to understand trade-offs if they’re clearly and honestly explained.

Charted waters

China doesn’t want a sharp destabilising devaluation of the renminbi, as George Magnus argues here, even if in theory it would help its renewed export drive. But downward pressure on the currency from falling interest rates and capital outflows suggests that at some point it might not have much choice.

Trade links

The OECD, WTO and IMF are all predicting a sharp rebound in global goods trade this year driven by strong US economic growth and falling inflation.

My FT colleagues consider the controversial plans among some of the rich democracies to seize Russia’s frozen assets.

A report from the Center for Strategic and International Studies think-tank looks at new tools the US can use to combat Chinese coercion.

The Economist examines how China and the US are trying to recruit countries as allies in their tussle with each other.

The EU agriculture commissioner has asked China not to target agriculture in trade disputes, one of the more quixotic requests to come out of Brussels in recent years and one that essentially confirms where Europe’s economic weak spot is.

Trade Secrets is edited by Jonathan Moules