British economist John Kay thinks that banks would improve if more women were in charge.
The most powerful posts in the financial world are held by women. Janet Yellen chairs the US Federal Reserve, and Christine Lagarde is managing director of the International Monetary Fund. Mary Jo White heads the US Securities and Exchange Commission, and was preceded in that job by Elisse Walter and Mary Schapiro. America’s new Consumer Financial Protection Bureau is directed by a man — but the reason is that the industry feared Senator Elizabeth Warren would fill the role too effectively.
All of these posts are public appointments. …. Senior jobs in private-sector finance are taken almost exclusively by men. ….
Simple justice, and the folly of excluding any qualified person, argues against discrimination on grounds of gender (or anything else). But perhaps men and women bring rather different qualities to finance. Cambridge neuroscientist John Coates (himself a former Wall Street trader) emphasises the link between testosterone and risk taking. The surges of testosterone and cortisol he observes as traders are gripped by excitement and depressed by loss are not observed in the same way in women.
This is perhaps a hormonal explanation of why men are drawn to the risk-taking functions in finance while women are engaged in regulating and organising. We might have better banks if there was rather less male risk taking and more female regulating and organising. Time, perhaps, for more women to be employed in executive roles in financial institutions.
John Kay, “Banks might improve with more women in charge”, Financial Times, 18 March 2015 (ungated link).
Published by FT with a different title.