{"id":521264,"date":"2010-04-08T16:10:08","date_gmt":"2010-04-08T20:10:08","guid":{"rendered":"tag:www.economist.com,21005905"},"modified":"2010-04-08T16:10:08","modified_gmt":"2010-04-08T20:10:08","slug":"a-kinder-gentler-finance","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/521264","title":{"rendered":"A kinder, gentler finance"},"content":{"rendered":"

IF THE bodies of the lords of finance contained a little more oestrogen would the financial crisis have happened? One lingering question post-crisis is how things might be different if more women worked in finance. Perhaps to address this issue, several women who\u2019ve worked in academia and who now work in government sat on a Treasury panel show last week, to show solidarity with women who work in the finance industry.<\/p>\n

It is impossible to know if more women would have led to a different outcome. New York Magazine<\/a><\/em> reckons so. It considers the hormones coursing through the veins of traders. Male traders tend to be young, aggressive, and full of testosterone. A toxic combination?<\/p>\n

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His colleague, neuroscientist Joe Herbert, agrees. \u201cThe banking crisis was caused by doing what no society ever allows, permitting young males to behave in an unregulated way,\u201d he says. \u201cAnyone who studied neurobiology would have predicted disaster.\u201d<\/em><\/p>\n<\/blockquote>\n

That\u2019s an over-simplification. The finance industry contains many different jobs and personality types. Traders are, and always have been, young and aggressive; many are former athletes. The problem was not that traders lacked adequate regulation from the government. It was management that required more oversight. Pretty much everyone up the chain may be held responsible. This is especially true of senior executives who should have the maturity and experience to know better. The exposure large banks had to toxic assets reflects appalling risk management, not over-confident traders. The question is not should we have more women or passive types execute trades. A more useful question is how things might have turned out differently if banks had more women executives and board members in thoughtful, key roles.<\/p>\n

It makes you wonder why there are so few women in high positions on Wall Street. Claudia Goldin and Larry Katz<\/a> looked at the career paths of women who graduated from a top-ranked MBA program. They found that having children can explain much of the income disparity. Women MBAs with children take more time off, work fewer hours, and select into less demanding jobs than women who are childless. Excelling in finance requires working very long hours. What\u2019s interesting is that the MBA women are more likely to earn less and work fewer hours if they have a high-earning spouse. Having a child has a much smaller impact on earnings for women with low-earning partners. This suggests some of the pay and promotion disparity maybe a luxury that comes with landing a high earning spouse (perhaps met on the job or at a prestigious MBA program).<\/p>\n

There also exists evidence that much of the wage gap can be explained by the fact that women are less likely to negotiate their salary and demand raises and promotions. Making such requests often takes a deluded sense of self-confidence, aggressiveness and a willingness to take risk. This posting from the New York Times<\/a><\/em> is also telling:<\/p>\n

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More than two years after Zoe Cruz\u2019s fall, Morgan Stanley has but one senior woman executive: Ruth Porat, a longtime firm veteran who was recently appointed as chief financial officer. She has been an outspoken advocate for the hiring and promoting of more women on Wall Street. \u201cOne of the biggest problems women have is they work really hard and put their heads down and assume hard work gets noticed,\u201d Porat has said. \u201cAnd hard work for the wrong boss does not get noticed. Hard work for the wrong boss results in one thing \u2014 that boss looks terrific and you get stuck.\u201d<\/em><\/p>\n<\/blockquote>\n

Of course, humility and the desire to spend time with your children are not entirely to blame. Finance is a profession still dominated by men and that sets the tone. Men often relate to each other and respond to stress differently than women do. This can lead to confusion and the perception that female colleagues are unstable or \u201cemotional\u201d. Men also respond to set-backs and difficult co-workers, they just do it differently (and not more professionally).<\/p>\n

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\u201cThere were always very few women on the floor of the exchanges,\u201d says a hedge-fund manager named Henry Lee, who spent years on the floor of the American Stock Exchange. \u201cBut the women who were successful at it were unbelievable.\u201d<\/p>\n

Lee is sitting at a trading desk with his friend Harley Evans, a derivatives trader at a firm called Mako Financial Markets, talking about gender differences in their line of work. \u201cThey never got ruffled, never got upset,\u201d Lee continues. \u201cLosing their temper? Never.<\/em>\u201d<\/p>\n

\u201cI think women can be very emotional, too,\u201d Evans says, not entirely convinced.<\/p>\n

\u201cWomen respond to stress differently,\u201d Lee says. Rather than throwing the phone across the room, \u201cwomen cry.\u201d<\/p>\n

\u201cWell, I\u2019ve cried, too,\u201d Evans says.<\/p>\n

\u201cNot that I\u2019ve seen. You cried alone in your closet,\u201d says Lee.<\/p>\n

\u201cI cried in my beer.\u201d<\/em><\/p>\n<\/blockquote>\n

So it appears that part of what keeps women down on Wall Street is sensitivity, the desire to spend time with their children, and being less likely to tout their accomplishments. But aren\u2019t that nurturing quality, sensitivity, lack of ego, and risk awareness the very things that might have tempered all the bad behaviour? It sounds as if a woman who wants to rise to the top must suppress the very things that are supposed to change the existing culture.<\/p>\n","protected":false},"excerpt":{"rendered":"

IF THE bodies of the lords of finance contained a little more oestrogen would the financial crisis have happened? One lingering question post-crisis is how things might be different if more women worked in finance. Perhaps to address this issue, several women who\u2019ve worked in academia and who now work in government sat on a […]<\/p>\n","protected":false},"author":5468,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-521264","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/521264","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/5468"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=521264"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/521264\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=521264"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=521264"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=521264"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}