Could Women Have Prevented a Financial Crisis?

The economist Anne Sibert hypothesizes that gender inequality in the finance industry is partly to blame for the financial crisis. She points to evidence that men are less risk-averse in financial decision-making, more overconfident, and perhaps susceptible to testosterone-fueled feedback loops in asset bubbles. She concludes, “If — as the research may suggest — men are less risk-averse than women, then a work group composed primarily of men (or primarily of women) may be a particularly bad idea.” (HT: Free Exchange) [%comments]


Alex B

I think that's called cultural feminism

Oskar Shapley

What others already said:

The trade promotes and selects people, who get better results, which means higher risk.

If law prohibited men from working in finance, the industry would select risk-seeking women for the trader jobs, because they would have the results.

That's how the incentives work and you can do nothing about it.

A Woman representing Women

My mother's money manager (a male) keeps on telling me, despite the losses he incurred to her , that I should look at the whole picture. He is right. And I have. Based upon his' performance record, attitude and quesetionnable ethical behaviour, He is a gonner.

This goes back to the stylistic differences between men and women when it comes to giving directions. Men act like they know, even if they don't. Women are cautious and will admit their ignorance and let you know their limitations. so how do we get along. I find that being upfront helps alot. There are men willing to accept the fact that women can be formative game players, money managers etc. when it comes to finance and other matters and there are men who cannot. They need their their women to appear subservient. The problem is-- women have something unique to offer. And it is about time that we get the credit where and when it is due.

The fact is my dad (an IRS Man) would not have made any of the wise business decisions that he did without my mother's guidance. Neither would my father have succeeded in business without his' mother's quiet guiding hand.

This, by the be, is not to say that men don't have something to offer. I listen to my husband's advice all the time-- but then I make my own decisions. It is nice to have a partner when it comes to life's important matters.

As far as going to war- actually, in ancient times, women are the ones to have sent their sons to war when it came to survival- i.e., figured out a way to inspire them to so. so the whole notion that women cannot or won't play hardball is a lie. We have learned to play it seemlessly. The truth is, we (using our heads) generally know better. You go to war when it is necessary and not otherwise. The human costs are too high to allow male biology to rein. .

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Alex

Why are we assuming that risk-aversion is a good trait? People who are conservative during booming periods may be labeled risk-averse in contrast to the others around them, but that's not real risk-aversion.

If group decisions tend to be more extreme than the views of individual members that comprise the group, then in a woman-led (and thus risk-averse) society, we'd all need perfect credit to get car loans. We may not have the spectacular meltdowns we have now, but we wouldn't get very far.

Genderprincess

It fits that there are almost no women in governmental financial institutions, maybe this has something to do with the current crisis:

There's an interesting video of a german Professor, who has looked into the way women are affected by the current crisis and the fact, that there are almost no women in any deciding governmental board:

http://etalks.tv/blog/2009/12/05/brigitte-young-munster-university/

Matt

In my experience, men eat more sandwiches than women, while women eat proportionally more soup. I also find that women more often describe themselves using adverbs while men tend to use more adjectives.

I agree with the sentiment that a homogeneous bunch of people shouldn't unilaterally control... anything. Unfortunately, this particular clip abstracts and essentializes the problem along simplistic gender lines that are as likely to reinforce the thinking that produced these economic phenomena as they are to subvert them.

I just don't see the value of articulating the problem as emerging from exclusive rule by white men (though that is a symptom) -- instead, let's be critical about the fact that the people running the show are the people who benefit most from it (and from consolidating power via de-regulation, perpetuating the happiness of money myth and its correspondence with the "American dream", etc.).

And in case my soap box hasn't yet broken under the weight of my prose, let me ask: at what point do we start talking about "whiteness" in the financial management culture? The deafening silence about race is hard to stomach.

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