Would women have averted the bubble on Wall Street?
If women ran America's banks they couldn't have done worse, says Geithner
Tuesday 30 March 2010
A Wall Street run by women would be more focused on the long term and on the real-world consequences of its actions, a conference of the most powerful women in US finance heard.
At an extraordinary event at the Treasury in Washington yesterday, women from the top echelons of banking and government regulators assembled to debate how female influences might change the industry, and how to swell the numbers of women in senior management positions.
And hanging over the symposium was one much-discussed questions of the era: would a Wall Street run by women have avoided the credit crisis?
The most outspoken critique of the issues came from one of Wall Street's most outspoken critics, Elizabeth Warren, the academic appointed by Congress in 2008 to monitor the $700bn (£470bn) industry bailout, and who has been tipped as potential candidate to run a new consumer protection agency proposed by the White House.
She recalled a conference on financial innovation at the height of the credit bubble, when sub-prime mortgages were being sliced and diced on Wall Street into toxic derivatives that would ultimately infect the whole financial system. The credit crisis, she said, "began one lousy mortgage at a time".
"It was only the two women in the room who wanted to talk about what innovation meant at the household level, about the 'liar loans' and the credit cards nobody could understand, and all these tricks and traps," she said. "For everyone else, it was as if there was only one view, and that was at the macro level, about moving money all at once. But it is the household level which often is the driver of the economy, and the fallout for households was just not on the table." Ms Warren said it was time to "retrain ourselves" and stop feeling as if male voices carry more weight.
Introducing the conference, Timothy Geithner, the US Treasury Secretary, mused on whether Wall Street would be improved by having women in chief executive posts, something that has not so far happened at the major investment banks. "It is an excellent question, but kind of a low bar," he said. "How could women not have done better?"
Panellists yesterday also included Sheila Bair, head of the Federal Deposit Insurance Corporation, the main banking regulator, and Mary Schapiro, chairman of the Securities and Exchange Commission, the financial markets watchdog, as well as senior figures from Morgan Stanley, Citigroup and Goldman Sachs.
Abby Joseph Cohen, senior US investment strategist at Goldman Sachs, cited research showing women tended to be more thoughtful and take a medium term or longer-term perspective on investment decisions. "Some of the firms that emerged from this terrible crisis are the ones that had very strong internal processes, and people who said, 'Don't sell me a story here, I want to see the hard accounting.' I am very proud to say that at my firm the controller is a woman and the treasurer is a woman."
The event was broadcast live on the internet to students around the country, and the senior Wall Street figures also gave advice to young women examining a career in finance.
- 1 Autism 'caused by genetics', study suggests
- 2 What happens to your body when you give up sugar?
- 3 Why you should never make assumptions about people with autism
- 4 Tourist films plane's descent just metres above packed Caribbean beach
- 5 Have sex with your iPad thanks to the new sex toy no-one asked for
Tourist films plane's descent just metres above packed Caribbean beach
Bali nine: Welcome to 'Execution Island' – the Indonesian holiday resort where foreigners are sent to die
How Homer Simpson discovered the Higgs boson over a decade before scientists
The 'sex selfie stick' lets you FaceTime the inside of a vagina
Harrison Ford plane crash: Star Wars actor 'seriously injured' after light aircraft crash lands
Durham Free School: 'Creationism taught at' free school facing closure
Nearly 100,000 of Britain's poorest children go hungry after parents' benefits are cut
End of the licence fee: BBC to back radical overhaul of how it is funded
Ex-head of MI6: 'We shouldn't kid ourselves that Russia is on a path to democracy'
Most people think legal tax avoidance is just as wrong as illegal tax evasion, poll suggests
Nigel Farage promises Ukip will not 'stigmatise' would-be migrants – and says he wants 'everyone to speak the same language'
iJobs Money & Business
£13000 per annum: Recruitment Genius: This is an exciting opportunity to join ...
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...
£8 per hour: Recruitment Genius: This Pension Specialist was established early...
£30 - 35k + Bonus & Benefits: Guru Careers: We are seeking an Executive Assist...