When Harriet Harman hinted that the Government might use equality legislation to force the appointment of more women managers in the banks that we, the taxpayers, now own she certainly ruffled some – mainly male – feathers.
A spokesman for the august British Bankers' Association somewhat patronisingly responded that while – of course – they "would be supportive if a woman was the best person for the job" they were "not in favour of positive discrimination".
Others were more blunt. One unnamed critic in the Daily Mail dubbed the plan "socialism in one clause" which would burden firms with excessive red tape.
But scary or not, there is a chance that the minister could be on to a good thing. The reputation of bankers and financiers is at a low at present, partly because of the madly competitive way that they exposed the institutions they ran to higher and higher risks in pursuit of expansion of profit.
And, of course, women are generally not as competitive as men.
So let us suppose that it had been Freda Goodwin rather than Sir Fred Goodwin running RBS, or Jane, not Sir James Crosby at HBOS, or Eve instead of Adam Applegarth at Northern Rock. Would the reputation of Britain's financial sector be higher or lower than it is now?
This is not a wholly subjective question. There is some science that informs the answer, because of work by a team from Cambridge University who measured testosterone levels in a small group of male City of London traders at 11am and 4pm on a number of days, and matched the results to the same days' levels of profit or loss. They found that testosterone levels were significantly higher on days when traders made more than their average profit.
Financiers are like sportsmen, the study suggested. On days when they have testosterone coursing through their veins, their confidence rises and they produce the results expected of them. But the research pointed to a downside to trading floor frenzy. Too much testosterone can be addictive, driving over excited males to take more and more risky decisions.
John Coates, a research fellow in neuroscience at Cambridge, was on Wall Street during the dotcom bubble. "Many traders at this time displayed manic behaviour and a sense of infallibility," he said. "Equally telling was that women appeared relatively unaffected. Both facts implicated a chemical such as testosterone."
Writing in the Financial Times, he warned that in times of crisis like the current recession, another chemical, cortisol, was also affecting traders who "appear cool and unemotional – but beneath the poker face is an endocrine system on fire." That system can drive traders to the other extreme during bad times, putting them in a condition of "learned helplessness", when they are unwilling to take any risks at all. Having more women and older men around could have a calming effect.
Trevor Phillips, who heads the Equalities Commission, believes that putting more women in charge would go a long way towards restoring public confidence. "In an economic recession, some may be tempted to take their foot off the gas when it comes to tackling inequality, asking if we can afford it. But the truth is, tackling the decades old inequality faced by women should be at the heart of efforts to restore business reputation."
Muhammad Yunus, among the world's most renowned and respected bankers, whose business has thrived in the current recession, has views about women and money which sound as if they are taken from some feminist manifesto when they actually borne out of experience.
Yunus founded the Grameen Bank 26 years ago, to give the poor of Bangladesh access to small loans which they could use to pull themselves out of poverty. The business became the model for a worldwide movement to relieve poverty through microcredit, and earned him the Nobel Peace Prize in 2006.
The bank started with the principle that women should have the same right to credit as men, and reckoned they would divide their business about 50-50 between the sexes. But experience taught him that although men and women were equally reliable when it came to repaying loans, the loans advanced to women had a more beneficial social effect. "At the beginning we had no idea that this sort of thing would emerge, but it's so clear," he said in a recent lecture. "Women have a longer vision. So we asked another question. We said: 'What's so good about 50-50? – let's change it, because we have got so much social impact.' Quickly, we moved from 50, to 60, to 70, to 90 per cent. Today we have seven and a half million borrowers; 97 per cent are women."
In parts of Asia, it is expected that women control the household budgets, and therefore they are the ones with experience of money management, but a rule that works for basket weavers of Bangladesh does not necessarily translate to the boardrooms of multinational banks.
And there are signs that even the British Bankers' Association may be softening. Angela Knight, who was a treasury minister in the last Conservative government now heads the organisation. She thinks there is a case for more women in boardrooms, but warns against overstating it."
Investing in equality: Careers in banking
* Almost half the women in senior positions in investment banking have no children, according to research from Cranfield University.
* The wage gap in the banking sector is about 40 per cent, almost double the national average of 23 per cent.
* Most investment banks now recruit almost equal numbers of men and women graduates, but at managing director-level, women account for between 5 per cent to 15 per cent of staff.
* Almost three-quarters of City professionals believe the recession will be an opportunity for women to change careers, while 60 per cent think it will reinforce the glass ceiling.
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