day, November 15, 2012
17 Television Stand out sister: er: stine the IMF’s Christine Lagarde
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“The evidence is, if you are going to have committee decisions there will be better decisions if they are made by a committee that has a broad range of perspectives and not a committee of clones”
lenge central men’s club Emerging power: Mercedes Marco del Pont of Argentina’s central bank
boards of top central banks and often their responsibilities are relatively minor. Their representation is still lower than in the private sector. Of the world’s central bank heads, just 12 or about six per cent are women, according to this year’s Central Bank Directory. Most are in emerging markets, such as South Africa’s Gill Marcus and Mer-
cedes Marco del Pont of Argentina. One way to tackle the imbalance would be a quota system, similar to stalled plans for the private sector proposed by EU Justice Commissioner Viviane Reding, who wants companies to allot 40 per cent of their board seats to women by 2020. In central banking, appoint-
ments are usually made by national governments. Those not necessarily based on qualifications may be risky considering the responsibility that comes with such jobs - making decisions that affect not one company but one country, or an entire currency union. Few doubt Mersch’s qualifications. He has sat on the Governing Council since 1998 as Luxembourg’s central bank chief. A hardliner on curbing inflation, he holds postgraduate degrees in international public law and political science, and spent the early years of his career in public sector finance institutions. Rebecca Harding joined a group of economists, former central bankers and journalists in signing a letter to the Financial Times urging the European Parliament to withdraw its objections to Mersch. Harding, who is chief executive at Delta Economics, opposes quotas, which she said would undermine women
who have already reached senior positions on merit. “The pool of women of the right age, experience and track record at the moment is relatively small and it is too important at the moment to appoint on the grounds of tokenism compared to grounds of merit,” she said. DeAnne Julius, a former member of the Bank of England’s Monetary Policy Committee, disputes such suggestions. She believes that where there’s a will, there’s a way. “There are plenty of qualified women who have the ability and the appetite to take on those roles, but you have to look harder for them,” said Julius, who was an external member of the MPC. She suggested getting external recruitment companies involved and broadening the search to include commercial banking, corporations and civil services, which might require structural changes in some central banks. Julius worked in the private sector as chief economist at British Airways and Shell before joining the MPC when it was created in 1997. Of the women to have served on the MPC, Rachel Lomax was the only one who rose up within the UK central bank. “The evidence is, if you are going to have committee decisions there will be better decisions if they are made by a committee that has a broad range of perspectives and not a committee of clones,” Julius said. International Monetary Fund chief Christine Lagarde has made a similar point about the wider banking system. She has said that the financial crisis, which began in 2008 with the collapse of a US investment bank, might have taken a different turn had “Lehman Brothers been a bit more Lehman Sisters”. However, striking a balance between external expertise and understanding the internal workings of a central bank is vital. “You should be quite well acquainted with the practical work of a central bank, otherwise it is very difficult if you
come from the outside,” said one former female central banker, who asked not to be named. However, she held out hope for the eurozone and beyond. There were already many high-level female professionals in central banks, she said, pointing to Denmark, Austria, China and South America. “They are not yet necessarily in a position where they could be promoted faster than their male colleagues, but they are coming, I’m sure they are coming,” she said. The world’s most powerful central bank, the US Fed, seems to be making greater progress. Three of the Fed’s seven-strong Board of Governors are female. Three more women also sit on the Federal Open Market Committee, although not all are voting on the policy-making body this year due to a rotating system. A prominent example for women who have made it in the world of central banking is Janet Yellen, the Fed’s vice chairwoman who has been mentioned by the New York Times as a possible candidate to succeed Chairman Ben Bernanke. Economics, often a training ground for central bankers, has been male dominated for years but with more women studying the subject to a higher degree level this could change. The share of female economics professors in the United States almost doubled between 1997 to 2011 to 12.8 per cent, according to an American Economics Association. In Britain, the proportion of female economics professors doubled between 1996 and 2010 to 10 per cent, a survey by the Royal Economic Society Women’s Committee showed. There is a similar trend in Germany, where about 12 per cent of economics professors were women in 2010 compared with six per cent in 2000, data from the statistics office showed. Jacob Kirkegaard, Research Fellow at the Peterson Institute for International Economics, said women still face hurdles. “Let’s face it, central
banking, certainly in Europe, is probably among the most conservative, reactionary institutions you can think of,” he said. Nevertheless, Europe has some strong contenders such as Belen Romana Garcia, a former head of the Spanish Treasury and as such also on the board of the Bank of Spain. She was a firm favourite earlier this year to head Europe’s permanent rescue fund, but lost out to Klaus Regling. Soledad Nuñez, former Director General of the Spanish Treasury, joined the ECB in July as a board member of its new settlement platform Target2Securities, having earlier been tipped to become deputy governor of the Bank of Spain. In France, Anne Le Lorier has become the first female deputy governor of the Bank of France while Danièle Nouy, general secretary of the bank’s prudential supervisory authority, used to chair the forerunner to the European Banking Authority (EBA). Her name could come up when discussing candidates for the new post as the European banking supervision chief. In Germany Sabine Lautenschlaeger, vice president at the Bundesbank in charge of banking and financial supervision and a former head of Germany’s banking watchdog, would also be well positioned to take on such a role. Sharon Bowles, a Briton who chairs the European Parliament’s economic affairs committee and a driving force behind the Mersch rejection, has even applied to succeed Bank of England governor Mervyn King when he retires next year. Following Mersch, the next battle is already in sight. Bowles made clear earlier this month that the parliament wanted to see a women heading the new European banking watchdog - preferably an ECB outsider. “The parliament will be looking for gender balance throughout, not just by having a token chair,” she said.