Women at the top are no silver bullet against the danger of banking collapse
The Lehman Sisters hypothesis suggests bank failures like the Lehman Brothers collapse wouldn’t have happened if there were more women in management. But our research suggests that increasing female staff on its own is unlikely to change the way bank risk is managed. The hypothesis relies on the research-proven fact that women are on average more risk averse than men. It implies that bringing more women into banks will lead to better risk management and reduce the possibility of bank failure or scandal. While female staff may be more risk averse on average, our research shows many of them are just as risk tolerant as male counterparts. These are the women who tend to make it to the management roles where risk-management decisions are made. Women make up more than half the workforce in the banks we analysed, but they are underrepresented at senior levels and in institutional banking. This is the arm of banking that offers complex financial advice and services to large institutions. F...
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