Christine Lagarde. Picture: REUTERS
Christine Lagarde. Picture: REUTERS

London — Christine Lagarde’s appointment to lead the European Central Bank (ECB) was a landmark event in improving gender diversity in economic policymaking, but global central banks still have a long way to go.

Lagarde’s leadership contrasts with the all-male line-up of national central bank governors in the eurosystem, the monetary authority of the eurozone, a report from the Official Monetary and Financial Institutions Forum (OMFIF) said on Thursday.

While Europe is the best-performing region when it comes to diversity of central banks, 14 institutions are female-led across the globe, representing less than a third of the global economy.

Recent efforts to appoint women to senior central banking positions have fallen flat. While the UK government worked with diversity specialists to replace governor Mark Carney, two women applied and the role went to Andrew Bailey.

In Ireland, deputy governor Sharon Donnery was “overlooked” for promotion to the top post upon Philip Lane’s move to the ECB, the report said. The role went to Gabriel Makhlouf instead.

“Perhaps the selection process needs to change,” said Danae Kyriakopoulou, chief economist and director of research at OMFIF. “It is legitimate to remind recruiters that a central bank is a team, and that they are not just picking the best individuals, taken one by one in isolation, but the best combination of minds.”

Overall, OMFIF’s gender balance index improved to 28% in 2020 from 25% a year earlier, the think-tank said, with a score of 100% representing perfect balance between women and men. The improvement reflects progression within senior positions, as well as the appointment of more women to deputy governor positions.

Spain topped the index, followed by Aruba, Iceland and Malaysia, the think-tank said. The Asia Pacific score improved the most.

The inclusion of previously underrepresented groups in leadership can encourage competition and help ensure a range of views to inform policymaking. That’s important for central banks “in light of their social duty to resemble the society they serve”, the report said.

One-fifth of central banks have no women in senior positions or on monetary policy committees, and more than half of those are in the Middle East and Asia Pacific.

“Action is needed to correct opportunity asymmetries and level the playing field, and create more inclusive and supportive work environments,” the report said. “Things will not change without modern, progressive policies.”

Bloomberg