September 04, 2013
By Megan Beyer, The Gender Equality Project
At a recent gathering of financial agency chiefs at the White House, the nation’s top eight regulators and President Obama reviewed the status of compliance with the Dodd- Frank bank reform bill. Just watching the regulators file in, it is clear – three years after the bill’s passage -- the agencies are still far from compliance on at least one aspect of the bill. Dodd-Frank mandates that agencies create workplaces with a more reasonable gender balance.
Of the eight top financial market regulators in the nation only two, the chairman of the Securities and Exchange Commission and chairman of the National Credit Union Administration, are women. Women are outnumbered three to one.
With Federal Reserve Chair Ben Bernanke’s expected departure, -- there is a good opportunity for greater compliance. Bernanke’s Vice Chair, Janet Yellen, is a long-standing and highly regarded bank regulator. She is considered to have one of the strongest backgrounds ever to take on the Fed Chief post. Her ascension to the top job would seem a natural.
But it isn’t. In these agencies, and throughout the economy, despite the well-documented correlation between gender diverse leadership and greater economic performance, the top spots are regularly held by men.
The public debate over the choice of a new Federal Reserve Board Chairman -- - raging now on the Internet -- offers clues to this disconnect.
Just to mention gender is to be called “the Gender Police.” Despite the fact that women are outnumbered 15 to one on the advisory councils to the Fed Board; despite the fact that Dodd-Frank Wall Street Reform mandates gender be a factor in hiring, contracting and procurement; the gender argument is met with a storm of negative feedback.
To suggest that putting a woman into this leadership role is a positive and constructive action -- as a nod to legislative intentions, or an acknowledgment of recent studies outlining the positive impact of more women in the financial markets, or just to rectify the current outsized gender imbalance -- invites criticism. The suggestion is instantly interpreted as replacing rational candidate vetting with gender quotas.
Yellen is up againsT former US Secretary of the Treasury Larry Summers for the job. Here is a rational candidate comparison:
When it comes to experience, Yellen has a dream resume for the job. A Yale graduate, she taught at Berkeley, Harvard, and the London School of Economics. She chaired President Clinton’s Council of Economic Advisors. She served on the Fed board in the 1990s and became president of the Federal Reserve Bank of San Francisco in 2004. She has been Vice Chair to Bernanke since 2010, and is credited with influencing him to take into account job creation -- a stimulus approach -- to steer the economy out of crisis. So much for the argument there are just no qualified women candidates.
How is her judgment? Assessed against her peers, Yellen is a star. A Wall Street Journal study of the top 14 Fed policymakers ranked Janet Yellen number one for accuracy in predicting the markets. While president of the San Francisco Fed, Yellen warned about the fallout from a collapse in housing. In 2007 she said the “600 Pound Gorilla in the room” was housing. Would that more people had listened.
Clearly Summers has great experience, albeit less focused for this particular post: former U.S. Treasury Secretary under President Clinton, President of Harvard (infamous for publicly musing that men and women did not have equal aptitudes in engineering and science), Presidential Advisor and consultant to Wall Street. His years at Treasury saw deregulation of the financial markets -- which in hindsight looks less positive than it did to Wall Street at the time.
Summers’ judgment is revealed in the defining moment of bank de-regulation: the dismantling of the Glass Steagall Act, which he described as a means to “better enable American companies to compete in the new economy." The banking crisis begs to differ.
So what is the opinion of people most familiar with the candidates- the top 50 money managers, investment strategists, and professional economists? A CNBC Fed Survey shows -- seven to one, Janet Yellen is their choice.
By any standard, Yellen looks to be in a strong objective position. Still, readers comments snarl about the Gender Police. Tweets, editorials and posts suggest that despite the experience, loyal service, the backing of her peers and reputation, Yellen is just missing “something.”
The Summers camp refers to it as “gravitas” but today’s talk-back readers are more specific. Like this one taking issue with a New York Times piece endorsing Yellen:
“I don't think this is a women's job. And the reason is that to inspire confidence there is a certain degree of virility required. It has nothing to do with an economic philosophy, or qualifications, or experience, I just think the markets would be more comfortable with a man.”
Today’s fast changing global economy has little patience for old comfort zones. You don’t have to be the Gender Police to recognize it is wrong and you don’t have to be a politician to see that it is counter to legislative intent. There is a windfall of women’s leadership outside the comfort zone, and our economy is ready and waiting to profit from it.