Women
as Central Bankers and Bankers …Can they help get more respect for
banking/finance?

Factually, no woman has been appointed as a
Governor of RBI in India since inception.. However, several women had served as
a Deputy Governor. Is it just a reflection of male dominance prevalent in the
country where women have been always remained in second fiddle? Is no woman
proved herself capable to run RBI as it is a very challenging and daunting
prowess as its policy can influence the entire economy of the country?&nbsp; Is it is just a matter of woman choice to
pursue economics as a subject? Is this issue related with only in India or the
world as a whole? 

While finding answer to the above question,
it is pertinent to mention that when Mrs Janet Yellen was appointed as a &nbsp;Chief of FED in USA , it has been said that
she has been made chief only because USA President Mr. Barack Obama positive attitude
towards woman. But it was quoted that due to no male counterparts were as
experienced as Janet Yellen, she was made FED Chief as no alternate choice was
available. It means that general belief is still in tact that a woman is not a
better choice than a man. She calls this male dominated central banking
industry as the &nbsp;last gentleman’s club. Presently, &nbsp;there are&nbsp;17 countries where we have
women central bank heads&nbsp;Malaysia, Russia, Argentina, South Africa,
Lesotho, and Botswana – but they are just exceptions..

Based on the above example in the best
developed country of the world where woman is equally empowered, in our country
even thinking of a woman Governor is like a dream. In our country, it is
factually identified that the said post is still under the influence of
Government and the demand for total&nbsp; RBI
autonomy is gaining&nbsp; ground.&nbsp;&nbsp;&nbsp; 

If you can keep your head
when all about you,

&nbsp;

Are losing theirs and
blaming it on you;

 
If you can trust yourself when all men doubt you,

 
But make allowance for their doubting too:

 
If you can wait and not be tired by waiting,

 
Or being lied about, don't deal in lies,

 
Or being hated don't give way to hating,

 
And yet don't look too good, nor talk too wise

&nbsp;

 
From “If”, a poem by Rudyard Kipling,&nbsp; Raghuram
Govind Rajan cited excerpts from this famous poem by the acclaimed English
writer on September 4, 2014, the day he took over as the 23rd governor of the
Reserve Bank of India (RBI). The poem, he said, lists the requirements of an
ideal central banker. Rajan's reference to the poem in his maiden speech offers
a glimpse into his mind - the mind of someone who is determined to do the right
thing and not be cowed by criticism.

&nbsp;

Since beginning he made quite clear about asserting his
autonomy . No
doubt, Rajan, who used to be Chidambaram's chief economic advisor, has the
government's confidence. But relations between the RBI and the government have
often been fraught with tension. Benegal Rama Rau, the fourth RBI governor,
resigned abruptly in January 1957 due to differences with the then finance
minister T.T. Krishnamachari. Even Subbarao shared an uneasy relationship with
the finance ministry. Last year, Chidambaram famously said he would "walk
alone" to revive economic growth if the RBI didn't offer any support. 
 
And Subbarao took a dig at Chidambaram days before demitting office. "I do
hope Finance Minister Chidambaram will one day say, 'I am often frustrated by
the Reserve Bank, so frustrated that I want to go for a walk, even if I have to
walk alone. But thank God, the Reserve Bank exists',"

&nbsp;

In August, 2014, after Rajan was named the central bank's
chief, senior BJP leader Murli Manohar Joshi questioned how a foreigner could
be appointed as the RBI governor. Rajan, who holds a US green card, has
dismissed such queries. "The green card does not require you to take a
pledge of allegiance anywhere... It simply is a work permit which you need to
have to work in another country," he asserted on October 29 after announcing
the second-quarter monetary policy review. Will he be able to navigate the
political landscape while keeping the RBI's autonomy intact? This will be
keenly watched in his three-year tenure. Rajan would surely love to end his
innings at the RBI with another Kipling poem, "The Secret of The
Machines": 
 
"But remember, please,

 
the Law by which we live,

 
We are not built to comprehend a lie,

 
We can neither love nor pity nor forgive,

 
If you make a slip in handling us you die!

 
 


&nbsp;Yellen’s appointment is particularly
important, because she breaks the glass ceiling in the advanced economies.
Until her promotion, no member of the G-7 had a woman heading its central bank.

Moreover, men occupy all 23 seats on the
European Central Bank’s (ECB) Governing Council. Since the Bank of England’s
Monetary Policy Committee was established in 1997, only three women have been
appointed as external members – and no woman has even been nominated since
2002. The Bank of Japan has only one woman on its Policy Board. &nbsp;Women,
nowadays, are more likely to occupy top political jobs. Angela Merkel was
recently reelected for a third term as German Chancellor; Britain’s voters
elected Margaret Thatcher three times as Prime Minister; and France has had a
female prime minister. But no woman has come close to leading these countries’
central banks.

Equality seems to have eluded central banks
even in gender-conscious Scandinavia. For example, Norway, which has been
promoting positive gender discrimination for years and recently elected Erna
Solberg as its first female prime minister, has yet to allow a woman to control
the purse strings – at either the central bank or the finance ministry, with
its powerful sovereign wealth fund.

Recent attempts to compel change have been
counter-productive. In an effort to promote diversity and gender equality in
the ECB, the European Parliament in 2012 blocked the appointment of
Luxembourg’s Yves Mersch to the bank’s executive board. But MEPs then failed to
propose a plausible female alternative, leaving the ECB understaffed for weeks
during the eurozone sovereign-debt crisis.

Unsurprisingly, the European Parliament’s
handling of Mersch’s appointment was widely ridiculed, and his nomination was
eventually confirmed. But many people drew the wrong conclusion from the
episode, which they viewed as affirming the idea that competence and experience
must always trump ill-conceived ideas about positive discrimination. If there
are no suitable female candidates, it was argued, then the best candidate
should prevail, regardless of gender.

·&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Interestingly,
in India&nbsp;Arundhati Bhattacharya has been appointed as head of SBI, India’s
largest commercial bank. Tamal of Mint&nbsp;<a href="http://www.livemint.com/Opinion/D2bSmgTSg2uPz7SToRe6WJ/Why-too-few-women-bankers.html" target="_blank" rel="">also points</a>how many banks in India
are headed by women. He throws some interesting stats:

In the Reserve Bank of India (RBI), it was
a 68-year wait for a woman to reach the deputy governor’s post. The central
bank traditionally has one governor and three to four deputy governors to
formulate monetary policy and run the banking system. RBI’s first woman deputy
governor, Kishori J. Udeshi, took over in June 2003. Subsequently, two more
women reached this tier—Usha Thorat and Shyamala Gopinath.

Against this backdrop, the State Bank of
India’s wait of 206 years to get its first woman chairperson has been a bit
longer. With Arundhati Bhattacharya, 57, moving into the corner office at the
nation’s largest lender, women chief executive officers (CEOs) now control
close to 40% of India’s banking industry assets. This is an interesting piece
of information as women’s representation in the executive cadre of public sector
banks, which account for about 70% of India’s banking industry assets, is less
than 3%. They make up about 17% of the total workforce in the state-run banks.
While their representation in the clerical cadre is a little over 26%, about
11% of officers in the industry are women. In private banks, the scene is
somewhat better. For instance, in ICICI Bank Ltd, the nation’s largest private
sector lender, women employees constitute roughly one-third of the workforce.

Right now, women CEOs are managing four
state-run banks, taking the total number to seven in the 44 years since India
nationalized most of its privately run banks in 1969. It took 31 years after
nationalization for a woman to become a bank’s CEO, but the pace of female
professionals advancing to the top post has gained momentum since then. Very
soon we will see one more woman boss in Usha Ananthasubramanian, an executive
director of Punjab National Bank, when she takes over as chief of Bhartiya
Mahila Bank, which is set to launch its operations in November. After that,
there won’t be too many women advancing to the top as the pipeline is drying
up. There is only one woman executive director in the state-run banking
industry now—Krishna Guha, in Dena Bank.

There are not too many women in the top
executive cadre—general managers—in the state-run banking industry. Overall,
there are only 36 women among 630 general managers across banks. State Bank of
India has the maximum number of women general managers—16 out of 138; Bank of
Baroda, Canara Bank and Indian Overseas Bank have three each; and Punjab
National Bank and Union Bank of India have two each. There are quite a few
state-run banks where no woman is among the top executive cadre.

He points how some banks have made women
friendly policies like ICICI Bank..India is also likely to start its women
centric bank in Nov-13,2014.

&nbsp;

Most people ask these questions in terms of
power equations between males and females. There is little doubt that this
banking business has been a male club. But this is the case with most
professions and is not limited to just economics and finance. In fact the way
this world is run it is unlikely it is going to bring more women into
profession..

Therefore, the following questions which &nbsp;are not in any order and apply either to both
bankers and c-bankers or to one of them:

·&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Now
that we have some kind of start, can these women central bankers/bankers bring
more respect to central banking/banking industry?

·&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Can
they make this an industry which is less risk-seeking and less greedy?

·&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Can
they shift the focus of banking from the testosterone driven trading and
speculation activity to a more purposeful financial intermediation activity?

·&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Can
they look beyond the rational school to a more useful behavioral school which
respects the several biases in human beings? This will make the subject more
interesting and real..Why would women want to enter an industry which is unreal
and getting even more &nbsp;unreal over the years.

·&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Can
these central bankers look beyond making monetary policy just for the banker’s
club and focus instead on public at large?

·&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Can
efforts be made to make women understand how monetary policy helps? How about
conducting the next mon pol meeting not amidst bankers club but amidst a
women’s club explaining the nuances of mon pol?

From the above, we can gather &nbsp;a basic sense of things. Am hopeful this will
drive more women to the profession..

There are some really talented women in
financial industry. Their understanding of things is second to none.
Collectively they can surely make a difference to this crazy and mean world of
banking. Like a woman who balances the family really well, we need women
bankers to bring some balance to the world of banking where greed dominates
over everything else.&nbsp;Much of finance is about common sense, balance and
patience a virtue most women have. It is not about the fancy things we see and
associate finance with.

&nbsp;

&nbsp;

&nbsp;

Subachi says at the end:

If gender is a proxy for diversity, then
central banks fail a basic test of it. Promoting diversity – not only in terms
of gender, but also with respect to age and, in many countries, ethnic
background – is a matter of effectiveness as much as a question of social
justice. A broader, more transparent recruitment process would reduce
groupthink, challenge the&nbsp;status quo, and, one hopes, leave central banks
better equipped to handle a financial crisis. The promotion of Yellen and Flug
is a good start; now the doors of these fusty male-dominated clubs must be
flung wide open.

The purpose needs to be much broader than
that…Apart from fixing the gender equation we need women to change the industry
as a whole.

<a href="http://www.piie.com/staff/author_bio.cfm?author_id=906" target="" rel="">Caroline Freund</a>&nbsp;of&nbsp;&nbsp;PIIE&nbsp;<a href="http://www.piie.com/publications/opeds/oped.cfm?ResearchID=2482" target="_blank" rel="">poses this question</a>&nbsp;in a WAPO article.

“I
know who Summers is, but who is the other guy?” a friend asked as we discussed
candidates to lead the Federal Reserve. It is not a guy, of course, but Janet
Yellen, the vice chair of the Fed, who is the top candidate for the job now
that Lawrence H. Summers has withdrawn his name from consideration.

Yet,
statistically speaking, my friend’s presumption was not misplaced. The United
States has never had a female head of its central bank nor a female Treasury
secretary, despite being home to the top university programs in economics, with
an increasing share of advanced degrees going to women. Thirty-one of the 34
Organization for Economic Cooperation and Development (OECD) countries have not
had a female central bank leader; the three exceptions are Austria, Finland,
and Poland.

And
the trend is not improving. All three women were in office in 1993; since 2002,
there has been none.

There
is a bright spot for women in the developing world. Of the 36 non-OECD
countries with populations greater than 20 million, seven have had female
central bank chairs. Here, the trend is positive, with five in office in 2013.

The
countries which are often shown to have bad record in female empowerment are
doing better in central banking. Not too long ago, RBI too had two Deputy
Governors as women. 

&nbsp;

&nbsp;

&nbsp;

What
are the reasons for male dominance?

One
possibility is that relatively few women study economics and finance, which
tend to be prerequisites. This leaves a very small pool of qualified
candidates. But being a finance minister has similar requirements, and six OECD
countries had female finance ministers in 2011. Four are in office today.

A
more troubling explanation is that women may still not be part of the
tight-knit clubs from which central bank heads are chosen. Because central
banks are independent, trust that the chairman’s goals are aligned with the
administration’s interests is more critical than for other appointed positions.
Bankers want someone they know and trust, the administration wants the same,
and the independence of the institution means you’d better be pretty darn sure.
In contrast to Cabinet positions, the Federal Reserve head cannot be fired if
he or she strays from administration goals or fails to meet expectations.

As
an example, consider that a stellar publication record, a pedigree as former
chairman of the Princeton economics department and service on the Fed board
were initially not enough for Ben Bernanke to be asked to replace Alan
Greenspan. President George W. Bush brought Bernanke in to head the Council of
Economic Advisers and got to know him better before naming him Fed chairman.
The lack of relative outsiders in this position suggests it is about not only
what you know but also whom you know and how well. Women may perform less well
in areas traditionally populated by old boys’ clubs.

If
this is the case, more women should surface in these roles when terms are
shorter or there is less independence in central banks. Of the five women
serving in large markets this year—Argentina, Malaysia, Russia, South Africa,
and Venezuela—only Malaysia has a central bank that is fully independent. That
is also the only country of those five where inflation is running below 5
percent. The bank head in Malaysia, serving since 2000, has a PhD from the
University of Pennsylvania and has won numerous prestigious banking awards.

The
European Central Bank, where no women sit on the executive board, recently took
steps to expand women’s role in central banking, pledging to double the share
of women in middle and senior management positions. The Fed has done better on
that score and, with two women on the board, has at least one highly capable
candidate for the chairmanship.

No
one is suggesting that women be appointed to central bank boards as a token.
But neither should gender rule out a candidate.

Given
the subpar performances of central banks in the United States and Europe in
regulating the banking sector and anticipating the financial crisis—thanks in
part to the groupthink mentality that has prevailed—more competition and less
clubbiness in appointing their leaders surely would not hurt.

So
the guys who are believed to have strong views on free markets and competition,
themselves come via a non-competitive/opaque process. Such is life.

Moreover,
behavioral research shows how women are better at risk management and finances
as well.

&nbsp;Now the time has come and more and more
women&nbsp; are being given prime post
financial sector, we can assume &nbsp;that it
is just a matter of time, a woman may be appointed as a Governor of RBI soon.
As they have proved their mettle to handling financial institutions. They are
also now very vocal and competent.&nbsp;&nbsp; 

&nbsp;

&nbsp;

why no woman has been made RBI governor

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