Too much testosterone on Wall Street

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Editor's Note: Sarah Iqbal is a consultant at the World Bank, currently working on the Doing Business Gender Law Library. Previously, she worked as an attorney in California.

Writing in the New York Times columnist Nicholas Kristof opines on the benefits of having greater gender diversity in the financial sector:

At the recent World Economic Forum in Davos, Switzerland, some of the most interesting discussions revolved around whether we would be in the same mess today if Lehman Brothers had been Lehman Sisters. The consensus (and this is among the dead white men who parade annually at Davos) is that the optimal bank would have been Lehman Brothers and Sisters.

Wall Street is one of the most male-dominated bastions in the business world; senior staff meetings resemble a urologist’s waiting room. Aside from issues of fairness, there’s evidence that the result is second-rate decision-making.

The basis of his argument comes from studies pointing to greater gender diversity as mitigating increased risk-taking behavior. According to one such study peer pressure leads to male herding behavior in financially pressurized situations resulting in high risk bets. Women’s propsensity for risk-taking, however, seems immune to this type of pressure. So is it just me, or does the crux of Kristof’s argument boil down to there being too much testosterone on Wall Street?


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