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GENDER BALANCE The Crash of 2008 ... 10 years later ... The Story that Nobody is Telling 
Original article: https://www.linkedin.com/pulse/crash-08-story-nobody-telling-sallie-krawcheck/ Peter Burgess COMMENTARY I agree with the general thrust of this essay ... almost certainly things could have gone better with more women making decisions throughout the organizations in the financial sector ... but whether it would have saved the banking system from its catastrophic collapse, I rather doubt. I graduated from Cambridge (engineering and economics) in 1961 and qualified as a Chartered Accountant in 1965. During my adult lifetime I have observed the emergence of more and more sophisticated financial engineering, much of which defies the laws of gravity. Much of the published analysis in many fields including economics and finance is very good about a very small bit of the total system, but almost totally irrelevant in the bigger scheme of things. This article is in the category. The subject does need to be addressed together with hundreds of other issues that also need to be addressed. Success will come when ... or if ... we start doing something about a whole range of issues all at the same time. The banking collapse of 10 years ago did not come as a surprise, but rather confirmed concerns many outsiders had had for years. The potential for an even bigger banking and finance fiasco in the next decade or two is much more likely than not. More women will certainly help ... but the needle needs moving a very long way. There is an awful lot to be done. Sallie Krawcheck has had an impressive career by all the conventional measures including setting the stage for more female success in the business world. I like her thinking related to 'risk', but I would like to learn more about what she thinks of as the critical risks of our time. It would be interesting to compare hers with mine!!!!!!! Peter Burgess | ||
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The Crash of '08 Story that Nobody is Telling
Written by Sallie Krawcheck ... Influencer ... CEO and Co-Founder of Ellevest We’re approaching the 10-year anniversary of the most convulsive part of the financial crisis: the implosion of Lehman Brothers and the subsequent Great Recession. And so, in between the Trump-Can-You-Believe-It-News-Du-Jour, you’re seeing a rash of articles on it: its causes, where the major actors are now, how it led to greater wealth inequality, how it thus may have led to the rise of populism. I was there. I was running Smith Barney at the time. And here’s what you’re not going to read in these anniversary articles … anywhere: the role of gender as a factor in the crisis. “Huh? What?” you may say. Yes, the financial industry had too much financial leverage. Yes, there was greed. Yes, the regulations hadn’t kept up with the industry “innovations.” But what we don’t often talk about is that the industry suffered from too much complacency, from too much confidence in their understanding of the business and the markets, from too much groupthink. And groupthink can, in turn, be caused by cognitive homogeneity. (In other words, too many people who think alike because they are alike.) Wall Street in 2008 was a business of mostly men — mostly white men — on its trading floors, in its management, among its financial advisors. As a test: Raise your hand if you think the financial crisis would have been worse if the trading floors were 50% women, instead of 90%+ men? (Even when I ask this question of a roomful of men, no one ever raises their hands. Not a single person.) On the one hand, this intuition is backed up by research that shows that poor risk-taking increases with testosterone levels and that homogeneous groups of traders tend to show off for each other, by taking on more risk. On the other hand, it’s also backed up by research that gender diversity is correlated with better business results across a range of metrics, including lower risk. So … what happened to diversity in the financial services industry in the wake of the financial crisis? It went backward. It went backward on the leadership teams, and it went backward throughout the companies’ rank and file. Even today, this aspect of the crisis — and the vulnerabilities that homogeneity implies — remain virtually unexamined: Trading floors remain mostly men. Money managers are mostly men — despite the fact that the research indicates that women as a group deliver superior investing results. Financial advisors remain mostly men. Industry leadership remains mostly men. This stubborn status quo is why we founded an Ellevest, so that we women are well-represented and well-served. So, happy anniversary. I guess.
| The text being discussed is available at | https://www.linkedin.com/pulse/crash-08-story-nobody-telling-sallie-krawcheck/ and |