Men and Their Testosterone Caused the Credit Crunch?

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True to form, economists have offered a range of explanations for the financial crisis that threatens the world and which so few of them managed to predict. Some blame something called collateralisation, others easy money, still others lax regulation.

But, by focusing on the technicalities, have they overlooked a more obvious culprit – men?

After all, it is men who dominate the financial system that got us into this mess; it is men, by and large, whose trading inflated the profits of banks to levels that now seem like the stuff of testosterone-fuelled fantasy; and it is men who pocketed most of the bulging bonuses that even President Bush reckons were a key cause of the crisis. All of which raises an important and deliciously controversial question: what would have happened if global financial institutions had been run by women?

Would they have been more focused on the human consequences and less on the next pay cheque? Would they have been more empathetic and less cut-throat? Would financial districts have had a few more crèches and a few less of those godawful bars where traders hang out to brag about their latest deal? In short, would we have avoided this calamity if markets had been doused with sufficient quantities of oestrogen?

So, who is right? The question cuts to the heart of two of the fiercest modern controversies: “How do financial markets actually work?” and “Are men and women really so different?”

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