Would more women profit the City?

If Harriet Harman, Labour's deputy leader, has her way, banks will be run from now on by women.

"Sometimes we have to take scary methods to achieve worthwhile results," Harman said, defending her plan for positive action.

She reckons if ladies in tasteful grey Jil Sander suits — as opposed to men tipsy on testosterone — had run banks in the first place she wouldn't be telling us what to do.

But is that really what would have happened — and what do female bankers think of Harman's latest idea?

"I think it's great that we are winning the argument but there is a place for quotas and this isn't it," said Amber Rudd, a prospective Tory parliamentarian and former banker.

"There is a view that had there been more women on the board of Lehmans, which was particularly aggressive, there would have been a different result. But I think the business of compulsory hiring of women breeds resentment. And it backfires on them."

When Rudd did her research she found that only 12 per cent of managing directors in the City were women, and of that percentage virtually none were mothers. "It's the culture that needs to change, not the gender," she said.

Nor is Harman's idea new. Iceland — where reckless financial behaviour at the hands of men is said to have led to the country's total economic collapse — put an all-women team in charge.

When Johanna Sigurdardottir became prime minister, the first thing she did was to declare that she would lend far more to women, following the guidelines of Nobel Prize Laureate Muhammad Yunus. "I don't want to lend to men," she said. "They take unnecessary risks, they get drunk and they don't give the money back."

Yet some of my female friends who have survived thus far in the City are rejoicing. "We are in love with this story," said Melinda, who runs a highly profitable department in an international bank. "And of course we agree that there should be more women in banking. We have been saying the same for ages.

"I also agree about the testosterone-fuelled mismanagement of banks. You only need, as an example, to look at Mitie, the one FTSE company with an all-female team at the top. It spent years ignoring City cries to make more efficient use of their balance sheet' — ie take on more debt — and now people are turning to them to ask how they have managed so well through the downturn. Go figure."

Some women are more cautious. "I would be wary of the idea that women should be put in charge now that we are in a fear' cycle — because when it is back to greed, and it will be, does that mean women won't be capable?" said former banker Diana Godding. "I also disagree with the idea that women are less aggressive than men in terms of taking risk."

Why there aren't more women in the senior echelons of banking has always been a subject of discussion in my circle of friends. Some men argue that when it comes to the kill of a deal, women just don't have it in them (therefore they make less profit).

A banker friend says male bankers are the hunters — the problem was that there weren't enough women babysitting: "Evolutionary psychology suggests that men are crap risk managers: the cave needs to be looked after by a woman.

Testosterone-fuelled men at Lehman Brothers
forgot to look over their shoulders as they hunted for the big mammoths in competition with others."

Banking is primarily a safety matter, as the world has just discovered. There's a note of caution, though. The Lehman Brothers' CFO was actually a woman, Erin Callan, a one-time golden girl who left the firm just before it went bankrupt.

Harman is using the gender argument. Indeed, neuroscientists (who are being invited in ever-growing numbers into banks) have noticed that the "winning effect"— where men get so drunk on the buzz of profit that they take even bigger risks until eventually they get sloppy — partly explains some recent behaviour.

Meanwhile, a report by the University of Michigan suggests that women really do become risk-adverse at certain moments of their menstrual cycle (the researcher even suggested that women only negotiate during or right after
menstruation).

"Epidemiologically speaking women are more anxious," said Dr Theodore Soutzos, a Harley Street consultant psychiatrist with many City clients. "The more anxious you are, the more you comply. In the City, women would have been less likely to break the rules which got us into trouble. But the type of woman who makes it in a highly predatory male environment tends to be more male, so you have to be careful. Harman could make the situation much worse."

My banker friends say that if banking were easy, or even fun, everybody — including more women — would be doing it. Those still employed complain that either they can't entice women to join or they can't keep them (because of the relentless hours) once they do.

Isabelle Hotimsky, a former senior recruiter working with City executives, believes the result has been that men hire other men like themselves who reinforce their values.

"A male banker would suggest everyone grow the balance sheet and everyone unanimously agrees," she said. "Women might have challenged the point of view. Having said that, the mandatory putting in of women in key positions is wrong. If you put in token women, they're not taken seriously and you set the cause back."

When Barack Obama capped bonuses, American banks increased base salaries. Harman should be studying human nature, not gender biology.

Greed brings people into financial institutions.
"Harman can force poetry-reading women into senior positions," said a male banker. "But will we ever see any profits?

Explain to me why, in this day and age, almost all the self-made billionaires are still men? Banks are in the business of making money, not advancing equality."