Today the Bundesbank has leapt to the defence of the much-maligned male banker, saying that it was not them, but the women on lenders’ boards that encouraged risk taking.
This from the FT’s Frankfurt bureau chief Ralph Atkins:
Board changes at banks that result in a higher proportion of female executives “lead to a more risky conduct of business”, concluded the authors of an extensive study of German finance houses released by the country’s central bank…
…Explaining their controversial findings, based on an analysis of German bank executive teams from 1994 to 2010, the report’s authors suggest a main reason is that women executives tend to be “significantly less experienced” than male counterparts and that a lack of experience drives risk taking.
The argument that women fail to control risk because they lack experience is a bit circular surely.
But, regardless of what has happened at German lenders, a plethora of women in their upper ranks is not an excuse that central banks can rely on in explaining their policy failures. Read more
Central among the Bank of England’s current concerns are fears that the recent spike in oil prices could prove more permanent than commonly thought.
This from the latest Monetary Policy Committee minutes:
A clear risk surrounded the outlook for crude oil prices. The increase on the month appeared to have been driven primarily by fears of future disruption to the supply of oil. Any worsening of the underlying tensions in the Middle East could have significant implications for future oil prices. And with an underlying upward trend in global demand, the risks might be more to the upside than suggested by the oil price futures curve which was used as a guide in constructing the Committee’s inflation projections.
This suggests that the Bank’s outlook is more hawkish now than is shown in its February inflation forecast. But, even if that is the case, that might not be altogether apparent from the next round of fan charts, out in May.
In fact, because of the Bank’s dogged refusal to publish some of the information underpinning its forecasts until a week after the fan charts are released, the May forecasts may well do more to mislead than inform on the MPC’s thinking. Read more