This really isn’t a feminist blog but there seems to be a lot of anti-women stuff going on right now. In my last post on the infamous Belvedere Vodka commercial, I was mentioning about the world being in a post feminist reactionary period where Republican primary candidates are talking about making the American government small enough to fit in a vagina while their June Cleaver wives stood by their man and baked cookies for the cause so I thought that a little video on them would be a clever intro to this post. Actually I’m probably going to meet some of them up close when I travel to my oldest daughter’s convocation at UBC in Vancouver this May. Her boyfriend’s whole family will be at a private post convocation party with my family and they come from the mountains in the western part of North Carolina. I’ve already been given orders not to talk about politics, religion, history and especially family history. Mentioning my daughter’s United Empire Loyalist ancestors would not go over well -”Oh, by the way our ancestors were shooting at your ancestors two hundred years ago.” Sort of a cross border Hatfield and McCoy since they live in the southern spur of the Appalachian Mountains.
The purpose of this post is to analysis a new discussion paper from the Deutsche Bundesbank which was released today. The bank is continental Europe’s de facto central bank and is affectionately known as “Buba.”
The title is “Executive Board Composition and Bank Risk Taking” which is a bureaucratic style for saying how did the European banking community get in such a f#cking financial mess and who do we blame. The lead investigator was Allen N. Berger from the Wharton financial institutes center at the University of Pennsylvania. Mr. Berger was a former senior economist in the financial services section of the US Federal Reserve and is a well respected expert in financial services with such riveting publications as ''The Dominance of Inefficiencies over Scale and Product Mix Economies in Banking'' and ''Debt Maturity, Risk, and Asymmetric Information''. His academic background includes a Ph.D. in Economics from the University of California at Berkeley, 1983, a M.A. in Economics from the University of California at Berkeley, 1979 and B.A. in Economics, Northwestern University, 1976. The discussion paper abstract is below:
“Little is known about how socioeconomic characteristics of executive teams affect corporate governance in banking. Exploiting a unique dataset, we show how age, gender, and education composition of executive teams affect risk taking of financial institutions. First, we establish that age, gender, and education jointly affect the variability of bank performance. Second, we use difference-in-difference estimations that focus exclusively on mandatory executive retirements and find that younger executive teams increase risk taking, as do board changes that result in a higher proportion of female executives. In contrast, if board changes increase the representation of executives holding Ph.D. degrees, risk taking declines.”
They had a pretty good data set using the “entire population of German bank executive teams between 1994 and 2010” but I wasn’t happy with their regression analysis formulas. Basically older male PhDs like Mr. Berger were good and lead to lower risk while ingénues lead to higher risk. They also stated that affirmative action programs like the recent non-legislative resolution from the European Parliament to insist on 40% of supervisory and executive positions in large European firms be filled by women would lead to poorer corporate outcomes. This post may not have the visceral punch of my “rape is fun (not) “post but it’s just as important. If the position taken in this paper with respect to women becomes the consensus position of European banks then it will be the greatest failure of feminism for mathematically inclined women in Europe since Sonya Kovalevsky was refused admittance to German universities in 1870.
On second reading of this post, I realised that most of my readers have probably never heard of Sonya Kovalevsky, the greatest female mathematician before the twentieth century. She was born to a Russian aristocratic family in 1850 and first learned math at a very young age in the family nursery where a shortage of wallpaper at the time lead to her father papering the room with pages from his calculus book. She wanted to learn about the equations so she self taught in an early version of homeschooling. At the time, women were not allowed to study at universities in Russia so at the tender age of 18, she had a marriage of convenience with a Vladimir Kovalevsky so she could travel abroad to Germany and study at the University of Heidelberg. Sonya was still not allowed to pursue a PhD in German universities so she was privately tutored by Karl Weierstrass at the University of Berlin and she received her PhD in 1874 becoming the first women to receive the advance degree from any university. Today she is mostly known for her mathematical work on the theory of partial differential equations and the rotation of a solid body about a single point. She was the first women member of the Russian Academy of Sciences as well as an esteemed novelist who wrote “The Sisters Rajevsky” and “Vera Vorontzof.” The first book was a fictionalized bildungsroman of herself and her sister in Russia. I wonder if C. has read it.