Thursday, 12 September 2013

EUROPE: European Central Bank & Gender Equality

The European Central Bank has announced plans to introduce gender quotas for top levels of management. It's a much needed move, and one that could have a wider effect on the banking industry as a whole.

It was always so -- money makes the world go round, and men make the money go round. Global banking is a male-dominated world, even in countries where the past few decades have seen great strides taken towards gender equality. In order to change that, major institutions need to take the lead in redressing the imbalance.

Step forward the European Central Bank ( ECB). The bank is to introduce quotas for women in middle and senior management positions. By the end of 2019, it is hoped that 35 percent of the former and 28 percent of the latter will be "qualified women",  -- up from the current level of 17 and 14 percent respectively. The gender split among the ECB's workforce is actually fairly even, but it's the men who call the shots at the top of the food chain.

The ECB's board made the decision some time ago, although it is only being announced now. The implementation of this ambitious goal would require a major rethink at the central bank, and critical to its success would be a "change of mentality for the current leadership" in the ECB.

There are "sufficient well-qualified women" at the ECB, and many new top-level jobs will be created when it takes over the task of European banking oversight next year -- the perfect opportunity to enact the reforms. They are reforms that are much-needed: On the ECB council, which plays a major role in deciding the fate of the euro, there are currently 23 men and exactly zero women. Things don't look much better at the level below, where women fill only two out of 14 director positions.

So far, the general opinion at the ECB has been that women are themselves partly to blame for the situation. For this reason, the ECB has implemented a mentoring program to help female candidates as they work their way up the ladder.

If the new policy works, it could spark similar efforts in banks elsewhere. As guardian of the euro, the ECB is one of the world's most important banking institutions. Setting an example on gender equality could have a positive effect both on both smashing the glass ceilings faced by women in the financial industry, and on the quality of the individuals holding those jobs.
 
Doubts remain, however, about whether the ambitious goals can be met given the nature of the ECB as an extra-national body representing countries with different national interests. When it comes to appointing ECB directors, and national central bank heads on the council, politics is what matters. The euro-zone member countries suggest candidates for the board which the European parliament must agree to.

By Guylain Gustave Moke
Political Analyst/Writer
Investigative Journalist

Photo-Credit: Bloomberg-European Central Bank-Photo