IMF: ‘Women are good for the economy’

16 Apr 19

A senior figure from the IMF has called for the greater financial inclusion of women in financial institutions across the world, arguing that this would benefit economic performance.

David Lipton IMF first deputy managing director told an IMF and International Finance Corporation seminar on Saturday that discrimination is holding women back, from executives in boardrooms to women who seek education, access to financial services and employment opportunities.

He commented: “Many young women aspire to join our institutions from graduate programmes but the behaviour they face during their studies and early careers drives any away from our field. That drains our intellectual capital.”

Greater diversity, he maintained, means “less group-think and better decision making”.

“Research shows that having more women in leadership positions leads to greater financial stability, lower levels of non-performing loans and higher profits. Banks with a higher share of women on their boards were more stable in 2008, when the global financial crisis hit.”

He noted that nearly one billion of the 1.7 billion people globally without access to banking services are women, but fewer than 20% of bank and supervisory board members across the world are female.

Only 2% of bank chief executives worldwide are women, he added.  

Lipton said that, in the world’s financial institutions, Christine Lagarde, IMF managing director, and Kristalina Georgieva, World Bank chief executive were exceptions to the rule of male dominance. While the IMF would be welcoming a third female executive director in a few weeks and its chief economist was a woman it could do much better – only two of its 24-person executive board were women and it had not yet reached its 2020 goal of 30% of management positions filled by women.

He told the delegates: “Women continue to face conscious and unconscious bias—cultural, religious, or just the propensity of men to hire people who are like themselves. In addition, studies have found that women are held to a higher standard of performance—with women of colour facing even bigger obstacles.”

Lipton applauded the American Economic Association for putting in place sanctions against harassment. He said that harassment and violence against women, added an ugly dimension to the problem and that a shockingly large number of women economists having reported being victims of sexual assault.

He commented: “At the economic level, it is very costly in terms of health and services, reduced productivity and lost opportunities. At the organisational level, sexual harassment cuts to the very soul of an institution. This is criminal behaviour we are talking about. I speak for everyone at the IMF when I say that we must confront sexual harassment and stop it.”

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