Thursday, May 13, 2010
The New Sheriffs of Wall Street
A few weeks back, at an event to celebrate the role of women in finance, Treasury Secretary Timothy Geithner tried to get things started with a joke. He said he had recently come across a headline that asked, "What If Women Ran Wall Street?"
"Now that's an excellent question, but it's kind of a low bar," Geithner continued, deadpan amid rising laughter. "How, you might ask, could women not have done better?"
It is rarely noted that the financial wreckage littering our world is the creation, almost exclusively, of men, not women. And no wonder: to this day, each of the large banks, from Citigroup to Goldman Sachs, employs fewer than a handful of women in senior positions, and only 3% of Fortune 500 companies have a woman as CEO. Embarrassing tales of a testosterone-filled trading culture tumbled out of the what-went-wrong probes as the Great Recession took hold. (See the seven key elements to financial reform.)
In itself, Geithner's joke was not extraordinary for Washington, where self-deprecating fare is the norm. But what happened next drove home a deeper point: the lectern in the marbled hall at the U.S. Treasury known as the Cash Room was cleared away so that a panel of women could take their seats. Among them was Sheila Bair, the chair of the Federal Deposit Insurance Corporation (FDIC) and one of the first federal regulators to publicly sound the alarm about the collapse three years ago. She sat next to Securities and Exchange Commission (SEC) chair Mary Schapiro, the first woman to hold that post and the deciding vote to initiate the agency's recent lawsuit against Goldman Sachs. Across the stage sat Elizabeth Warren, chair of the panel bird-dogging the Troubled Asset Relief Program (TARP) bank bailout and the chief advocate for new consumer-finance regulations that banks and their allies have spent millions to oppose. Suddenly, something else became clear: these women may not run Wall Street, but in this new era, they are telling Wall Street how to clean up its act.
The same is true all over Washington: three of the five SEC commissioners are women; the head of the White House Council of Economic Advisers is a mother of three; and in the Senate, women have been leading the charge for tougher regulations. Arkansas Senator Blanche Lincoln stunned the banks in April with tough derivatives regulations that she announced in a letter to a small group of mostly female Senators, who fought beside her to include the language in a final bill.