Proportion of women working in central banks dips

The number of women working in central banks on average dropped slightly in 2019, according to the most recent data from the Central Banking Directory.

Women currently make up 45% of employees at central banks around the world, while in 2018 they accounted for 46.4%. This is the second year Central Banking has surveyed central banks on their gender ratio; in our 2019 survey, we collected data from 101 central banks as opposed to 91 in 2018.

The Central Bank of Bahamas and the Croatian National Bank have the highest proportions of female employees, with women accounting for 66% and 65.3%, respectively. Since 2014, the Bahamas has had a 2:1 gender ratio in favour of women and has consistently employed women among its management ranks.

Croatia stands out for having a similar high female gender ratio for economics graduates. But the high proportion of women at the central bank also stems from the country’s general population, which has noticeably more females (52%) as a result of years of war during the 20th century.

By contrast, there are still several central banks that recruit proportionally fewer women, not just for senior positions, but throughout the whole organisation. Of the central banks surveyed, the State Bank of Pakistan had the greatest gender imbalance, with men making up 89% of its employee cohort.

Pakistan’s gender imbalance reflects that only a small percentage of women participate in the broader workforce. According to the World Bank, women’s participation rate has almost doubled since 1992, but from a low base.

A lack of gender diversity within the central banking community is not a new phenomenon but, over the years, it has become less acceptable for central banks not to do anything about it. Research has shown a lack of diversity among decision-making boards can lead to worse outcomes, including less effective risk management.

As a result, there has been a big push around the globe to change current practices and ensure people from all backgrounds have the opportunity to enter the industry.

The Bank of England, one of the central banks that has faced harsher criticism than most over its male-dominated management, has made increased diversity of gender and ethnicities a strategic priority.

But it takes a lot of time and effort to realise that goal, governor Mark Carney said at a conference in June 2019. The focus needs to be on the “whole process, from recruitment to development to promotion”, he said.

Women make up 31% of the BoE’s senior managers compared with 17% in 2013, and they make up 46% of staff below senior management. One policy that has helped improve the figures has been changes to the central bank’s recruitment process.

In 2018, the BoE introduced pooled (or co-ordinated) recruitment for senior appointments. This allows the central bank to group its choices whenever it makes senior appointments rather than appointing in isolation.

Making bunched decisions is proven to improve the diversity of choices and, as a result, of the 15 promotions to head of division level between May 2018 and February 2019, 53.3% were women.

More women at the top

At the senior level, there were signs of improvement in the data. In 2018, only 13 of the 189 governorships were held by women; a year later, that number has ticked up to 15. Women now account for 8% of all governor roles across the world’s central banks.

In 2019, Christine Lagarde was appointed the first women to head the European Central Bank. Already a big name within the community, having led the International Monetary Fund from 2011–19, Lagarde has been a vocal proponent of gender diversity within the financial community.

Mary Daly was the second female appointment of the year, taking the presidency of the Federal Reserve Bank of San Francisco. Like Lagarde, Daly has strongly advocated for changes within the economics industry to ensure a level playing field for women.

Appearing in Central Banking’s Womenomics podcast in May 2018, she said central banks could not afford to sit idle. “Central banks need to reflect the populations they serve,” she said.

The Central Bank of Brazil also fared poorly in Central Banking’s latest gender ratio survey – only 23% of its employees are women. However, the central bank achieved a major milestone in the past year in appointing a second woman to its most important decision-making committee.

In July 2019, Fernanda Nechio became the fourth female director in the central bank’s 55-year old history, joining Carolina de Assis Barros, who took up her post in 2018. Both women sit on the central bank’s nine-member monetary policy committee.

For Nechio, the underrepresentation of female economists and their limited support networks reflect similar challenges that face first-generation university students.

She has written about actions aimed at increasing the number of women at the Federal Reserve Bank of San Francisco, where she previously worked as a research adviser. She expects more women to enter the field in Brazil in future.