When the world gets closer.

We help you see farther.

Sign up to our expressly international daily newsletter.

Already a subscriber? Log in .

You've reached your limit of one free article.

Get unlimited access to Worldcrunch

You can cancel anytime .


Exclusive International news coverage

Ad-free experience NEW

Weekly digital Magazine NEW

9 daily & weekly Newsletters

Access to Worldcrunch archives

Free trial

30-days free access, then $2.90
per month.

Annual Access BEST VALUE

$19.90 per year, save $14.90 compared to monthly billing.save $14.90.

Subscribe to Worldcrunch

Time To Break Up The Banking World's All Boys Club?

Investment bankers are often young men with too much testosterone. To add a bit of rationality to the global financial system, maybe it’s time banking giants like Goldman Sachs bring on more women and older men.

Philipp Löpfe

A week after his very public resignation from Goldman Sachs, dissident banker Greg Smith is still making waves. His accusations against the investment giant, which he chided for engaging in unethical behavior with respect to its clients, were for many the straw that broke the camel's back. Investment bankers have lost the "Master of the Universe" image they so long enjoyed. Now they're seen more and more as "losers," which is something that will likely impact future generations of bankers.

Since the 1980s, there's been a glamour factor associated with investment bankers. Part of that has to do with the piles of money being earned by the bankers themselves, whose salaries match those of rock stars and top soccer players. Movies like Oliver Stone's Wall Street (1987) and books like Michael Lewis's Liar's Poker: Rising Through the Wreckage on Wall Street (1989) cemented the macho image. Top performers from the most elite business schools were rushing to get Wall Street jobs, unfazed by the inhumanly long hours and the brutal dog-eat-dog competition.

That picture appears to be changing. In its analysis of the latest Goldman Sachs affair, the New York Times notes that graduates who once felt drawn to the top banks – "like moths to light" – are now looking at other sectors. According to the paper, financial insiders say that revelations about the lives of would-be top dogs in the finance sector are turning more and more people off, and keeping them from applying to the firms with the hardest selection criteria.

Mathematics professor Chris Wiggins of Columbia University is quoted as saying: "The claim of investment banking that it serves a social purpose by ‘lubricating capitalism" has been eroded. It's simply very difficult for young people to believe that they're serving any social purpose now."

A call for new hiring practices

At the same time, events have shown that investment banking is driven less by the rationality of efficient markets than by the high testosterone levels of young bankers. Joan Coates, a former Deutsche Bank and Goldman Sachs trader, has demonstrated this empirically. And that represents a danger to the whole system. A Financial Times writer noted that too much testosterone can lead to individual success, but "in a collective, it leads to excessive aggression, dangerous over-estimation of self, and herd behavior."

Coates's advice to the banks is to re-think their hiring policies. They should hire more women and older men, he says. A different mix in the trading room would make the vibe less hectic and cut down on the drama – sheer biology would decrease the testosterone and hence risk levels. At the same time, new hiring policies would solve the problem of how to attract new talent to the field.

Read the original story in German

Photo - Wonderlane

You've reached your limit of free articles.

To read the full story, start your free trial today.

Get unlimited access. Cancel anytime.

Exclusive coverage from the world's top sources, in English for the first time.

Insights from the widest range of perspectives, languages and countries.


The Problem With Always Blaming Climate Change For Natural Disasters

Climate change is real, but a closer look at the science shows there are many factors that contribute to weather-related disasters. It is important to raise awareness about the long-term impact of global warming, but there's a risk in overstating its role in the latest floods or fires.

People on foot, on bikes, motorcycles, scooters and cars navigate through a flooded street during the day time.

Karachi - People wade through flood water after heavy rain in a southern Pakistani city

Xinhua / ZUMA
Axel Bojanowski


BERLIN — In September, thousands of people lost their lives when dams collapsed during flooding in Libya. Engineers had warned that the dams were structurally unsound.

Two years ago, dozens died in floods in western Germany, a region that had experienced a number of similar floods in earlier centuries, where thousands of houses had been built on the natural floodplain.

Last year saw more than 1,000 people lose their lives during monsoon floods in Pakistan. Studies showed that the impact of flooding in the region was exacerbated by the proximity of human settlements, the outdated river management system, high poverty rates and political instability in Pakistan.

There are many factors that contribute to weather-related disasters, but one dominates the headlines: climate change. That is because of so-called attribution studies, which are published very quickly after these disasters to highlight how human-caused climate change contributes to extreme weather events. After the flooding in Libya, German daily Frankfurter Allgemeine Zeitung described climate change as a “serial offender," while the Tageszeitung wrote that “the climate crisis has exacerbated the extreme rainfall."

The World Weather Attribution initiative (WWA) has once again achieved its aim of using “real-time analysis” to draw attention to the issue: on its website, the institute says its goal is to “analyse and communicate the possible influence of climate change on extreme weather events." Frederike Otto, who works on attribution studies for the WWA, says these reports help to underscore the urgent need for climate action. They transform climate change from an “abstract threat into a concrete one."

In the immediate aftermath of a weather-related disaster, teams of researchers rush to put together attribution studies – “so that they are ready within the same news cycle," as the New York Times reported. However, these attribution studies do not meet normal scientific standards, as they are published without going through the peer-review process that would be undertaken before publication in a specialist scientific journal. And that creates problems.

Keep reading...Show less

The latest