Central Bank Watch: Beyond Fed’s Yellen Where Are The Women?

It’s not a foregone conclusion that Janet L. Yellen will be the next head of the United States Federal Reserve System but it’s pretty close to one. Her nomination yesterday by President Obama (which, incidentally, iNVEZZ.com picked back on 3 September – see The US Federal Reserve – What does it do and who will replace Bernanke?) now needs the approval of the Senate Banking Committee, meaning that some Republicans will need to give it their blessing along with the Democrat majority but that should not prove to be an insurmountable obstacle.

Yellen is apolitical and plainly qualified for the job, having deputized for incumbent Ben Bernanke for the past three years, and is otherwise possessed of impeccable credentials.

So in all probability the Fed will have a new ‘chair’ – it’s unlikely that ‘chairman’ will be countenanced (or,one suspects, 'chairwoman') – come next 1 February and that appointee will be a woman, the first in the Fed’s 100-year history.

And Janet Yellen will then have gone where no woman has ever gone before globally, so far as our researches allow. And not only in the past; there is no other major economy central bank which currently has a woman at its head and indeed, as will shortly be revealed, women are few and far between on their governing bodies. Let’s take a closer look, ranking these central banks in order of female representation, from best to worst.

1. Reserve Bank of New Zealand – Female Presence = 42.85%

It’s a small country and it has a small central bank, personnel-wise. The sensibly-named Board of Directors, which superintends monetary policy as formulated by the governor, comprises just seven people. Three of the incumbents are women (in order of appointment, Sue Sheldon, Kerrin Vautier and, since the first of this month, Bridget Liddell), giving the RBNZ the highest women to men ratio amongst the central banks for the world’s most traded currencies.

2. Reserve Bank of Australia – Female Presence = 33.33%

Similarly to New Zealand, the RBA has just the single governing body for all the central bank’s functions, including monetary policy. Again, the governor takes the lead on making monetary policy calls but the Reserve Bank Board has an oversight. That body has nine members and, as with the RBNZ, three of the incumbents are women (Catherine Tanna, Heather Ridout and Kathryn Fagg).

3. United States Federal Reserve System – Female Presence = 28.5%/25.0%

The Fed has two key bodies, which share overall monetary policy formation. There is the Board of Governors and the Federal Open Market Committee, the latter having all seven governors on board plus five representatives of the 12 district Reserve Banks, who rotate (except for the NY Fed rep, who’s a permanent fixture). In addition to Janet Yellen, the Board of Governors also has Sarah Bloom Raskin until January 2016, meaning two of its seven members are women, so 28.5 percent in round figures.

On the FOMC, Yellen and Raskin were joined this year by Esther George, president of the Federal Reserve Bank of Kansas City, giving women a quarter of the current FOMC voting make-up. Two other women, Sandra Pianalto (Cleveland Fed president) and Christine Cumming (a vice-president at the NY Fed) are alternate members.

4. Reserve Bank of India – Female Presence = 21.42%

The RBI’s Central Board of Directors comprises 14 people, of whom two are women. There is Indira Rajarama and the venerable, and now octogenarian, Ela Ramesh Bhatt. But the Central Board must also take into account the positions of the four ‘Local Boards’, representing large regional interests in monetary policy, and the representative for the Eastern Area is Anila Kumari. So we’re giving women three of the 14 key posts in India’s central bank setup, or 21.42 percent.

5. Bank of Canada – Female Presence = 14.28%/16.66%

The BoC has a Board of Directors of 14, including two women currently – Phyllis Clark and Claire Kennedy- so a 14.28 percent female representation. But monetary policy is determined in what is styled the Governing Council, comprising the bank’s governor, its two deputy governors and three other appointees. Of those six key positions, one – also one of the deputy governors – is female in the form of Agathe Cote, so giving women a 16.66 percent say in Canadian monetary policy.

6. Bank of Japan – Female Presence = 11.1%

The BoJ has a unicameral governing body, called the Policy Board, which according to the website’s English version ‘determines the guideline [sic] for currency and monetary control’, amongst other functions. The Policy Board comprises the central bank’s Governor and its two Deputy Governors and six other appointees. With the Japanese penchant for consensus government there are various hangers-on, in the form of auditors and other experts, but the nine-person Policy Board calls the shots. One of its current members is a woman, Sayuri Shirai, whose terms finishes at the end of March 2016.

7. Swiss National Bank – Female Presence = 18.18%/0%

The SNB has a supervisory governing body, the Bank Council, comprising 11 appointees, of whom two – Monika Butler and Laura Sadis – are women, so that’s where the 18.18 percent comes from. But monetary policy, including the effective pegging of the Swiss franc to the euro, is decided exclusively within the Governing Board, which is a separate body. It has three standing members – the governor and his (yes, it’s a man) two deputies - and there is an ‘Expanded Board’ which includes another three appointees. Either way, they are all men, so zero percent female say in Swiss monetary policy.

8. Bank of England – Female Presence = 8.33%/0%

Here on Central Bank Watch we recently took a look at the curious governing structure in the BoE (see Central Bank Watch: The BoE – Oddly English But World Player Nonetheless) and noted that the ‘Court of Directors’ has no meaningful say in the setting of monetary policy. ‘Court’, as it’s called, comprises 12 appointees of whom one – Lady Susan Rice – is a woman, with her term expiring next May. So 8.33 percent female representation on Court (at the BoE, not Wimbledon).

But the real grunt in the BoE reposes in its Monetary Policy Committee, which is not in any way under the sway of the Court of Directors. There are nine members of the MPC, of whom not one is a woman. Hence a big fat zero.

9. European Central Bank – Female Presence = 0%, 0% and 0%

And zero is a number which comes up everywhere at the ECB. Let’s start with the Executive Board, from where the day-to-day work of the Eurozone’s central bank is managed and where you’ll most likely find president Mario Draghi when he’s not off making speeches. In addition to Draghi, the Executive Board has five other members, not a woman amongst them.Eurozone monetary policy though is established not in the Executive Board but in the increasingly bloated Governing Council, soon (with Latvia’s accession to the euro next 1 January) to comprise 21 members. It’s comprised of the president and his deputies and the heads of all the Eurozone national central banks, or NCBs. None of whom is a woman.

And let’s not overlook the General Council, even more bloated – at 28 souls - than the Governing Council because it includes the heads of all the NCBs in the European Union, non-Eurozone included. The General Council has no say on monetary policy for the euro but it still doesn’t have any women.

So zero, zero and another zero for the ECB on the female representation front. This bizarre state of affairs has not gone unnoticed in the wider corridors of the EU and indeed there are moves afoot to impose a positive discrimination rule for future appointments to the Executive Board at least (the make-up of the remainder of the Governing Council being in the hands of member governments).

Of course, it shouldn’t have to come to that.