Christine Lagarde’s appointment to lead the European Central Bank was a landmark event in improving gender diversity in economic policy making, but global central banks still have a long way to go.
Lagarde’s leadership contrasts with the all-male eurosystem of national central bank governors, a report from the Official Monetary and Financial Institutions Forum pointed Thursday.
While Europe is the best-performing region when it comes to diversity of central banks, only 14 institutions are female-led across the globe, representing less than a third of the global economy.
Some recent efforts to appointment women to senior central banking positions have fallen flat. While the UK government worked with diversity specialists to replace Governor Mark Carney, only two women applied and the role went to Andrew Bailey.
In Ireland, deputy governor Sharon Donnery was “overlooked” for promotion to the top post upon Philip Lane’s move to the ECB, the report indicated. The role went to Gabriel Makhlouf instead.
“Perhaps the selection process needs to change,” said Danae Kyriakopoulou, chief economist and director of research at OMFIF. “It is legitimate to remind recruiters that a central bank is a team, and that they are not just picking the best individuals, taken one by one in isolation, but the best combination of minds.”
Overall, OMFIF’s gender balance index improved to 28 percent in 2020 from 25 percent a year earlier, the think-tank noted, with a score of 100 percent representing perfect balance between women and men.
The improvement reflects progression within senior positions, as well as the appointment of more women to deputy governor positions.
Spain topped the index, followed by Aruba, Iceland and Malaysia, the think-tank said. The Asia Pacific score improved the most.
Canada may soon be joining the ranks of a central bank with a female chief, with Senior Deputy Governor Carolyn Wilkins one of the favourites to take the top job later this year.
The inclusion of previously underrepresented groups in leadership can encourage competition and help ensure a range of views inform policy making. That’s important for central banks “in light of their social duty to resemble the society they serve,” the report stated.
One-fifth of central banks have no women in senior positions or on monetary policy committees, and more than half of those are in the Middle East and Asia Pacific.
“Action is needed to correct opportunity asymmetries and level the playing field, and create more inclusive and supportive work environments,” the report said. “Things will not change without modern, progressive policies.”