A 2018 IMF paper makes a critical call to action to integrate inclusion into macro policy and not just social policy approaches, setting out the positive contributions that gender inclusion has across financial markets. But is also shows a shocking absence of women in senior leadership and financial supervision.

The IMF paper 'Women in Finance: The Case for Closing the Gap (2018)' looks at female participation in the financial sector across three areas – as users of financial services, as business leaders in the finance sector, and in financial regulation and supervision. The results are important as they underline the positive benefits of women having meaningful roles across the three areas, but also the stark gap that exists.

The paper highlights the importance of ensuring that women have access to financial services as primary users, and the positive macro-economic effects that result from such access.

However, the striking finding from authors Ratna Sahay and Martin Čihák is the shocking dearth of female representation in the leadership of financial institutions – in particular banks and banking supervision agencies across the world.  

The study itself helps to plug a gap in the study of the impact on financial sector performance from the lack of representation. But more research is needed, to address the lack of appropriate data to assess the gaps and causes.

From a broader perspective, the paper makes a critical call to action that inclusion be addressed in wider macro policy and not just as a social policy issue. The authors argue that integrating inclusion policies will help to broaden financial markets and make monetary policy more effective.

Key findings:

• Just 2% of CEOs of financial institutions and less than 20% of executive board members are women.
• This is far out of sync with the availability of adequately educated candidates (citing Credit Suisse data from 2014 that women make up 30% of economics graduates and 50% across business and social sciences).
• The problem is primarily in advanced economies – many low and middle income countries have a higher share of women in supervision roles.
• Although the study notes we need more research on the causal links, it finds that where there is a higher share of women on bank boards, it results in higher bank stability (through higher capital buffers).
• The study finds women are more prevalent in savings banks, and less so across investment banks, bank holding companies and securities firm

It concludes that’ greater inclusion of women as users, providers and supervisors of financial services would have benefits beyond addressing gender inequality’. It would ‘foster greater stability and resilience in the banking system, enhance economic growth and contribute to more effective monetary and fiscal policy’.

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