Another Crisis, Another Prophetic Woman Ignored
By now, most people are familiar with the story of Brooksley Born, who essentially predicted the financial crisis of 2008 while she was head of the Commodity Futures Trading Commission (CFTC)—only to be rebuffed by Alan Greenspan, Robert Rubin and Larry Summers. Other women, like Sheila Bair and Susan Bies also apparently sounded alarms that were ignored. Now we learn that another woman, Angela Knight, gave unheeded warnings related to the Libor scandal. As the Wall Street Journal puts it (here):
At an April 25, 2008, meeting with officials at the Bank of England, Angela Knight, head of the British Bankers' Association, argued that the London interbank offered rate, or Libor, which serves as the basis for interest rates on trillions of dollars of loans and financial contracts, had become too big for her organization to manage, according to minutes of the meeting and a person who was there. Her suggestion went nowhere.
As I have noted previously, one may well ponder the gender implications of financial crisis in light of all of this. The money quote from that post:
In a fascinating and innovative study, Coates and Herbert (2008) advance the notion that steroid feedback loops may help explain why male bankers behave irrationally when caught up in bubbles.