Researchequal opportunities, finance

Women in Finance: A Case for Closing Gaps

Publication date: 09/2018
Women in Finance: A Case for Closing Gaps
Authors: Ratna Sahay, Martin Čihák, and other IMF Staff
Committente: International Monetary Fund

 

This study analyzes the intersection of gender and finance, examining women’s roles not only as users of financial services but also as leaders in financial institutions and financial supervision agencies. Gender gaps persist in access to and the use of finance. Financial inclusion is a major challenge regardless of gender, and efforts are needed to address it for the entire population. Nonetheless, the global gender gap is very persistent, meaning that women still account for the majority of the financially excluded worldwide, and gaps remain very large in some regions.

While financial inclusion is an important goal in itself, new evidence suggests that greater inclusion of women as users of financial services has generally positive macroeconomic outcomes as well. Greater access to and use of accounts for financial transactions, savings, and insurance can help increase long-term macroeconomic growth. In line with results observed for financial inclusion more broadly, the marginal benefits for economic growth wane as financial depth increases, and the evidence suggests that there are potential risks when borrowing grows without supervisory safeguards. The paper studies the large gaps between the representation of men and women in leadership positions in banks and in banking-supervision agencies worldwide. It finds that, shockingly, women accounted for less than 2 percent of financial institutions’ chief executive officers and less than 20 percent of executive board members. Contrary to common perceptions, many low- and middleincome countries have a higher share of women on bank boards and banking-supervision agency boards compared with advanced economies. Econometric analysis suggests that, controlling for relevant bank- and country-specific factors, the presence of women as well as a higher share of women on bank boards appears associated with greater financial resilience. This study also finds that a higher share of women on boards of banking-supervision agencies is associated with greater bank stability. This evidence strengthens the case for closing the gender gaps in leadership positions in finance.

Further research is needed on the causal links, to identify specific mechanisms through which these stability benefits are achieved, and to understand the conditions that have facilitated or hindered the entry of women into leadership roles in banks and supervision agencies. This note underscores the need for better data to monitor gender gaps in finance. Improved measurement will help researchers better understand the drivers of these gaps and their effects on financial stability and other variables. It will also help in better designing policies to address those gaps.

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