It’s been a common cry recently, what with the financial system falling down around our ears, that we should be putting women in to run the banks. For it was men, with their idiot risk taking, that ran the system off the rails and as we all know, women are much more careful, not so driven by risk taking testosterone, and so would take fewer risks.

While it’s certainly an appealing story there’s not much evidence that it is in fact true. One point is that it isn’t male or female so much that drives risk taking. It’s male plus female that does. Mixed sex environments lead to greater risk taking by both men and women than single sex environments do for either.

So if we’re to take seriously the idea that we should be looking at the gender composition of the banks as an explanation (not that we should, but only if we do) then we would actually mark the movement of women into trading rooms since the 1980s as the important point. All male or all female trading rooms would not have taken those more recent risks: mixed ones did.

However, the basic idea that women take fewer risks than men isn’t really quite nailed down as yet:

In an experiment using two-bidder first-price sealed bid auctions with symmetric independent private values, we collected information on the female participants’ menstrual cycles. We find that women bid significantly higher than men in their menstrual and premenstrual phase but do not bid significantly different in other phases of the menstrual cycle. We suggest an evolutionary hypothesis according to which women are genetically predisposed by hormones to generally behave more riskily during their fertile phase of their menstrual cycle in order to increase the probability of conception, quality of offspring, and genetic variety.

The first point to take from this is that female risk taking is variable over the month: the second is that according to these researchers at least women take *more* risks than men, not fewer.

So perhaps we might want to put that matriarchal makeover of the financial system on the back burner for just a little longer?