Does the gender diversity of boards of directors matter? A recent research report from Credit Suisse (click here) suggests that the presence of women on boards is correlated with better firm performance. This raises an interesting economic question: why should the presence of women on boards matter? Are women more empathetic with employees and therefore better managers? Are women better at selecting successful firms? Are successful firms able to have the luxury of having more women on their boards? Are women better at multi-tasking (a key skill for modern corporate managers)? Are women on boards so good at their job because they have been toughened up by constant male chauvinism on their rise up the corporate ladder? This subject would be a great PhD topic for someone! Click here to read an older post on this issue.
As an undergraduate, I was taught about the failure of Herstatt Bank in 1974 and Herstatt risk. This bank was only the 35th largest bank in Germany at the time so why would anyone be interested in studying its failure? Herstatt failed because of its involvement in risky foreign exchange business. When it closed its doors on 26 June 1974, counterparty banks (mainly in New York) had not received dollars due to them because of time-zone differences - this is known as settlement risk. The cross-jurisdictional implications of its failure resulted in the Bank for International Settlements setting up the Basel Committee on Banking Supervision and Herstatt's failure was a key reason for the establishment of real-time gross settlements systems, which ensures that payments between two banks are executed in real time. The Bank of England's Ben Norman has an interesting post on Herstatt over at the Bank's new blog ( Bank Underground ). As well as giving an excellent overview of