Increasing diversity at Central banks: From being an old boys club to cultivating younger people, women, and minorities…

Prof Paola Subacchi in this Apr-2018 piece laments lack of diversity at central banks and their thinking.

She says most advanced economy central banks are like old wine in a new bottle. They just wish to continue legacy left behind by their predecessors.

Yet, even as central banks face important transitions, the choices of their new leaders have reflected a desire for continuity. Most obvious, Kuroda has been confirmed for another five-year term at the BOJ, and Zhou was replaced in March by his own deputy governor, Yi Gang. Even Yellen’s successor, Jerome Powell, will probably amount to more of the same.

ECB is in a different territory though. The successor to Draghi will be a contentious issue given the politics of the region:

Perhaps the most profound shift will happen at the ECB, where four top posts will need to be filled by the end of next year. The recent nomination of former Spanish economy minister Luis de Guindos to serve as ECB vice president offers some clues regarding what to expect.

In particular, the choice of a Spanish vice president (which in Guindos’s case represents a break with the tradition – intended to protect central-bank independence – of not appointing politicians) suggests that the next president will come from the northern eurozone. Of the eurozone’s three largest economies, only Germany has never held the presidency. If the presidency goes to a German, that German will most likely be Bundesbank President Jens Weidmann.

A monetary hawk, Weidmann will struggle to win southern countries’ support. Moreover, his nomination will trigger the resignation of another German, Sabine Lautenschläger, the only woman on the ECB’s executive board. The prospect of an exclusively male board – not to mention the fact that no woman was even short-listed for the presidency – will not go down well with the European Parliament.

The European Parliament’s preference for greater gender parity is surely welcome, though it is probably based more on a desire to avoid criticism than a genuine commitment to diversity.

We need central banks to move away from the old boys club:

And, in fact, with their selections for the top jobs, all central banks are failing in this respect, even though diversity is now viewed, in many institutional contexts, as an indicator of good performance. In short, central-bank leadership remains an “old boys’ club.”

As we enter a new era for monetary policy, we should be seeking to overhaul central-bank leadership in a more fundamental way. The lack of diversity among candidates for the top jobs suggests that the selection process is far too narrow and inward-looking. Central banks ought to be cultivating younger people, women, and minorities, in order to broaden the range of approaches, skills, perspectives, and expertise that effective monetary policymaking will require in the future.

Real change eventually will come. But for now, in terms of both policy and personnel, it’s mostly old wine in familiar bottles.

This is quite true. Central banking indeed is an old boys club with most members educated at similar universities/colleges (read Eastern Coast in US).

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