Sunday, March 15, 2009

Women's Issues: Women taking control of Iceland's banking system

By Lowana Veal - IPS

Republished permission Inter Press Service (IPS ) copyright Inter Press Service (IPS) and

REYKJAVIK, Mar 14 (IPS) - Iceland’s new Prime Minister Johanna Sigurdardottir is determined to reverse the country’s disastrous economic slide and bring its banks on track after they crashed last year. She has appointed a woman, Anne Sibert, to the Central Bank of Iceland’s Monetary Policy Committee.

The three main business banks - Landsbanki, Kaupthing and Glitnir - were nationalised straight after the collapse in October 2008. New people were brought in as CEOs, two of them women - Elin Sigfusdottir at Landsbanki and Birna Einarsdottir at Glitnir.

Although the chief of Kaupthing was male, Finnur Sveinbjornsson, at the end of last month, its five-member board of directors was all female, with Hulda Dora Styrmisdottir at the helm.

At the Central Bank of Iceland, the three-member Board of Governors has also seen changes. One of the prime minister’s first tasks was to try and get the three men to resign. One volunteered to leave while another said that he would do so by Jun. 1 - which was not acceptable, and the chair, David Oddsson, refused to go because "there is a job to be done in the bank". Oddsson considered it his responsibility to clear up the banking mess and bring the country back to a stable footing.

As a result, the Social Democratic Alliance (SDA)-led government - 50 percent of its ministers are women - changed the law in late-February to create two new posts that require academic credentials in economics. Unlike Oddsson and his predecessors, whose appointment were political, the new posts will be advertised.

Meanwhile, when it became apparent that the law would be passed, Oddsson and his colleague decided to leave the bank.

But the shake up at the top has not yet perked up Iceland’s banking sector.

Since the privatisation of the banks in 2003, banks have been expanding their corporate profile. Large Icelandic companies like Baugur have spread into Europe, buying up retail chains in Britain (Mosaic Fashions) and Denmark (Magasin de Nord), while the banks opened branches in Luxembourg for wealthy customers.

A survey done by the Nordic knowledge company Capacent last May, that only made its way to the media in mid-February, showed that there are now far more men working in banks than before the privatisation. Not only that, but the men who have been recruited are young and highly educated but with little experience.

The ratio of women to men had come down to 60:40 as compared to earlier when 75-80 percent of bank personnel were female. Twenty-five percent of men were older than 45, whereas 43.6 percent of women were over 45 years. And 41 percent of bank workers had been in their jobs for five years or less.

However, Fridbert Traustason from the Confederation of Icelandic Bank and Finance Employees says: "I personally don’t think that inexperience had much to do with the crash. Rather, it was risk-seeking on the part of the owners and a poor legal framework, together with a shortage of rules and a lack of liquid assets the world over, that brought the investment part of the banks down. The rest followed."

Women are generally thought to be more careful with their money, wrote Social Affairs Minister Asta Ragnheidur Johannesdottir in the daily, Morgunbladid, on Mar. 8. "This has been verified by research, which has also shown that there is less likelihood that companies with women in charge land in serious arrears. An extensive Finnish research study showed that companies under the management of women yielded 10 percent more profit than companies managed by men."

Economic slowdown has meant that it is not only bank workers who have lost jobs. Rising unemployment has become a major welfare issue for the new government. Lara Bjornsdottir, head of the welfare department at the Ministry of Social Affairs, says her ministry has launched a "welfare watch’ together with other ministries, municipalities, the trade unions, the Confederation of Icelandic Employers and the voluntary sector.

"Certain groups will need to be prioritised in terms of actions and financial support. These include children and young people, young families with children and those who were worse off before the crisis began … We will be particularly looking at the unemployed and foreigners who do not have a wide support net," she explains.

The Social Affairs Ministry has also set up a working group which will evaluate the particular effect of the state of the economy on gender.

Bryndis Isfold Hlodversdottir, the chair, told IPS: "We can see immediately when unemployment figures are examined that the great majority of those who are registered as unemployed are men from the construction industry, tradesmen and labourers."

She continues: "We also know that the cutbacks in the public service will mostly affect women as they represent the great majority of state and municipal employees. Our role is to analyse the effect of governmental and municipal actions and come up with proposals like increasing the number of jobs for the benefit of both sexes."

What are the views of the general public on the current situation? Book-keeper Gudrun Asgeirsdottir speaks for many when she says: "The gender balance in the new government is very positive, although I would have perhaps preferred some of the women to be different. (However) the economic measures are taking too long. They (the SDA-led alliance) need to get these matters through as soon as possible."

For two years running, Iceland - with a population of 319,000 - has come fourth in the World Economic Forum’s Global Gender Gap Index. It will be interesting to see if it improves on this in 2009!
Published by Mike Hitchen, Mike Hitchen Consulting
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