Well, it looks like the solution to financial crises isn’t regulation after all, it’s women, according to Bloomberg.
Citing a new study done by Ed Roberts and Carlos Cueva, the article says that because trading is dominated by young, highly-competitive men full of cortisol and testosterone, the markets are more likely to be destabilized due to the hormones’ effect in decision-making.
Apparently, elevated levels of cortisol in men “were connected with trading frequency, mispricing and overall price instability,” as well triggering aggressive and risky behavior. High levels of testosterone meanwhile can end up “resulting in self-confidence that can produce more success and more testosterone,” leading to irrational exuberance and ultimately, market crashes.
High levels of both? That’ll move you pretty far away from optimal risk-taking, according to Roberts.
Women meanwhile have the benefit of having estrogen and other hormones to regulate cortisol and testosterone, leaving them impervious to their effects and making them less likely to take any chances. Just like Yellen.
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