FX: Battle of the sexes

Farah Khalique
Published on:

Leading women in FX talk about breaking the glass ceiling as the latest scandals reinforce the macho stereotype of the industry. Could the rise of electronic trading influence gender dynamics?

FX female trader-R-600

Another month over, another round of FX scandals. This month has seen Barclays’ $150 million fine for abusing its last-look policy and the New York Attorney General’s decision to investigate FX spoofing at leading brokerages.

The bad news keeps flowing, reinforcing the worst stereotype of the world’s largest market as a clubby, male-dominated high-stakes playground.

FX has a "clubbish" reputation, admits Alex McDonald, chief executive officer of the Wholesale Markets Brokers’ Association.

Foreign exchange is unique in that it is largely a bilateral, over-the-counter market – it’s a relationship game. Exchange-like platforms exist, such as multi-bank portals like FXall and 360T, but big ticket trades still get worked through the leading dealers.

The cringeworthy details of how traders at major banks colluded to rig FX benchmarks only solidified the clubbish reputation, thanks to tight-knit groups such as The Three Musketeers, One Team, One Dream and The A-Team.

Jane Foley, Rabobank
"Without a doubt, the FX scandals have tarnished the image of the industry," says Jane Foley, senior currency strategist at Rabobank. "Working in finance is not as attractive to young people as it once was."

Foley has worked in FX for almost two decades. She initially worked in the asset management industry, analysing fixed-income markets after graduating in economics, before transitioning to FX markets in 1997. She has worked in FX research at Barclays investment bank and at Gain Capital.

"When I first started out, it was usually assumed that I was a secretary or an assistant and certainly not an economist," she says.

People no longer make that assumption, says Foley, but even though inappropriate jokes and overt sexism are a thing of the past, she believes sexism still exists in other forms.

"Women are always a minority in FX," she explains. "In every team I’ve worked in, I’ve either been one of a couple or the only one. I would have thought by now those ratios would have altered more than they have.

"While perhaps there are more women in finance overall, it is very clear that women are still a significant minority in FX."

That much was evident at this year’s TradeTech FX conference, held in London. Only three of the 45 speakers listed on the schedule were women – a measly 7% – and that was just on the first day of the conference.

Are you in the club?

A former trader, who now works in digital transformation of financial services, sums up spot FX over a pint: "Laddish, simplistic, blunt, brutal, male-dominated."

"Women who come into finance tend to be smart, so why would they want to do that job?" he muses.

Diversity drive

Lisa Hinton joined the FX industry immediately after graduating from university, working at Goldman Sachs for seven years until 2007. She now works in recruitment at City search firm Shadowhound, which recruits across global markets, risk, legal and compliance for buy- and sell-side clients.

"I was very interested in macroeconomics, economic news and politics, so foreign exchange seemed the most appropriate choice," she says. "I started in FX sales straight away – my direct report was a woman and there were quite a few of us."

Hinton says the ratio of male to female was not evenly matched, but there was still good representation in mid to junior roles such as associates and analysts.

Diversity on the trading floor is now discussed at senior levels within banks, she adds. As a recruiter into the FX industry, Hinton is asked to show a "diverse range of candidates" for roles.

"There is no good reason why women can’t be traders, but I think the problem historically is that there was a tendency for women at junior levels to get directed to sales," she says.

Research published earlier this year by trading profiling company Financial Skills found that women can make better traders than men. Their study found that women took less risk, lost less money and were less likely to break trading rules; admirable qualities in a post-financial crisis trading environment.

However, the real issue, as is the case generally in investment banking, is the lack of women in senior management. Motherhood is one factor.

Flexitime in FX

Flexible hours might be the norm for working mothers in other industries, but this is simply not the case in the fast-paced world of FX. Work-life balance at Goldman Sachs was not an issue for Hinton – she didn’t have a family at the time and could commit to the long hours.