THAT'S MEN:Testosterone is behind good strong trading so our bankers need a jab or two, writes PADRAIG O'MORAIN
WE MAY not have enough money to stimulate the economy but if we could afford free testosterone jabs for male bankers, we might get things going again.
You may recall, somewhere around last November, a news item floating across your consciousness about a link between testosterone and market trading.
The Obama euphoria was still in full flight and we had Christmas to look forward to so we may not have paid much attention.
The testosterone story was based on research by a former market trader turned neuroscientist called John M Coates and a colleague Joseph Herbert. Dr Coates wondered if the irrational, euphoric behaviour he had observed in traders in his sector of the market could be explained by testosterone levels.
Almost all the traders he saw behaving this way were men. Women have only 10 per cent of our levels of testosterone so they don’t get to have as much fun.
When he became a neuroscientist at Cambridge University, he measured testosterone and cortisol levels in traders over time. He found that traders in a rising market had high testosterone levels which seemed to fuel aggressive levels of trading accompanied by euphoria. When markets fall, the researchers found, high testosterone levels give way to high levels of cortisol.
Cortisol is linked to stress, fear, that sort of thing. The ideal situation is to switch between one and the other. Testosterone gets you going and cortisol brings in a note of caution.
The trouble with euphoria and also with higher testosterone levels is that they are linked with poor decision making. People in a state of euphoria are more likely to take stupid risks. Equally, if you boost men’s testosterone levels by showing them, say, photos of pretty women, the men with the highest levels of testosterone are easier in experiments to fool into making poor business deals.
I don’t want to give testosterone a bad name. Business people tend to have higher levels of testosterone than those who are not business people, so testosterone helps make the world go around.
And it’s working away there under the hood all the time. As I’ve written here before, single men have higher levels of testosterone than married men. Married men with kids who spend lots of time with their family have lower levels again.
This, I presume, is nature’s way of sending single guys off in quest of mates. Even being in the same room as a good looking woman raises men’s testosterone levels.
To check if you’re a high-testosterone chap, compare your ring finger to your index finger. The longer your ring finger compared to your index finger, the higher your level of testosterone.
Now our bankers are in a testosterone slump. They got caught in a euphoria that disabled their capacity to assess risk. We wait for bankers to have the confidence to lend money and take risks again. But if this theory is right, and I believe there’s something in it, these guys are drowning in cortisol and they view the world through a lens of fear and anxiety.
How would you get them out of this? Well, you’ve got to get their confidence up. But the confidence comes back only after they take successful risks, not before. Then the testosterone starts to rise again and we’re off.
That’s why it’s probably not a good idea for members of the public to dish out abuse to bank staff, as some are doing. All you’re doing is demoralising people who will become even more afraid of loaning you money.
But when the boys take a few risks that work out, and the testosterone starts flowing again, we might begin to see those green shoots of spring that we all long for.
Then, at some point in the future, a run of successes is going to fuel another surge of punch-the-air euphoria.
That’s when you need steely eyed regulators to cool things down. Maybe what we need to do is to put low-testosterone women in charge of regulating the system.
Then, when the boys lose the run of themselves again the women, like Nanny 911, can send them to the naughty step to cool down.
And if that seems very stereotypical then I’m sorry, ladies, but you’ll just have to blame it on the testosterone.
Padraig O’Morain is a counsellor