Can bankers' irresponsible behaviour be blamed on their hormones?

By Rupert Parry

I would hate to be the one making excuses for those corporate baboons whose stupidity and greed have caused global economic devastation. But new research suggests young male bankers may be driven to engage in risky behaviour by their raging hormones.

In his book, The Hour Between Dog and Wolf, Wall Street trader turned Cambridge neuroscience scholar, John Coates, explores the relationship between financial bust and the male hormonal cycle.

Testosterone increases aggression, inflates confidence and gives all male animals a boost of strength to reduce fear during violent competitions. Another hormone called cortisol is also released during highly stressful situations, and is responsible for the feelings of anxiety and sensing imminent danger in the ‘fight or flight response’.

Coates presents compelling evidence that shows how the laws of financial boom and bust mirror hormone levels in male traders. During winning times, testosterone levels sky rocket, causing excessive risk-taking and dangerously inflated confidence, which can only lead to hefty misjudgement and mistakes.

When failure inevitably comes, a transformation of the young male traders occurs and they begin to grieve in a widespread “hormonal hangover” caused, according to Coates, by increased levels of cortisol.

The psychologically bruised and battered bankers lie low for a while after financial failure, wallowing in a collective depression. With low appetites for risk and high levels of anxiety, they refuse even safe trades due to unrealistic fears of future failure, explained the former Wall Street insider.

It’s bewildering to think how these greedy young men—so narcissistic and irresponsible—are in positions where their actions have global ramifications for us all. They are risk takers with everything to prove; it’s obviously a recipe for disaster.

Although it is a biologically sound argument to suggest banker’s hormones are responsible for their reckless behaviour, I don’t think anybody (particularly those in the wrong) should see it as an excuse.

Using this same argument a woman could commit a brutal murder, blame it on her premenstrual syndrome (PMS), and expect to avoid punishment because technically she wasn’t in control of her actions.

We all have hormones and are driven by them, to some degree, to behave in certain ways. But I think as humans we should be capable of acknowledging risks and having the foresight and empathy not to go ahead with actions that have high chances of causing distress for a lot of other people.

If we couldn’t do this, we might as well be living in a primitive hierarchical society dominated by savage alpha males. I’d like to think we developed a bit more control over our hormones during human evolution!

So the question remains: if it is true that these banker’s are innocent slaves to their devilish hormones, and this is what compels them into acting irresponsibly, what can be done about it? The most obvious (and quickest) solution would be to castrate each and every one of them so they can escape the reigns of their biochemical masters. But I think we might come across a few ethical issues here.

Another option, though less extreme, is to allow more women and older men into the trading game to diffuse the tension. Putting a group of young and stressed men together in a high-pressure environment, will only ever lead to chaos.

Things must change in the corporate world to avoid the “dog turning into wolf” scenario from happening over and over, time and again. The consequences are just too devastating and widespread.