Anastasios Triantafyllos | Pistiolis-Triantafyllos Associates

The Greek government is working hard and fast to reform its business environment and become more attractive to foreign investors. A key pillar in becoming more internationally competitive is reducing employment costs, and indeed labour law has changed more in the last 18 months than the preceding 18 years. Anastasios Triantafyllos discusses the potential for long-term reform in Greece.

Carlos Nicacio on tax in Brazil | Deloitte Brazil | Video

One of the challenges for businesses in Brazil is how taxes are levied by multiple levels of government, in different ways across its states and municipalities. The country offers many benefits to alleviate its tax burden – but companies can require a larger tax department than in other jurisdictions to navigate the complexities. Deloitte’s Carlos Nicacio outlines the issues, and how Brazil’s transfer pricing legislation differs from the OECD standards.

Walid Sidani, Shaikh W Ahmed, and Abdulla Al Naeimi | Abu Dhabi National Insurance Company

Recognised for the third time in the World Finance Insurance Awards, ADNIC has developed strongly thanks to its accelerated evolution plan and strong business pillars. Its c-suite officers discuss the increasingly competitive insurance market, getting closer to customers, and engaging with Abu Dhabi’s 2030 vision for a diversified economy.

Matjaz Zadravec on restructuring | Tus Holding | Video

Tus Holding has diverse interests across numerous sectors – operating in retail, entertainment and telecommunications, it is consistently in the top three market operators in Slovenia and growing its share fast. Matjaz Zadravec discusses the company’s recent financial restructuring, optimising its synergies and supply chain, and improving relations with business partners.

Charles Borg on banking in Malta | Bank of Valletta | Video

Malta is part of the EU, and as an international finance hub is closely connected to the continent’s economic difficulties; but it has emerged from the financial crisis relatively unscathed. Charles Borg explains how Malta’s conservative banking customs have supported the country’s resilience, and how the Bank of Valletta is working with local SMEs as a catalyst for internationalisation.

Rusal hit by net profit plunge of 91.7 percent

Rusal, the world’s largest aluminium producer by volume, said on Monday that adjusted net profit results for 2011 showed a plunge of 91.7 percent due to high debt servicing outgoings and lower aluminium prices.

The group posted a net profit of $237m compared to $2.87bn the year before largely because of a write-down in the value of its share in miner Norilsk Nickel. Figures were well below expectations, with Thomson Reuters’ analysts predicting $2.04bn.

Revenues for 2011 increased 12 percent to $12.29bn from $10.98 year on year. The company also announced it has replaced executive director Tatiana Soina with Maxim Sokov. The news comes just days after the company replaced chairman Victor Vekselberg with Barry Cheung.

Krishnakumar Natarajan and Rostow Ravanan | Mindtree

Before 1999, the Indian IT industry was an international posterchild for good corporate governance. Then the Satyam scandal hit, shaking the foundation of trust that investors and customers had placed in their overseas partners. Founded later that year, today Mindtree is one of the best software services companies in India, and has restored investors’ trust in the sector.

Rui Cartaxo on energy security | REN SGPS | Video

Energy security is one of the hot-button issues for countries around the world – and with Europe committed to a significant shift to renewables over the next decade it is a big concern across the continent. REN’s activities in the transportation of natural gas gives it a reliable source of electricity to supplement the less consistent contribution of wind power. Rui Cartaxo discusses the state of the European energy market and REN’s expansion plans.

Elham Mahfouz | Commercial Bank of Kuwait | Video

Commercial Bank of Kuwait has been driving the implementation of banking technology since its birth in 1960 – it was the first to implement ATMs, and recently upgraded its technological core. Elham Mahfouz discusses how CBK’s business has evolved since the financial crisis, and its commitment to remain a local bank: supporting local businesses while facilitating international investment.

Pedro Oller on arbitration | Oller Abogados | Video

Costa Rica has been opening and expanding its economy since the 1990s, enacting significant free trade agreements and reforming its laws to enable international integration. Costa Rica’s business disputes, however, are still being resolved offshore. Pedro Oller has worked with the country’s government to reform their arbitration laws: he discusses his vision to make Costa Rica an arbitration hub in Latin America.

Male crisis

The recent subprime, credit-crunching, sovereign-defaulting global crisis obviously had many causes, but one fact seems unavoidable: nearly everyone involved, at least at a senior level, was a guy.

In Iceland, for example, many believe that the banking collapse which originated there in 2008 had its roots in what Halla Tómasdóttir from Audur Capital called ‘typical male behaviour’. As she told Der Speigel: ‘It’s always the same guys. Ninety-nine percent went to the same school, they drive the same cars, they wear the same suits and they have the same attitudes.’

When David Hare wrote his 2009 play The Power of Yes, about the financial sector, he only had parts for two women in a total cast of twenty. He told the Financial Times: ‘that is probably about right. It’s shocking how few women there are in finance.’

Many alpha-male Wall Street traders remain convinced that testosterone is behind their financial success (or lack thereof). One result of the crisis, according to a recent report, is that increasing numbers of traders are approaching clinics to have their testosterone levels artificially boosted, in the hope that this will restore their edge. Sales of testosterone injections and pills are booming.

While few would dispute the overwhelming maleness of the financial sector, it is more controversial to suggest that this gender imbalance could have played a role in the crisis. But there is mounting evidence that gender does affect the way we make financial decisions, especially when it comes to things like risk.
For example, one paper entitled ‘Testosterone and financial risk preferences’ showed that testosterone levels are a predictor for risk-taking. Trader testosterone levels soar during booms and fall during crashes, which helps amplify price swings. Furthermore, high levels ‘may shift risk preferences and even affect a trader’s ability to engage in rational choice.’ Testosterone injections might therefore be too much of a good thing.

A 2001 study called ‘Boys Will Be Boys: Gender, Overconfidence and Common Stock Investment’ found that ‘men are more prone to overconfidence than women’ and therefore ‘trade more and perform worse than women.’ This finding appeared to be backed up by a 2009 report by Chicago-based Hedge Fund Research which found that, while women manage only about three percent of total funds, these fell half as much during the crisis as those managed by men, and also outperformed them over the previous ten years.

Of course, these studies are not making generalisations about all men and all women, or saying that women are in some sense better than men (I hope). They are only making empirical observations about patterns in behaviour, which have complex causes. But whichever way you look at it, it would seem logical for companies to recruit more women. As Lu Hong and Scott E. Page wrote in The Journal of Economic Theory: ‘There seems to be a strong consensus that diverse groups perform better at problem solving.’

So why isn’t it happening? One reason is that, as people such as Tómasdóttir have pointed out, there is a certain lingering prejudice against women in banking. Finance has traditionally been viewed as a male preserve, and a few fancy research reports in academic journals isn’t going to change that overnight.

Still, if markets were really efficient, then economic theory tells us that female traders would be more successful and over time would dominate. As Milton Friedman wrote, ‘There is an economic incentive in a free market to separate economic efficiency from other characteristics of an individual,’ and that should include gender.

To see what is wrong with this theory, one need only point out that it isn’t just finance which is dominated by men – it is also economics. The idea that markets are rational, efficient, and perfectly competitive is, we must admit, another typically male conceit which ignores factors such as industry norms and the complex social context (i.e. the fact that bankers are nearly all males).

Economic man
The prejudice against women applies not just to finance, but even to thinking about anything numerical – and its roots go very deep. In ancient Greece, mathematics was seen as an exclusively male activity. Aristotle, for example, barred women from entering his Lyceum. While he believed that women were capable of rational and deliberative thought, he described it as ‘without authority’. Many university departments did not admit women until the early 20th century. In C.P. Snow’s famous 1959 book The Two Cultures he added in a footnote that: ‘whatever we say, we don’t in reality regard women as suitable for scientific careers.’

In many ways, economics is an extreme case of this male dominance. Even today, female economists remain under-represented in the higher echelons of academia. It took until 2009 for the Nobel Prize in economics to be awarded to a woman, Elinor Ostrom, who is a political scientist and not an economist.

According to Linda Tarr-Whelan, author of Women Lead the Way, women need to attain a critical mass of 30 per cent in order to have serious influence, and most economics departments are nowhere near that level. It is therefore unsurprising that mainstream economics is characterised by a rather male feel.

Perhaps the most blatant example is the concept of rational economic man. The economist Julie A. Nelson notes that the characteristics of being ‘self-interested, autonomous, rational, and free to choose among different actions’ are considered in modern Western and English-speaking cultures to be associated with stereotypical masculinity, while the converse – ‘people who are dependent, emotional, and subject to decisions made by others or influences from the social or natural environment’ – are associated with stereotypical femininity. Based on this, rational economic man is best viewed as a projection of idealised male behaviour.

The result of this bias is that mainstream economic theory downplays things like emotions or human connectivity. This is a problem, since markets rely for their existence on emotions such as trust and confidence. Without trust there is no credit, and without confidence there is no risk-taking. And connectivity is what drives the herd behaviour behind surges and crashes.

It might be a while before they are handing out estrogen pills on Wall Street.

But to rebalance our economic system, a first step would be to recruit more women in both business and academia.

Glencore says $37bn deal “fair”

Glencore, the globe’s largest commodity trader, said on Monday that the $37bn offer for Xstrata is a fair deal, and is a “logical” next step for the two companies.

There was no indication that it was willing to improve its offer to win over hesitant investors.

Last month Glencore released estimated 2011 earnings together with the news it is to go ahead with the Xstrata tie up. Glencore’s net income was up 7 percent to $4.06bn.

The commodity trader is now offering 2.8 new shares for every Xstrata share it does not already own – an estimated 66 percent of the group.

Sara Friedman on trading education support | 4XP | Video

In addition to the high quality forex service one would expect of a World Finance recommended broker – low fixed spreads, ECN accounts, fund management programmes and fast execution – 4XP offers futures, commodities, shares, bunds and binary options. Sara Friedman explains 4XP’s strong offering, generous bonuses and trading education support.

Greece in selective default in spite of German bailout approval

Credit ratings agency Standard & Poor’s late on Monday declared Greece in “selective default” following its private sector involvement deal which will see bondholders take a 70 percent haircut on the net value of their bonds.

As part of the agreement an estimated €100bn will be wiped off Greece’s debt. The average maturity of creditors bonds will also be extended, allowing for reduced short term funding requirements.

The news comes in spite of Germany’s parliament earlier in the day approving a second bailout plan for the debt stricken country.