Study: Unless Wall Street Hires More People of Color, Nation Could See Another Financial Catastrophe
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Posted By: How May I Help You NC on November 24, 2014 Posted by Taylor Gordon A new study suggests that the lack of diversity on Wall Street could land the entire country in more financial hot water by creating more dangerous financial bubbles. Financial bubbles tend to appear when traders overvalue their assets—stocks, bonds and other finances are assumed to be worth more than they actually are. When that bubble bursts, the results have the potential to create economic catastrophe. Prices drop exponentially, people lose unusually large amounts of money and the ensuing panic leaves a nation’s financial sanity hanging in the balance. It’s happened here before and t’ll happen here again—unless Wall Street increases its workforce beyond the sea of white males who currently predominate, according to a recent study conducted by six professors and published on Monday by the Proceedings of the National Academy. The Wall Street being dominated by white men means the group of homogenous traders are considered more likely to create a dangerous financial bubble than if people of diverse backgrounds came together to trade. A 2013 study revealed that more than 80 percent of all the managers on Wall Street are white and more than half are men, according to the Huffington Post. The study said it’s all about how comfortable people tend to be with one another and how much trust people put in others who remind them of themselves. “Traders in ethnically homogenous markets are significantly less accurate, and thus more likely to cause price bubbles,” the report said after revealing that “pricing accuracy is 58 percent higher in diverse markets.” Continued Reading: http://atlantablackstar.com/2014/11/20/wal... If you enjoyed this article, Join HBCU CONNECT today for similar content and opportunities via email! |
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How May I Help You NC
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