When Sallie Krawcheck was hired six months ago as president of global wealth and investment management at Bank of America, she was besieged with e-mail messages from current and former Wall Street women celebrating her return to the fray.
Krawcheck had been forced out as head of a comparable unit at Citigroup in August 2008, a highly publicized departure. Hers has been the only comeback among the three top ranking Wall Street women removed during the financial crisis.
“I don’t think I set foot in a restaurant where some woman did not come up to me and thank me for getting knocked around and going back in,” Krawcheck, 45, recalled in an interview at Bank of America’s corporate office in New York. “It was unexpected and quite fantastic.”
The outpouring over Krawcheck’s return reflects deep anxiety among women in the financial industry that their career paths are narrowing even as business picks up again.
Women have always been drawn to finance in smaller numbers than men. But after nearly two decades of increased hiring and promotion of women on Wall Street, their ranks appear to be shrinking again.
The reasons are varied and unclear. But some finance executives say that as the workforce has shrunk overall in finance, there was bound to be a noticeable impact on women because their numbers were smaller to begin with. They also cite the big banks’ increasing reliance on trading, a part of the business that has been especially difficult for women to penetrate.
“The last 15 years before the financial meltdown was a period of gains for women,” said Linda Friedman, a partner at Stowell & Friedman, a Chicago law firm that represents plaintiffs in discrimination lawsuits.
But, she said, “in the down economic times, the greatest casualties have been women.”
Neither of the other two top-ranking Wall Street women — Zoe Cruz, former co-president at Morgan Stanley, and Erin Callan, former chief financial officer at Lehman Brothers — has resurfaced in a permanent position at a major firm.
Cruz declined to comment for this article, although she plans to start her own hedge fund, a person close to her said. Callan, through her lawyer, Steve Eckhaus, also declined to comment.
On Jan. 11, Citigroup’s Teresa Dial stepped down after a controversial tenure as head of its North American consumer banking unit.
Even though women are gaining ground on men enrolled in business school — they constituted 39.3 percent of full-time students in US business schools last year, compared with 34.1 percent five years earlier, the Association to Advance Collegiate Schools says — the percentage of those women headed for finance or accounting jobs is dropping.
Of those female graduates, 21.1 percent were pursuing finance or accounting last year, down 6.6 percentage points from 2005, says the Graduate Management Admission Council, a nonprofit group of business schools. The rate also dropped for men, but less drastically — falling 4.7 percentage points this year to 25.4 percent.
In the US, women also appear to be leaving finance and insurance faster than men. The number of women in those sectors declined 4.7 percent from the end of 2006 to the end of 2008, while the number of men fell 3.3 percent, the Bureau of Labor Statistics said.
Women rose on Wall Street in the boom years, when hiring was brisk and a series of lawsuits challenged the domination of men in the industry. Friedman recalled the class-action lawsuit against Merrill Lynch in 1996, when just six women were in charge at Merrill’s 140 branches — 4.3 percent of the total.
The share of women there rose as high as 25 percent in the years after the lawsuit was settled in 1998, Friedman said.
Selena Morris, a Merrill spokeswoman, said the company had more women running branches today than in 2000.
Women have maintained a strong presence in some areas in finance, including wealth management. Among the highest ranking in that specialty is Mary Erdoes, chief executive of asset management at JPMorgan Chase, a role that includes wealth management.
“They have moved up because they populate that business,” building client relationships well, Krawcheck said.
And a growing number of women run investment portfolios at college and prep school endowments. The Harvard endowment, the largest in the US, is managed by Jane Mendillo.
But in the heart of Wall Street, the aggressive environment on the trading floor is often cited as a reason that women are rare at the top. Others cite the dearth of women to aid in career networking.
Whatever the reason, ascending the ladder is much harder for women, said Bruce Greenwald, professor of finance and strategy at Columbia University.
“It is more difficult for women to come back because the environment in financial institutions is generally more hostile to women,” he said.
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