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What If Women Ran Wall Street?

While the Icelandic economy was decimated after a multiyear binge of borrowing and investing in real estate and other assets that plummeted in value, Audur Capital has turned a modest profit since it launched. The company philosophy: Only invest in things its managers can explain and understand. “It doesn’t make much sense to us to invest in something and try to make 30 percent in one year, only to lose 60 percent the next year,” Tómasdóttir says. Of course, to some, turning a modest profit is nothing to get excited about. “If you are a cowboy investor,” she admits, “we are probably not your place of choice.”

Tómasdóttir has conducted some academic research of her own. In 2004, she embarked on a doctorate, which she never finished. The working name for her thesis was “The Great Big Penis Competition: The Story of Mergers and Acquisitions in Iceland.” She explains: “The reason I called it that was—and I don’t want to be vulgar—but the kind of behaviors you have seen, have to be best described as a territorial pissing contest. It’s always been about who’s the biggest, who owns more, who’s the first on the richest-people list.”

Of course, not even the author of “The Great Big Penis Competition” would argue that all men are aggressive, egotistical, and stubborn—or that all women are conservative, rational, and levelheaded. And being reductionist about hormones and gender is a sure way to misjudge a complicated individual.

When I was talking to Sheila Bair, the chairman of the FDIC, about the testosterone research and its implications for the financial markets, the two men sitting in on our interview—Andrew Gray, her press director, and Jesse Villarreal, her chief of staff—burst out with horrified laughter, as if it were the most absurd thing they’ve ever heard. Bair responded more carefully. “With some of those academic studies, I can see what they’re saying, and I think there may be some truth to that, with the caveat that you should never categorize people,” she said. “Perhaps from a risk-management standpoint, having diversity and different perspectives and attitudes is helpful.”

While Bair is regarded in some circles as a prudent, risk-averse regulator who helped save the banking system, she’s made quite a few enemies along the way. She’s publicly feuded with Citigroup CEO Vikram Pandit, even pushing for a shake-up in Citi’s management. Meanwhile, Treasury Secretary Timothy Geithner has reportedly fought to push Bair out of her job.

Sitting in her carpeted Washington, D.C., offices, I ask Bair if she thinks she’s outspoken. “Am I outspoken?” she asks, laughing nervously. “I would say I’m direct.”

But don’t let her feminine nervous laughter fool you. “She was very aggressive, both in public and in private,” says a former Treasury official under Paulson. “And, you know, it had nothing to do with her gender.”