Sex and the markets

City bankers 'regularly offer prostitutes to clients'

Financial firms often hold meetings in lap dancing clubs, according to evidence to the Treasury select committee

Kat Banyard of the Fawcett Society told the Treasury select committee that city bankers' clients are often invited to meetings in lap dancing bars.

City bankers entertain clients and try to generate business by offering trips to brothels, MPs heard today.

Kat Banyard of gender-equality pressure group the Fawcett Society told a Treasury select committee hearing into women's role in the City of London that there was a growing trend in the City to use prostitution to entertain clients.

"We took extensive evidence from individual women who said it was becoming frequent for meetings to be held in lap dance clubs, and I also had women speak to me and say that prostitution was being used in client deals or in ways to generate business – and that all of this culture created a very hostile environment, as you would expect, for female employees of those firms," she said.

One former City worker who gave evidence to the Fawcett Society said that while working for a top international investment bank in the City, she witnessed a senior manager looking for a brothel to entertain some Russian clients. "I was out drinking with some guys in my team when a very senior guy came over," she said. "He asked if anyone knew of a good brothel in Edinburgh. He said he had some Russian clients coming over and he wanted them to sign a multimillion-pound deal."

She added that when she worked in the Tokyo office of the same company, her London-based colleagues would often bring British colleagues over to Japan for "sex trips", where they would tell the company they were introducing clients to Japanese firms, but were actually visiting a number of seedy sex clubs.

"It's a deeply troubling problem that needs to be discussed openly," Banyard said. "If we're going to get more women into those institutions we need to change the culture before that happens."

The committee launched the investigation into women's role in the City as part of its attempt to prevent another crisis. There will be two more hearings, during which more evidence will be taken from people such as Harriet Harman, the minister for women and equality, and Trevor Phillips, the head of the Equality and Human Rights Commission.

But the select committee inquiry itself raised a few eyebrows on its launch in July as it emerged that only one of its 14 members would be a woman.

Former Bank of England policymaker Charles Goodhart, who is now professor emeritus of banking and finance at the London School of Economics, told the committee that the worst financial crisis since the second world war could have been prevented if more women were on the boards of major companies. "Women tend to be more cautious and have a longer term outlook. I think that men can be more aggressive and prepared to take larger risks," he said. "There would have been less likelihood of the financial crisis if we had a larger number of female chief executives in the financial sector."

He said that there were "remarkably few" female chief executives in the financial sector and that it is "a great pity". "I think that the longer term and cautious tendency that women have and less of the alpha male would be beneficial."

Nichola Pease, who runs the fund manager JO Hambro, told the committee that equality legislation in Britain was preventing women from getting the top jobs in the City. She said that many firms were scared of hiring women because penalties for successful sex discrimination claims were unlimited. Another factor that put companies off employing women was that women in the UK could take up to 52 weeks of maternity leave, compared with just 12 weeks in the US.

"A year's maternity leave is too long, and sex discrimination claims that run into 10s of millions of pounds are ridiculous," she told the committee.