Why have the financial markets recently rallied so sharply in places such as America? If you ask a trader, they will cite “rational” explanations, such as US bank stress tests, an improved US economic outlook, and decline in eurozone concerns. But if you ask John Coates, formerly a senior trader at Deutsche Bank and Goldman Sachs, there may be another factor at work: hormones.
Since he left banking, Mr Coates has retrained as a neuroscientist at Cambridge university, where he has worked in a team analysing the bioscience of financial traders. And, as a forthcoming book will explain, Mr Coates and his fellow researchers now believe that unseen fluctuations in traders’ hormone levels play a crucial, but widely overlooked, role in finance; so much so in fact, that he wants regulators and bank managers to start tracking these hormone levels, as a matter of public policy.
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