In this excerpt from Broad Influence: How Women Changing the Way America Works, author Jay Newton-Small looks at the new class of female regulators who came to power in the wake of the financial crisis, and investigates the research that suggests that women are less likely to take big—and potentially disastrous—risks than their male counterparts.

In February 2009, the national climate was one of anger: at Wall Street for the stupid risks that led to the near collapse of the financial system; at George W. Bush, the first MBA president, for his complicity in the mess; and at Washington for its uneven response. Congress was fruitlessly scrambling to figure out how to claw back $169 million in bonuses given by insurance giant AIG to its executives using taxpayer money, an embarrassing episode that only further enflamed populist tensions. And the administration was huddling on how best to rescue Citibank, one of the world’s largest banks, for the third time.

In the first and second Citibank bailouts, Federal Deposit Insurance Corporation chair Sheila Bair had argued for imposing tougher conditions on the firm, which she felt hadn’t done enough to shore up its messy finances. Bair was scheduled to join an emergency conference call on a Sunday in mid-March with Treasury secretary Tim Geithner and other regulators to decide how to move forward. She wanted Citigroup CEO Vikram Pandit and several of his top aides to go. She’d pushed for this before, noting that Pandit, an investment banker with little commercial banking experience—someone she viewed as a gambler with the bank’s money, instead of a protector of its depositors—helped lead to Citibank’s weakness. But now she was in her strongest position yet to oust him.

In the lead-up to the financial crisis, Citibank executives knowingly hid extensive problems in the mortgages the bank was securing, which contributed to the financial system’s collapse. Citibank would eventually own up to its mistakes, admitting guilt and paying a fine of $7 billion, one of the largest ever levied on a bank, to the Justice Department in July 2014. The cover-up by Citibank and other financial institutions masked the severity of the crisis until it was nearly too late.

Bair had been pushing to downgrade the FDIC’s main rating of Citibank, which other regulators worried would spook the market into selling off Citi’s stock. In order to avoid the downgrade, Bair was demanding that Citi fire Pandit, along with a laundry list of other conditions. Bair was later “flabbergasted” to learn in Ron Suskind’s 2011 book Confidence Men that Pandit had gone to Geithner before their scheduled call and asked to make his own deal with the Treasury. But that office, Bair later pointed out, had no say in the FDIC’s ratings.

“It was over the top,” Bair recalled. “I think they thought that that was going to be the way they could do a backdoor bailout. We just had profoundly different worldviews of how these kinds of problems should be handled. This wasn’t just gender; there were also different philosophies. There were a lot of complex things going on there, but I use Vikram going to Tim as an example: if men do not want to accept your position of power, then they will sometimes try to go to another man who they feel may have power over you to avoid having to deal with you.”

Bair went into the call thinking that her clampdown on Citibank was going to be successful—only to be blindsided by Geithner with a whole new proposal. “You just need to stand your ground and hopefully your colleagues will back you up and say, ‘No, you need to go talk to Sheila, that’s her job,’ but it doesn’t always happen,” Bair said with a sigh. In the end, they compromised. Geithner persuaded Bair to allow Pandit to stay. To address Bair’s concerns, Pandit brought in executives with commercial banking expertise to help Citi through the crisis.

The experience was a searing one for Bair, and it prompted her to push Congress to grant the FDIC more power when Congress rewrote banking regulations in the wake of the crisis. She persuaded President Obama to give the agency “resolution authority”—the ability to do whatever it saw fit to resolve the bank’s problems, including taking it over or closing it—over “too big to fail” institutions as well as the smaller banks the FDIC was used to dealing with. The Treasury and the Federal Reserve tried to water down the proposal by requiring their sign-off. Bair testified before the House Financial Services Committee that such a move would essentially destroy the FDIC’s ability to act on a failing bank. The chairman, Massachusetts Democrat Barney Frank, agreed and left the authority in the FDIC’s hands alone. So should there be another bank meltdown, the head of the FDIC won’t have to go three rounds with the Treasury on how to bail out a giant. “The markets,” Bair said, “must be convinced that there is no such a thing as ‘too big to fail,’ otherwise they will never stop taking crazy risks.”

Bair was one of a class of new regulators put in place to see that the bailout of Wall Street was done responsibly. Notably, the new top cops were women. Though Bair had first been appointed by George W. Bush, she proved so effective that Obama pointedly asked her to stay even after she offered her resignation. Bair was soon joined by other female regulators. Senate majority leader Harry Reid named Harvard Law School professor Elizabeth Warren to head the committee overseeing how Treasury spent the bank bailout funds. Reid also encouraged Arkansas Democrat Blanche Lincoln, a member of the House Banking Committee, to spearhead the reform of derivatives—financial products that derived their value from that of a bundle of underlying assets. A succession of women have led the Securities and Exchange Commission, which regulates the financial sector: Mary Schapiro, Elisse Walter and Mary Jo White. Three of the five SEC commissioners are women. Obama named Christina Romer his first chair of the Council of Economic Advisers and later appointed Janet Yellen to be the first female chair of the Federal Reserve in early 2014. Four of the five federal trade commissioners were women. Christine Varney and Sharis Pozen have headed up the Justice Department’s antitrust division. And Obama’s second attorney general, Loretta Lynch, took on Wall Street as the U.S. Attorney for the Eastern District of New York and vowed as AG to make the prosecution of white-collar crime her top priority.

The heart of the problem was risk, something mostly male Wall Street seemed to take irresponsibly and something the female regulators were sent in to mitigate. It’s a clichéd image: the straying reckless man and a woman at home holding things together. But there is some underlying truth in it. Neuroscience has shown links between risk taking and testosterone, which is 15 times as prevalent in men as in women. Many world leaders, from Bair to International Monetary Fund chief Christine Lagarde to British Labour deputy leader Harriet Harman, who was then Prime Minister Gordon Brown’s No. 2, to Japanese prime minister Shinzo Abe, became convinced that if more women had been working in senior Wall Street positions, the global financial crisis probably wouldn’t have happened. And many saw the crisis as a wake-up call for Wall Street to diversify its ranks.

“I do believe women have different ways of taking risks, of addressing issues . . . of ruminating a bit more before they jump to conclusions,” Lagarde said. “And I think that as a result, particularly on the trading floor, in the financial markets in general, the approach would be different. I’m not suggesting that all key functions and roles should be held by women. But I think that there would have to be a much bigger diversity and a better sharing of those functions and roles.” It was a call for critical mass in the global markets.

There’s a good deal of evidence that women are inherently risk-averse. Almost all—97 percent—of microlending is done to women in the developing world. Microcredit started in Bangladesh in 1983 and has spread across the developing world since. Development banks give out small loans to individuals or groups to start small businesses. Some men in those cultures were too prone to drinking or gambling away the funds, but women have proved themselves trustworthy enough to use the money for business and family. Most of the world’s biggest microfinanciers will lend only to women.

A 2001 study of 35,000 U.S. households’ portfolio behaviors found that women’s transaction costs were lower—meaning they shifted investments less and so paid fewer fees—leading to higher net returns on investment. A 2009 study by researchers at the University of Hannover in Germany surveyed 649 fund managers in the U.S., Germany, Italy and Thailand and found that female fund managers were “more risk averse and shy away from competition in the tournament scenario”—meaning women didn’t like the idea of kill-or-be-killed, zero-sum games. And a 2012 study of 7,000 fund managers worldwide, 36 percent of whom were female, found that women were more cooperative and aimed at “fair play.” The study found that women rated higher than men in 12 of 16 leadership competencies, including “displays high integrity and honesty,” “develops others” and “builds relationships.”

Iceland is an oft-cited lesson in risk and the power of women to mitigate it. Iceland’s economy collapsed in the 2008 worldwide financial meltdown. Much like the United States, Iceland invested heavily in bad debt and overleveraged healthy assets, but Iceland’s is a small economy. The tiny island nation of just 300,000 with a gross domestic product of less than $20 billion experienced the most drastic bubble of the downturn, with a huge boom followed by a devastating bust. Two women who were appalled by the unhealthy risks their male co-workers were undertaking founded Audur Capital, a financial-services company with the goal of incorporating “feminine” values in the financial sector. They avoided investing in what they knew to be distressed debt and were literally the only Icelandic company to emerge from the crisis unscathed. The crisis led to a wave of women being elected to office, including Premier Jóhanna Sigurdardóttir.

Having more women on the trading floors may even chemically dampen risky behavior. Two University of Cambridge researchers measured the levels of steroids, including testosterone, adrenaline and cortisol, in 17 male traders over an eight-day period at a London bank. The traders with the highest levels of testosterone in tests of their morning saliva were more likely to reap more profitable trades. When a male trader hit a six-day winning streak, making more than double his daily profit, his testosterone levels were up 74 percent. In studies of lab animals, testosterone has been shown to increase risk taking and fearlessness. The risk is that bankers and traders are training their bodies to create financial bubbles, according to researchers John Coates, a former Goldman Sachs and Deutsche Bank trader turned neuroscientist, and Joe Hebert. Biology shows that there is a “winners effect.” When two male lions fight for a mate, the winner maintains higher levels of testosterone while the levels in the loser drop, Coates wrote in his book The Hour Between Dog and Wolf: Risk Taking, Gut Feelings and the Biology of Boom and Bust. The bankers were compounding the winners effects: with each successful new gamble, their levels rose and they were prone to take bigger risks.

The presence of women—and the absence of other men—tends to reduce the men’s testosterone. Men who stay home with their wives and children have markedly less testosterone then men who are single or don’t spend much time caring for children, studies show. Coates began his research after observing his fellow traders in the 2001 dot-com bubble. “Normally a sober and prudent lot,” Coates told Bloomberg News, “traders were becoming by small steps euphoric and delusional.” They were “overconfident in their risk-­taking, placing bets of ever-increasing size and ever-worsening risk-reward trade-offs.”

Then came the crash, and here too, the researchers found, male hormones compounded the bubble effect. The crash resulted in anxiety, which produces high levels of cortisol in men, leading to “clouded judgment . . . You tend to see danger everywhere rather than opportunity. In that situation you don’t do anything. People get paralyzed by that fear. [It] takes over so they are no longer thinking rationally. They are no longer doing the things that they should be doing to make money,” Coates said. “I think [testosterone and cortisol are] partly responsible for market instability.”

A separate 2012 study found that women’s bodies react to high levels of cortisol broadcast by men by secreting more oxytocin. Oxytocin “promotes nurturing and relaxing emotions,” the study said, and is “positively correlated with the willingness to cooperate and the expectation that others will cooperate.” In other words, it’s the antidote to cortisol. More women on the trading floor could biochemically end bubbles. They would reduce testosterone and blunt the upswings and mitigate cortisol and the panic freeze that happens in the downswing of bubbles.

In the immediate aftermath of the global financial crisis, a panel of high-powered bankers gathered at the World Economic Forum in Davos, Switzerland, and debated whether, if Lehman Brothers had been Lehman Sisters, the investment giant would still have failed. In the end, they agreed, Lehman Sisters would’ve made much less money during boom times but would probably still be around today.

Excerpted from Broad Influence: How Women Are Changing the Way America Works. Published by Time Books, an imprint of Time Inc. Books. Copyright © 2016 by Jay Newton-Small. Available wherever books and eBooks are sold.