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pb273
Posts: 670
Joined: July 14th, 2002, 3:00 am

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August 11th, 2010, 2:17 pm

QuoteOriginally posted by: drews26I mean can CRO or whoever else force traders/PMs to exit positions if VaR or any risk exposure breaches the limit? Does Risk have any real power in HFs? One very senior Risk guy in a major bank once told me that the only purpose of having risk managers in a HF is to tell investors that they have a risk management group but Risk people have no real power. This guy worked in a bank his whole career but, as I said, is very senior (just below CRO), but I?m not sure whether what he said is actually true.Bang on right. Many funds even those with fully systematic processes where their main model integrates risk models/concepts also have separate risk management people, purely to show clients that they have an "INDEPENDENT" risk management. Pensions and insurance company investors come from a world where they require such things and hence this becomes a criteria. Nevertheless, the risk managers are paid quite well compared to the actual power. Can't see why should they complain. It's quite a cushy job.
 
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londoner
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Joined: January 28th, 2008, 2:52 am

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August 11th, 2010, 2:20 pm

QuoteOriginally posted by: ThinkDifferentQuoteOriginally posted by: EscapeArtist999QuoteOriginally posted by: ThinkDifferentQuoteOriginally posted by: KackToodlesis there any job for a C++ programmer that is NOT in a ghetto? LOL this guy is just too funny. what a clueless noob. Let's see.... 3 years experience, model validation, C++ programming 90% of the time. Total comp. 170K USD. Working hours: 9:30am - 6:15pm. Ghetto? )Dude that's less than first year FO quant!it is marginally less for some of the banks (although I know for a fact that some 1st year FO quants at JPM got around 150K last year). however I 1) have almost zero stress at work 2) get to see my family by the dinner time 3) don't have to worry about my ass being on fire in bad times. so far there were no precedents of anyone being laid off in mode val. I value my free time more than money and would rather have extra free hour per day than extra thousand bucks/month. ...anyway, my point was that it's hardly a ghetto job, neither it pays 30% of what FO quants get like KackDoodles said You seem to enjoy the model validation job! Do you need to do a bit of (applied) research? or you just implement the algorithms?
Last edited by londoner on August 10th, 2010, 10:00 pm, edited 1 time in total.
 
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twofish
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Joined: February 18th, 2005, 6:51 pm

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August 12th, 2010, 12:36 am

QuoteOriginally posted by: pb273Bang on right. Many funds even those with fully systematic processes where their main model integrates risk models/concepts also have separate risk management people, purely to show clients that they have an "INDEPENDENT" risk management.But for hedge funds not associated with banks, it doesn't matter much. If the hedge fund loses money, the bank pulls credit and the hedge fund dies. Happens all the time. The actual "independent risk management" is in the IB that extends credit to hedge fund.In IB's the risk people can and do force traders to exit positions, and they often sit in the front office so that they can do that.
 
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deepvalue
Posts: 918
Joined: April 25th, 2007, 6:08 am

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August 12th, 2010, 4:35 am

U'r BO ass will be fire at bad times and u will wind up in a lower paid job after looking for 2 years. Escape artist admits it-- your bo.
Last edited by deepvalue on August 11th, 2010, 10:00 pm, edited 1 time in total.
 
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ThinkDifferent
Posts: 659
Joined: March 14th, 2007, 1:09 pm

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August 12th, 2010, 2:22 pm

QuoteOriginally posted by: deepvalueU'r BO ass will be fire at bad times and u will wind up in a lower paid job after looking for 2 years. Escape artist admits it-- your bo.LOL sure.
 
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ThinkDifferent
Posts: 659
Joined: March 14th, 2007, 1:09 pm

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August 12th, 2010, 2:26 pm

QuoteOriginally posted by: londonerYou seem to enjoy the model validation job! Do you need to do a bit of (applied) research? or you just implement the algorithms?of course. implementation risk is just one aspect of the model validation. we also have to review the model (assumptions, math etc.), look at the calibration, come up with model limitations etc. Moreover, to assess model risk we sometimes have to review and implement alternative models (those that are not used at FO).
 
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twofish
Posts: 4944
Joined: February 18th, 2005, 6:51 pm

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August 12th, 2010, 9:41 pm

QuoteOriginally posted by: deepvalueU'r BO ass will be fire at bad times and u will wind up in a lower paid job after looking for 2 years. Ridculous. In the last blowup, it was the FO people that got axed. I know tons of traders and FO quants that got axed. A lot of them were *good* traders and quants, that just were in the wrong division at the wrong time. Conversely, I don't know of a single BO person that got axed.Also, the balance of power has shifted greatly in banks. Things are a *lot* more bureaucratic. To do *anything* nowadays, FO has to beg and plead with risk to let them do it. Risk is the way the government regulators controls the desk. In FO, you are "closer to the money", but in risk, you are much closer to God (i.e. the government regulators). The other thing is that banks are rebalancing. What that means is that risk salaries are increasing slightly, but FO is getting chopped big time.Banking has changed a lot, and the days of the cowboy trader are over. Maybe it will come back in a few years. Maybe having this sort of huge bureaucracy is a bad thing for the general economy. I don't know, but for the purposes of this discussion, it doesn't matter. Risk is where the power is, and it's where the money is, and it's likely to stay that way for a few years at least.
 
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Good2cu
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Joined: April 23rd, 2008, 3:30 pm

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August 29th, 2010, 12:07 am

QuoteOriginally posted by: twofish Risk is where the power is, and it's where the money is, and it's likely to stay that way for a few years at least.Power, maybe to some degree, but money, absolutely no, it's not, by any stretch of the imagination. Even power can vary dramatically from one bank to another. In my former shop RM was a weak-ass operation with a dozen hierarchical levels, where all the decisions were made by the CRO or one level below at most, and everyone else was ordered to just blindly execute.In my current shop the function has a strong mandate by the business' senior managers themselves to analyse the business in depth, engage the trading desk at all levels and bring as much challenge as needed. That said, it doesn't mean you're going to be paid well. You're in a bonus pool which is not great to begin with and typically very top heavy - much more so than in any revenue-generating function. So, even if you're a star performer, either you continuously demand more and establish a permanent perception of a "retention problem", and even in that case you're not going to see anywhere near seven figures before you're MD, or indeed you try to move to greener pastures. So, RM doesn't necessarily mean a POS dead-end job, but anyone who thinks that a gig in RM is a better career proposition than any revenue-generating function is delusional.
 
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KackToodles
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Joined: August 28th, 2005, 10:46 pm

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August 29th, 2010, 2:53 am

QuoteOriginally posted by: Good2cuQuoteOriginally posted by: twofish Risk is where the power is, and it's where the money is, and it's likely to stay that way for a few years at least. mraaaaahahahahahahaha. risk management = accounting = auditing = book keeping
 
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ThinkDifferent
Posts: 659
Joined: March 14th, 2007, 1:09 pm

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August 29th, 2010, 8:49 am

QuoteOriginally posted by: KackToodlesQuoteOriginally posted by: Good2cuQuoteOriginally posted by: twofish Risk is where the power is, and it's where the money is, and it's likely to stay that way for a few years at least. mraaaaahahahahahahaha. risk management = accounting = auditing = book keeping could some of the mods please ban this troll?
 
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photoguy
Posts: 36
Joined: June 25th, 2010, 2:06 pm

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August 29th, 2010, 7:12 pm

Oh, come on, it's not like he said anything bad enough to offend anybody with thick enough skin to be in the business. Limiting the number of voices is rarely a good option.
Last edited by photoguy on August 28th, 2010, 10:00 pm, edited 1 time in total.
 
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mrmister
Posts: 225
Joined: August 15th, 2009, 4:33 pm

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August 29th, 2010, 8:29 pm

QuoteOriginally posted by: photoguyOh, come on, it's not like he said anything bad enough to offend anybody with thick enough skin to be in the business. Limiting the number of voices is rarely a good option.Nobody is going to be banned. If somebody is offended by what they read here, they should not be here in the first place.
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