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www.efinancialcareers.com/students | Careers in Financial Markets 2014
33 career insight balbir bakhshi
MD, Chief risk officer for UK entities, Credit Suisse
Balbir has an MSc in Finance from Brunel University gained in 1993. He joined Credit Suisse in 1995.
Risk presents you with a diverse range of challenges, which is one of the best things about working in this area.
The importance of risk management in investment banking has increased, and that is partly due to lessons learned from past crises, but also because of the natural evolution of governance and oversight within the sector. Risk is now at the centre of how banks determine their strategy and capital allocation, and my role brings that all together for Credit Suisse in the UK.
I’m responsible for ensuring that appropriate risk controls and governance are in place to avoid losses in excess of the bank’s tolerance, and to meet regulatory
requirements related to risk management. This involves having a strong understanding of the businesses that operate out of the bank’s UK entities. It also means developing and maintaining risk models and frameworks to measure and help manage those risks, and working with the bank’s board of directors to work out our level of risk tolerance.
As well as sitting on leadership committees within the bank such as the Risk Division Management Committee, where I would raise awareness of the key risk issues for Credit Suisse in the UK with the risk management leadership team, and the UK Investment Banking Executive Committee, where we discuss risk issues that I feel need the attention of management in the UK, I am also heavily involved in day- to-day risk management. For example, today, I reviewed an equity
capital markets transaction that our banking team was evaluating. Specifically, I was assessing the transaction in relation to the risk of loss and impact on the bank’s capital base.
Risk presents you with a diverse range of challenges. As well as looking at the bank’s overall risk appetite and strategy, I deal with governance issues, risk processes and the IT supporting it. I also feel like I’m making a real impact.
Risk management is a technical discipline, and it helps to come from a mathematical background. However, there are also opportunities for those who have studied a diverse range of subject areas, depending on the function, and it’s important for any graduate to understand the different roles and where your skills might fit.
Anti-money laundering – stopping money laundering (where the financial proceeds of illegal activities are given the appearance of being legitimate).
Pay and bonuses
Salaries have been slowly rising within compliance and risk management in line with investment banks’ increasing headcount in this area. A global head of compliance can expect $250-525k, according to figures from Robert Walters, but salaries for analysts and associates usually come in at $60-80k, rising to $120-195k for vice presidents.
Skills sought
Perhaps slightly surprisingly, among the key attributes banks look for in their compliance and risk recruits are good communication skills and an ability to build relationships. Employees in this area are becomingly increasingly central figures within the organisation, and an ability to effectively explain complex issues to people elsewhere in the business is key.
“Graduates need intellectual curiosity, the ability to interpret information quickly, attention to detail and good communication skills,” says Charles Eve, head of compliance, EMEA at Goldman Sachs.
Risk managers often need to make difficult decisions and may ruffle a few feathers, particularly with traders who feel they should be able to increase their risk tolerance. In practice, this means having a keen eye for detail, and questioning perceived wisdom within the organisation – and speaking out when you know that something is wrong.
pay and bonuses
Market risk salaries ($k) Country
UK US
France
Germany Singapore Hong Kong
1-3 yrs’ exp. 5-7 yrs’ exp. 7-10 yrs’ exp. 45-84
76-115 60-100
Unavailable Unavailable 40-70 58-93
Source: Robert Walters (figures converted to US$)
175-250 78-105 52-100 70-110 90-142
100-130 250-500 111-160 100-170 110-240+ 142-195
“Compliance in recent years has become a key function for the investment banking industry. It demands high standards and a high level of accountability,” says Eve. “We look for analytical individuals with excellent project management skills and a keen interest in financial markets, products, and securities laws and regulations.”
Risk management is a technical discipline, so graduates often have to come armed with applied mathematics skills, an understanding of differential equations and financial modelling. They have to apply this to a real-life situation though, so banks also look for keen problem- solving skills.
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