Can anyone in risk talk about why they chose risk?

[Christopher lee]

I'm curious as to the pro's and con's of working in risk at investment banks. I know a lot of people complain about lower salary compared to the front office, but are there any other perspectives you have? Thank you

 

[yetanotherquant]

http://dealbook.nytimes.com/2013/04/03/uncovering-the-human-factor-in-risk-management-models/?_r=0

"Regulators have reduced risk managers to box checkers, making sure they take every measure of risk and report it dutifully on extensive forms"

And yes, salaries are lower than in the FO but the work-life balance is better and the job is safer.

 

[Ken Abbott]

http://dealbook.nytimes.com/2013/04/03/uncovering-the-human-factor-in-risk-management-models/?_r=0
And yes, salaries are lower than in the FO but the work-life balance is better and the job is safer.

Not necessarily, not necessarily and not necessarily.

 

[yetanotherquant]

Not necessarily, not necessarily and not necessarily.

But generally, generally, generally, it is so
Of course deviations do exist.

@topicstarter. do have a look at Ken's reading list

 

[vertigo]

risk management is a general term. it is like asking someone what are the pros/cons of doing sport... well, the nature of tennis is very different to that of soccer....

pros

• its easier to get into risk management than into trading, see the two links below

CityJobs Search Results [98 results]

CityJobs Search Results [8 results]

• you learn about the markets in different & useful ways.
• you usually work on varied tasks.
• with strong(er) regulation coming up (basel 3), risk managers will have their hands filled with work. its a busy job.
• you talk to different people in different areas of the company.
• its not consulting.

cons

• the models in risk management are crap. laughably bad.
• theory/practice imbalance: too much theory when more practice is needed and... too much practice when more theory is needed. [people who know only practice never shut up, people who know only theory take longer to deliver.] this imbalance doesn't exist in front office.
• dependancy on senior management, i.e. sometimes you will be a slave.
• the systems used are old & really really really really crap.
• the environment is bureaucratic, boring and sterile. [as a corollary of this you can deduce that it's better to work in front office]
• not an exciting job. very boring.

summary
risk management is like living in a nursing home: it's okay until you look outside the window and see the crazy kids running around taking all the risks and doing stuff. in the same manner, trading is like living in a jungle. the question is if you prefer to live in a nursing home or in a jungle.

i'll put in my personal view: one week in trading will make you learn more about markets than 50 years in risk management will. risk managers are the people who tell you how to quantify risk but have never taken risk themselves. how stupid does that sound? companies need slaves to comply in order to comply to regulators. senior risk management are a catastrophe - they don't even know how to quantify risk and they rely on their subordinates. if you actually want to understand risk, then risk management is not the job for you. nor is any job where you sit behind a desk and take no action. your job is to ultimately report how much money the company should hold in case armageddon breaks loose.