Taking a general global view it is clear that the health of China, the world’s second largest economy, is in some degree of jeopardy, a situation made only more severe by the threat of the US Federal Reserve edging closer towards raising interest rates. The risk of deflation and drop in commodity prices poses a major threat to the world’s economies with those candidates looking to pave their way in the market risk function needing to come armed with a competent understanding of risk indicators across FX, treasury, FI and commodities.
Companies globally are being forced to look at ways to deal with the volatility of the financial markets as more and more risk-averse retail investors, spooked by sharp dips in the market, rush to pull their money out of equity mutual funds. Hiring sentiment has thus increased for market risk professionals across the UK and Europe, with organisations intent on buffering the European economy in the midst of China’s slowdown.
According to an FX strategist at the London arm of BNP Paribas, “the market is trading more risk-on across the board” as reflected in the past week’s rising European stock prices and optimistic data for German exports and imports. This in turn has forced investors to re-evaluate the risk aversion that has prevailed over currency markets for the past few months. The health of the German economy bodes well for Europe despite the current flail in the Chinese economy and suggests both foreign and domestic appetite for Europe’s largest economy.
Taking into account both the current global economic climate as well as the nuts and bolts of everyday operation across the banking floor, hiring managers are looking to make strategic acquisitions at both the front end and beyond of their business. Once just an administrative nicety, the need for experienced market risk managers has risen through the ranks to become a top priority, most notably within the investment banking profession in London, due to increasing regulations and bigger fines for transgressions.
Recent data shows those in the market risk function are among the top ten best paying back and middle office banking jobs in London with salaries averaging around £110k. With a shortage of candidates in possession of both the technical skills as well as the soft skills, market risk managers can command a far higher pay package, particularly those individuals with extensive experience. Candidates looking to enter the market risk function should note that criteria for market risk jobs in the UK and Europe are imbued with a solid background in regulatory compliance and knowledge and understanding of the Basel III Accord, the Capital Requirements Regulation and Directive (CRDIV) and the proposals set by the FRTB.
With a large number of risk projects geared towards preparing for future regulatory and strategic change, opportunities for market risk professionals across the UK and Europe also hinge on a candidate’s ability to challenge traders directly while acting as an effective consultant on the market risks affecting the area of business within which they’re based. An academic background in a quantitative discipline is highly revered; such as maths, engineering or economics, as is a strong proficiency with excel reporting and other IT skills. Candidates should also be able to exhibit excellent financial market knowledge on derivative products as well as the ability to assess and quantify the key market risks of derivative transactions.
Female candidates in particular are much in demand as recent research by the Guardian revealed that out of 60% of female graduates, only 42% of hires to big training schemes are women. This has put employers under pressure to attract more female applicants to their programs, with accounting and financial services included.
While experts are divided on how to respond to the market risk posed by China, opportunities for market risk professionals in the UK and Europe are at an all-time high as organisations reinforce their defences against the downshifting global economy.