Structured derivatives are rare bright spot in job market - survey

Banks are continuing to look for staff in certain fixed income and credit roles, as they develop more sophisticated ways of manging credit exposure, according to a report by the headhunter AMGM.

Though growth in the collateralised debt obligation (CDO) market now seems to be tailing off, the outlook for a number of structured derivatives looks more healthy, the UK survey said.

There was a trend in many institutions towards merging the cash and credit derivatives trading desks so that the books were combined.

In equities, the survey said the market was looking "decidedly ill", with staff cuts continuing and business flows static. "For some of the banks the decision to cut even deeper into revenue earning areas could well damage future relationships with clients."

Asset management was also suffering. "Many firms have continued to freeze or reduce headcount in an effort to control costs," the survey said. "Recruitment activity therefore remains highly selective and little new business is likely to be carried out before the year-end."

The market for quantitative analysts remained reasonably buoyant, with certain houses building capability in credit derivatives and short-dated FX options. There was also demand for risk experts who understood how credit modeling and portfolio management tied in with expected amendments to the Basel regulations.

In compliance, many large banks and asset management houses had a full complement of staff and were not looking to make any further hires.

"Compliance personnel are happy to ride out the year unscatherd," the report said. "Often the decision to stay at a bank is driven by the desire to collect what bonuses, if any, are on offer.

Whether we witness the usual liquidity in the (job) market in February or March is anybody's guess."