How much am I worth? Credit Derivatives Risk Analyst, leading international bank

A panel of headhunters gives its assessment of typical London pay packages: Basic salary: 30,000-140,000 (€44,000-€206,000); bonus, typically upwards of 30%.

Where there's money there's always risk: where there's big money that risk becomes even greater. Stating the obvious is often no bad thing, particularly when surveying the increasingly fashionable field of credit derivatives: the phenomenal growth of this market over the past two years, fueled by investors looking for high returns, has meant big demand for good quality specialist risk analysts.

Sunjay Vyas, a manager at Finance Partners, part of the Partners Group, says, 'The high-risk nature of these transactions means ensuring that limits are adhered to and trading activity closely monitored, especially as many of these organisation's proprietary trading divisions have large exposure to credit derivatives."

Vyas says that because of the heady growth of the credit derivatives business, many banks are moving towards setting up dedicated departments for looking at associated risk, rather than - as before - relying on fixed income and interest rate risk departments to do the job.

This has meant more demand for individuals with the specific experience. Toby Dutfield of Morgan McKinley says, 'The usual summer slowdown did not materialise this year. Job volumes are continuing upward and as credit derivatives is a relatively new product area, there is increasing pressure on the supply of high calibre senior level individuals."

So what sort of person becomes a credit derivatives risk analyst? A strong head for mathematics is essential given that the complexity of derivatives would bamboozle mere mortals who only just struggled through their Maths GCSE. Recruiting organisations usually demand a 2.1 degree at the very least, with a postgraduate degree - even a Phd - by no means uncommon.

The individual should be bright, tenacious and a good communicator, at ease dealing with all different levels of the organisation and happy with dry and often difficult concepts that would severely test the mettle of some types of analyst.

Conleth Maenpaa of Morgan McKinley says, 'Credit derivatives risk analysts advise traders on the risks of potential trades; they deal with the trading floor on a daily basis, considering the risks posed by proposed new activities, checking for any potential problems as well as carrying out due diligence checks on new and existing customers.' Many will have moved into the area from another risk analyst role, typically interest rate or fixed income, whilst others will be familiar with credit derivatives from a product control.

For those keen to take the complex analyst role one step further, there is the possibility of eventually moving onto quantitative analysis. 'Analysts must be highly analytical, enjoy solving complex problems and be able to communicate effectively with traders (and usually difficult traders!) and senior management," says Vyas. "The ability to grasp new concepts quickly and good technical skills are always on clients' wish lists.'

Salaries can be handsome once you've proved yourself worth the cost. Those at the junior end can expect to be paid a basic of between 30,000-40,000, with bonuses paid on performance ranging north of 30%. For those who've put in the time and can demonstrate an excellent track record, the rewards are very much higher: reckon on a total package of up to 140,000 say Morgan McKinley, whilst the Partners Group suggest a basic of up to 80,000 with bonuses reaching 50%.

Which is a fair reward for reminding over-zealous traders that every silver lining has a cloud.

Figures and commentary by The Partners Group and Morgan McKinley.