Q&A: Risk Management

Carrie Halio is a vice president in credit risk and management advisory at Goldman Sachs.

Which skill sets and qualifications do you prefer for new hires, and can you describe the training program for those working in risk management?

We look for talented people familiar with finance and accounting, since that is certainly the most useful for us. But that doesn't mean that every hire is a finance major. We have a two-year training program, and we bring people in at the analyst level. Beyond finance and accounting skills, we look for individuals who are highly analytical-people who can learn the needed credit skills.

People are placed on different teams, and the work can be quite demanding. But what differentiates candidates over time is intellectual curiosity. Doing the bare minimum simply isn't enough when you are going to assign a credit rating or approve a trade.

Our training involves different tracks. You go through a week of firm-wide training. After that, there would be securities division or investment banking training, which lasts several weeks. Then, specifically within the department, we have week-long credit training, where people learn the specifics of what we do here. Beyond that, we take an apprenticeship-type approach, where people are assigned to teams, and through mentoring they learn what we do.

Can you give us an idea of the career trajectory for risk specialists?

The department has individuals who have been here for many years - some 20-plus. You might start off as a number cruncher, monitoring limits or analyzing counterparties, and over time you would move on to leading teams and making significant decisions for the firm. Credit risk is a very interesting place to stay challenged and motivated. Not everyone stays in the department, but credit skills are applicable to a wide variety of positions, including going off to work on the investment banking or sales and trading side of the business.

What is the typical day for a risk specialist?

Credit risk is the risk of loss to the firm if there is a default of one of our counterparties or borrowers. So, we try to make sure we are protecting the capital of the firm from credit losses from the default of a counterparty or borrower.

You're constantly trying to look around corners and anticipate what's ahead. Because of that, there really is no typical day. Recently, times have been more challenging than in the past, given where we are in the economic cycle and given my role running the financial institutions team. I try to stay ahead of what's going on in the sector, especially as things develop throughout the day and over time. If the Fed is announcing stress test results, a company is announcing earnings, or the FDIC is taking over a bank, I need to be on top of what that means. Ideally, we've anticipated the events in advance so that we've positioned ourselves well as a firm for any bad news that's happening in the market. Strategically, we spend quite a bit of time thinking about risks as they evolve. We're constantly working to improve the way we report risk, working with IT to improve the way we do things.