Senior traders are switching to these hot risk jobs at J.P. Morgan
Are you a senior structurer working in a large investment bank? Perhaps it's time you thought of moving across to risk management.
More senior markets professionals are moving into risk jobs. But, specifically, those in senior structuring jobs appear to be attracted to the role of 'model risk officer' at J.P. Morgan.
Benjamin Telle, who was head of hybrid structuring for EMEA at Citi and a bond option trader, has just moved across to J.P. Morgan as an executive director and model risk officer. Telle is the second senior markets professional to move into a risk role at J.P. Morgan this year. David Le Broussois, who also previously head of EMEA hybrids structuring at Citi before moving to a head of structuring job at Haitong Securities, joined J.P. Morgan's model risk team in August.
This team sits within J.P. Morgan's 'Trading Portfolio Review' team, which is part of model review group. Model validation is an increasingly hot area in investment banking as firms deal with the requirements of Basel IV regulation, which stop banks using their own risk models for calculations of credit risk. Instead, the regulations are pushing for increased standardisation, meaning that those with the quantitative ability for middle office validation are increasingly in demand. Existing Basel III regulations stipulate that banks’ internal risk models must adhere to ‘the fundamentals of internal modeling governance.’
There's still the stigma of moving into a 'middle office' role by switching from the trading floor to a risk management job, but it makes sense. For a start, investment banks are under increasing pressure to strip out costs from their trading teams, and the slow creep of technology means that more roles are becoming obsolete. Risk, by comparison, is both a stable and increasingly strategically important role.
Telle has worked in structuring throughout his banking career. He joined Citi in 2009 as an equity and hybrid structurer from Merrill Lynch where he was a structurer focused on equities.
Like Le Broussois he studied at Ecole Centrale Paris, and went on to major in statistics, probability and finance at Université Pierre et Marie Curie. The implication is, therefore, that these risk roles focused on model review require a highly-quantitative background not always available in the regular risk management talent pool.
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