Here Come the Regulators!

At GlobalRiskJobs we have long anticipated that the ultimate response to the global financial crisis is going to be much more intense regulation. Once the dust settles, the banks have been stabilized, the new administration gets its legs, etc. count on the rules of the game starting to change. Remember how Sarbanes-Oxley came about - it was a response to inadequate corporate audit procedures in the aftermath of Enron, Worldcom, Tyco, et. al. Expect something similar this time as it concerns Risk and Compliance.

Investment banks which are now partly owned by the U.S. Government must brace for regulation and risk reporting way beyond what they have experienced. And now, thanks partially to Bernie Madoff, hedge funds can likely expect similar treatment. A very good recent article in the Financial Times entitled, "Crackdown on hedge funds after Madoff affair" says funds should brace for more stringent requirements by investors and increasing regulatory scrutiny after the massive $50B Madoff fraud.

Lawsuits are being filed, due diligence procedures at funds-of-funds are being put under the microscope and Congress is on the case as well. Third party administrators and more regulation are all but a given in the new normal of high dollar asset management.

What does this mean for the risk or compliance professional? Logically, one would anticipate a slew of new opportunities as banks, I-banks and funds wake up to the new reality. In looking at SOX for precedent, think about the consulting teams that were assemble to assist in sorting out all of the new requirements. Consider the in-house teams at banks and I-banks that will be implemented to deal with the reporting they will likely face. And think of a more transparent - and more regulated - hedge fund world which will need to face scrutiny like never before, and consequently will have to appoint employees dedicated to facing that spotlight.

Massive change appears to be on the way. The only question is when it arrives. stay tuned to GlobalRiskJobs for all the opportunities and news as things progress.

Still Demand for Quants and Risk Managers

Quants are still in demand. So says a recent Financial Week article about the current state of quant-as-career.

While many of the jobs previously available with the structured credit desks at I-banks have evaporated, risk management is a growth area at pension funds, hedge funds and mutual funds. Investment banks may also need people to price CDOs or assess counterparty risk.

For new graduates of quant programs, the article acknowledges that it is a tough environment, but sees signs of hope. Carnegie-Mellon's future grads are about 69% placed, while NYU is running at about 55%.

GlobalRiskJobs is still showing opportunity for quants. Current openings for quantitative risk modellers, first tier quant support professionals, senior hedge fund risk analysts, and options trading risk managers are among the 2,000+ listings on the site.

Risk Thought Leaders Sorting through Wreckage

As GlobalRiskJobs monitors the risk workplace looking for career trends, we sometimes see other important trends begin to develop.

One thing taking place as financial professionals begin to assess what went wrong and led us into the worst global financial crisis in generations has been an increasing number of gatherings of thought leaders in the risk community. GARP, whose annual conference will be held in New York this February, has held many panel discussions in its various chapters, as has PRMIA. Many academic institutions have also begun to investigate.

Several MBA programs have also been on the case, proposing concentrations in risk management as they respond to some who point the finger at them as blame for the crisis is meted out. In late November, Northwestern University's Kellogg Graduate School of Management played host to the 2008 Kellogg Risk Summit, where experts discussed the drivers behind the meltdown.

The conference featured leading risk management practitioners and academics who discussed the issues and took part in a panel discussion which was open to questions.

This introspective trend can be expected to intensify in 2009 as global markets stabilize and regulators, academics and professionals begin to ask what needs to change to avoid such a crisis in the future, as well as ahat shape risk management and regulation will take going forward.