BANKING: BUSINESS AREA
derivatives, credit default swaps (CDS) and other product areas and are responsible for keeping an eye
derivatives relating to corporate debt as well as on the ever changing economic and political
emerging markets. One of the biggest issues being landscape. Researchers, on the other hand, analyse a
tackled by regulators is the counterparty risks in the company’s credit outlook and debt structure. Nicola
over-the-counter credit derivatives industry. Th e Th ompson, research & PhD recruitment manager,
collapse of Bear Stearns this past March sharpened EMEA Campus Recruitment, notes “Merrill Lynch
minds but the dearth of liquidity and general lack of derivatives and fi xed income research require
trust between banks has also exacerbated the situation. candidates with a stronger technical and
quantitative skill set, for roles across a range of
MARKET DOUBTS teams including equity, credit and interest rate
CDS had been one of the bright spots but there are derivatives, structured credit and commodity
now doubts over the market cast by the government strategy. We typically target postgraduates (Master’s
bailout of Fannie Mae and Freddie Mac. Th is could and PhD level) studying quantitative disciplines
trigger the settling of contracts on these derivatives, such as fi nancial mathematics, statistics,
which are used to hedge, and speculate on, the risk econometrics and again are looking for strong
that a company defaults. Th e silver lining to all this is analytic and communication skills and interest in
that distressed debt trading and investing is expected investment theory and the markets.”
to enjoy resurgence. Interest rate products which Th ere are also strategists who create fi nancial
includes developed and emerging markets, futures, products and advise clients on transactions, measure
options, interest rate swaps and swaptions, are also risk and identify market opportunities, and
benefi ting from investors hedging their bets. structurers who work on the more complex
As for positions, fi xed income resembles equities derivative trades that are tailored to clients’ specifi c
and FX in that there is a sales and trading group asset and liability management. In each case, a
and research team. Sales tend to the client mathematical and scientifi c background
relationships while the traders specialise in specifi c is essential.
Cg
ARCHANA SOMAYAJI
Title: Credit Analyst
Current employer: JPMorgan
Previous employer: Ernst & Young
Universities: Mangalore University,
India; London School of Economics Are there certain skills you would consider useful for your job?
Degrees: Bachelors in Commerce; Strong analytical skills and an ability to work on your own with
Masters in Accounting and Finance
attention to detail are important skills, as is the ability to analyse
Professional qualifi cations:
information objectively (not being attached to your previous
Passed CFA Level III – charter
recommendation/view).
pending; ACA, Institute of Chartered
Accountants of India
How do you think the role you’re in now will change over time?
The knowledge base required to perform this role evolves
constantly. For example, we need to consider the impact of new
What attracted you to this career path?
products/derivatives, the effects of regulation, and incorporate
It is a challenging and intellectually stimulating role. I enjoy
new realities of asset price movements, risk assessment and
taking a stand on specifi c credits/issues and have others
market liquidity.
scrutinise that. Working as an analyst on the trading desk has the
further advantage of always being aware of the developments in
Do you have advice for someone intending to pursue the same
the market, and I am expected to quickly react to such
career path?
developments.
Be constantly aware of happenings in the fi nancial world. Try and
develop a ‘trading’ view (asking what level you would buy at,
What are the major challenges you face in your position?
rather than just thinking of it as a good company or not). Good
It can be frustrating when short term technicals dominate
accounting knowledge and a professional qualifi cation like the
fundamental value propositions. Capital and allocation
CFA defi nitely helps.
constraints are another challenge.
WWW.CFAUK.ORG CAREERS GUIDE 2009 63
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