Function of the Central Risk Desk? Closest thing to prop trading?
I was wondering if you guys had any insight into what is known as the Central Risk Book, Central Risk Desk or Central Execution Desk in the trading department of an investment bank.
As far as I can tell the desk is there to ensure that trades across the bank are well hedged and executed. However, I have also been informed that the desk is more or less allowed to carry out proprietary trading, due to the fact that it is not necessarily trading in the market but internally or directly with clients.
An article entitled "banks hiring for the closest thing to prop trading" gives a brief explanation. My confusion is that, after describing it as close to prop trading, it then goes on to explain that its function is to monitor bank-wide trading positions to ensure trades are placed and hedged efficiently. Which, to me, sounds far removed from proprietary trading. In general, I struggle to understand exactly what the function of the desk is.
FT Alphaville also ran a piece on this desk entitled "Rise of the central execution desk"
Any feedback is much appreciated.
also interested
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