Credit Risk/Risk Management Careers

miermier's picture
Rank: Baboon | 133

Hey guys, so I am a freshman so I have a lot of time, but I have recently become interested in credit products and risk management. After learning how to model DCFs, I have found IB a bit less interesting. I was wondering if anyone in risk management or credit risk assessment teams at a BB could tell me what the salaries are, how long do people stay in one firm, how are the hours and how fast does one advance in the firm.

Comments (16)

Jun 7, 2012

hey guys so i am a freshman so i have a lot of time but i have recently become interested in

...

i know you just didnt write 'credit products and risk management' instead of 'getting drunk and fucking girls'

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Best Response
Jul 7, 2012
miermier:

Hey guys, so I am a freshman so I have a lot of time, but I have recently become interested in credit products and risk management. After learning how to model DCFs, I have found IB a bit less interesting. I was wondering if anyone in risk management or credit risk assessment teams at a BB could tell me what the salaries are, how long do people stay in one firm, how are the hours and how fast does one advance in the firm.

I know this is over a month old, but hopefully I can be helpful.

You will be modeling in credit risk at a BB, but it won't be the sexy modeling, it will be "how can we tell the bankers 'no'" modeling.

Salaries have the same base as ibanking ($70k as of 2012), with a $10k sign on bonus, but the year-end bonus is much smaller (think $10k). Hours are more like 50-60 hours per week, sometimes with late nights if there's a live deal, but certainly nothing like ibanking.

Advancement is similar in structure to ibanking, BUT, I will say that most of the senior people at the BB I was with were ibankers at some point. Most of the junior people left before the VP level, and I would say in general there's much more movement in and out.

If you really just can't handle 100 hours/week for two years and are okay forgoing $60-$100k+ in bonuses over those two years, I guess it's worth it. I personally would have been miserable reading and writing credit approval memos over and over and hated that I would never, ever (not even at MD levels) get to see clients. Most of the work honestly should be outsourced to India...it requires very little brain power. So, if you were bored by ibanking, credit risk will probably only be more boring.

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Jul 7, 2012

I personally would take the S&T job in a heartbeat. Your long-term concerns and reasons for considering RM may make some sense, but pay is never going be in line with a front-office job with a bonus structure (even if that has tapered a bit recently).

A job in high finance is hard to turn down, even in this market environment. Also, many MMs are positioned to perform better in this climate than some of the BBs (I'm not even sure what firms that term refers to anymore).

Jul 7, 2012
TheAxe:

I personally would take the S&T job in a heartbeat. Your long-term concerns and reasons for considering RM may make some sense, but pay is never going be in line with a front-office job with a bonus structure (even if that has tapered a bit recently).

A job in high finance is hard to turn down, even in this market environment. Also, many MMs are positioned to perform better in this climate than some of the BBs (I'm not even sure what firms that term refers to anymore).

But it's very frightening so see that every other post on this board is about how a trader got canned and can't find a job. Correct me if I'm wrong, but it seems like the exit opps for traders are shit; or at least in this market they are.

But you're right. I am very long-term oriented and forward looking. And I'm just looking at S&T and not really seeing any valuable long-term skill sets gained; whereas in risk mgmt one could easily transfer into insurance and the 'actuarial space' or even grad school.

Jul 7, 2012

while front office job is without doubt more lucrative... I think the BB brand name and RM exp r very beneficial in the long run... I would take BB RM job if I were u

Jul 7, 2012

If you are coming from a target with a decent GPA ( 3.4~ and above) and I don't think it would be extremely hard. Considering most of the people from targets will be pushing to get front office IB positions anything in risk management will probably be left alone or at least less sought after.

Jul 7, 2012

Alright, thanks for the reply. Also I was wondering that are there any junior year programs for risk management at BB's or any good boutiques ? Ive been having a tough time finding out any. Thanks!

Jul 7, 2012

Hmm, it depends.
If you are getting into more compliance-type risk management, it shouldn't be too difficult.
But if you are looking at market risk, they mostly look for phd (or at least masters) candidates in quantitative disciplines. It's ironic that these 'quants' earn much less money than other front office personnel (IBD comes to mind), which require much less technical skills.

Even the most 'complex' LBO models are basic addition/subtraction/multiplication/division...

Jul 7, 2012

Within market risk there are different roles as well. Quant roles (guys who actually build the pricing models used by risk mgmt) usually require a PhD, whereas reporting and analysis type jobs only require a master's or a smart undergrad. With the latter you would get some contact with the front office and learn about the business, at least from a risk perspective, but at times it can be quite monotonous. Risk quants are generally paid better than the reporting grunts but they're off in their own world and get little exposure to what's actually being traded. This may be a good thing if you would like a quant type job with sane hours and a civilized working environment.

Jul 7, 2012

I interned at a BB in market risk after my sophomore year; it was a great experience. Most of the people in my group were very quant, and I got a lot of exposure to the trading business. The other kids in my analyst group were mostly math, engineering, stats and/or econ majors.

What aspects of risk do you find interesting?

Jul 7, 2012

Risk management in I-banking group is easy, not sure about market risk. Just be nice and read on some news, that's about it (have some modeling experience).

Everyone seems to be hooked on i-banking, RM seems to be completely unnoticed and left out.

Jul 7, 2012

What do "compliance" risk managers do at the bank? Is it that boring or are there interesting aspects to it? Risk management as a concept seems very interesting to me, but I bet that I'm not cut out for the math aspect of it, so I'd likely be on the reporting side of it.

Non-target person with high finance dreams

Jul 7, 2012

Oh also, are certain groups more or less easier to break into within risk management? Going off the JP Morgan site, "Special Credits", "Country Risk", and "Credit Risk" seem the most interesting to me (in order of decreasing interest), so are any of these doable from non-targets?

Link to site: http://careers.jpmorgan.com/student/jpmorgan/careers/us/business/risk

EDIT: Shit, one last thing: If I pursue Risk Management, I want to pursue it and only it. I have no desire to move into the IBD/S&T division at a bank if I get Risk Management. So therefore, I'm curious about how the career is in the long run (i.e. potential for growth, how hours are, how interesting the work is, etc.) and if its possible to get into a top MBA with this kind of experience, since I might want to work in Corporate Finance for a F500 at some point down the road.

thanks

Non-target person with high finance dreams

Jul 7, 2012
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