I've researched this topic before and while I understand people might have different opinions on the matter, I still haven't completely understood whether the credit risk function at BBs is a FO/MO/BO role.
I always believed it's a MO role since it's not quite BO like operations but also not FO like IBD. But I always thought it was closer to FO considering in credit risk, you do get exposure to companies and the industries they operate in. If that's the case, while I know it's clearly not as "sexy" as other roles like IBD, would you also be placed in the "finance/consulting" category if applying for an MBA program?
IMHO, the term "MO" is kind of wonky, you're either client-facing/revenue-generating or you aren't. I work in credit and would call it BO. While we do go on due dilligence trips to companies, the main portion of our work consists of working with guys in IBD or S&T whenever we do a deal that results in any credit risk exposure to the firm, and then we will monitor the exposure and the counterparty going forward.
This isn't the typical process-driven work that one would associate with BO, though. In terms of every-day activities it is similar to equity research, albeit the perspective is completely different, and your work is private and is solely for use by the firm.
In terms, of prestige obviously it isn't up there with IBD and the rest, but several people from credit have made the move to FO positions in IBD, and many have went on to the buyside in pretty good roles. So credit is still fairly well-regarded, and is probably one of the best places to be at a BB that isn't FO.
In terms of MBA applications, the finance/consulting category would apply, and several of the more senior people here got an MBA at an MBA business schools ">M7, coming from a credit background. Overall, it's not a bad gig. Hope this helps!
Credit risk is the definition of MO.
The definition of MO is confirmations. The term originates from back in the day when the front office would make the deal, middle office would confirm the deal, and back office would settle the deal. That's all the terms mean. Overtime, people started throwing all type of shit into the buckets in a non-uniform matter,
I call it MO, simply because saying you're BO makes people immediately think you're in ops. Nothing against ops but I like credit risk and whenever you say you're in MO, people guess risk. I'm not actually sure what other roles except risk fall in MO?
Legal.
Why wouldn't you just call it credit risk?
Because some people online seem to like to talk about jobs in FO/MO/BO terms... I use whatever terms the OP uses for ease of reference (shrug)
Everywhere else except JPM, credit risk is MO.
AT JPM, Credit Risk (CIB) is seen to be FO by virtually everyone.
Everywhere else except JPM, credit risk is MO.
AT JPM, Credit Risk (CIB) is seen to be FO by virtually everyone.
Really? And why at JPM specifically? Is their credit risk group managed differently than other banks?
JPM credit... they get to work on a lot of deals with the coverage groups whereas in other banks the role might be more on counterparty analysis
It's MO. The reason the middle office term is used is because it really can't be lumped in with back office functions even if it's not exactly a client-facing, revenue generating position. The term used to describe it doesn't really matter though. All that matters is what you can do with it, and as CFH said, you have better chances of making a jump coming from credit risk than a traditional back office role.
Middle Office for sure. I was at JPM in this same role, and while we did visit clients, we were there to conduct due diligence and identify risks around the business and management that we couldn't identify in the numbers and general industry.
BTW, to someones point above, I did make the jump to FO IB role at BB. Easily transferable skillset IMO.
Middle Office for sure. I was at JPM in this same role, and while we did visit clients, we were there to conduct due diligence and identify risks around the business and management that we couldn't identify in the numbers and general industry.
BTW, to someones point above, I did make the jump to FO IB role at BB. Easily transferable skillset IMO.
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