At Barclays Capital, risk management plays a central role in differentiating us from our competitors and is at the very core of all major decision-making processes throughout the bank. We incur different types of risk in our day-to-day business. These include credit risk, market risk and operational risk. GFRM is concerned principally with the evaluation of credit and market risk.
Credit Risk is a core risk that the bank enters into every day. It arises mainly when the bank lends money to a company or when we enter into trading risk contracts with a counterparty. Credit risk is the risk that the borrower or trade counterparty fails to pay back what it has borrowed, or otherwise fails to meet its obligations towards the bank and which could then lead to a default and, potentially, the bank incurring a loss. Therefore, the bank has to determine how likely such an event is to happen and assess the probability of default of each counterparty and, in the event of a default, what the potential loss could be. Typical counterparties with which we deal include corporates, hedge funds, banks, funds and other financial institutions, along with other more structured vehicles.
In GFRM, our credit risk professionals are responsible for approving both lending and derivative transactions (e.g. interest rate swaps) across a wide range of industry sectors and geographies. When coming to a decision, credit analysts (or “Sanctioners”) will consider the type and amount of credit risk to which the bank is exposed and determine what credit risk appetite they have for that counterparty or group. This is done through the assessment of a variety of factors but would include an analysis of:
In addition to using their own knowledge and experience, Sanctioners will work closely with other areas of the bank such as Investment Banking Division (including relationship management, industry experts, M&A advisors and product areas), Portfolio Management, Research, Legal and Market Risk. As such, a Sanctioner within GFRM Credit Risk is very much a core part of any deal team and is involved at the outset of a transaction to help shape how it evolves.
Sanctioners cannot undertake this role in isolation and rely upon sophisticated tools and systems to assist them in their work. As a result, there are a number of other specialist roles within the GFRM Credit Risk function requiring quite different skill sets. These exist in a number of crucial support teams where the nature of work is extremely varied, including typically;
The wide variety of teams and roles within GFRM Credit Risk means that there are opportunities for graduates from a whole range of disciplines, including both those which involve a high degree of numeracy but equally those which are less numerate – for example, Modern Languages, History, Geography or other Arts-based degrees. Across the varied roles in GFRM Credit Risk, helpful attributes for success in these fields would include:
Equally, there are opportunities for our credit risk professionals to move between different sanctioning teams, as well as into non-sanctioning teams and internationally, which can lead to a long and varied career.
The Market Risk Management Department at Barclays Capital is dedicated to the measurement, management and control of market risk.
Our mission is to provide competitive advantage to Barclays Capital by the facilitation of market-related risks in a controlled, scalable and transparent manner.
The prime focus of Market Risk is to:
Market Risk Management takes the central role in approving all new products marketed / traded by Barclays Capital.
GFRM Market Risk Management's organisational structure is divided into key functional areas to allow us to best execute on our strategy. Interns and graduates may find themselves working in one of the following functions:
The Market Risk Managers function is divided into the following teams aligned closely with the business:
The Model Validation group provides independent review of complex mathematical models.
The Market Risk Infrastructure function is divided into the following teams:
The Market Risk Engineering (MRE) group assists GFRM Risk Managers in the daily management of Market Risk by producing, monitoring and analysing Market Risk measures for Barclays Capital.
Market Risk Projects (MRP) is the focal point for identification, prioritisation and delivery of changes to our market risk infrastructure arising from the large variety of initiatives across both internal and external sources. This includes Core System Projects impacting single risk IT systems, Bank-Wide Strategic Initiatives impacting multiple risk IT systems, processes, businesses or locations, as well as ongoing support across all Front Office areas and the regulatory/control framework.
The Regulatory Liaison and Capital Management department contributes to the formulation of and executes Barclays Capital’s regulatory strategy from a market risk point of view.
Other functional areas include Strategic Controls and the Chief Operating Office.
Working within Market Risk requires strong quantitative analytic abilities, creativity and problem-solving skills to review, assess and make decisions based on analysis of large amounts of information. It is essential to be able to stay calm under pressure and pay close attention to detail. You’ll need an interest in markets and how they move, as well as current events.