Quant: 'The vast majority of bankers are decent honourable people'
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Version 0 of 1. Is this blog biased against bankers? Today's interviewee certainly believes so. He is a quant (maths genius) who made it to a top position in one of the most successful banks in the world: <blockquote>"The vast majority of those working in financial services are decent honourable people doing decent and honourable things. Finance weeds out the arseholes, idiots, charlatans and fools pretty quickly and that's the main reason I don't recognise the picture painted by many of the contributors to the blog. Maybe they are some of the ones who have been weeded out?"<br /></blockquote> The interviewee is coming into the thread to debate this, so feel free to put any questions to him. Do read the full interview here first however as you may find your answer there already. The full interview is very much worth your time anyhow. In fact, it's just brimming with interesting insights and observations. For example on the partnership model. When the Financial Times recently listed its own favourite long-term solutions to the problem of Too Big to Fail banks, a return to this "partnership" model topped their list. Today's interviewee remembers the time when his own bank was such a partnership (rather than "publicly owned" by raising capital on the stock market): <blockquote>"I remember one time, I was very new and maybe a bit cocky. I thought I'd built something very clever. So I went over to the head of trading and showed it to him, saying, isn't this clever, look how we can make a lot of money with this! The head of trading was a partner in the traditional sense. He looked at me and said: "Don't forget, this is my money you're fucking with." That was the system back then. As a banker you had the shareholder sitting next to you. Maybe that was a better way."<br /></blockquote> Being a quant presents its own challenges and opportunities, the interview makes very clear. <blockquote>"The first time I stepped into the bank I was expecting something very different. This was the early 90s and until then I had been in academia, as had so many quants of my generation. My idea of an investment bank basically went back to the two famous books I'd read: Liar's Poker and Barbarians at the Gate. Both paint a picture of traders as loud, crass, bad-mouthed macho dickheads. The sort of guys with red braces who shout 'buy buy sell sell' into their phones and have eating competitions."<br /></blockquote> From the comments on this blog it seems this idea is still held in some quarters. Not so, the interviewee continues: <blockquote>"Some of the best traders are now now women. Totally unassuming, cerebral and talented. Trading is no longer a balls job. It's a brains job."<br /></blockquote> People with a gift for maths are taking over more and more areas in finance, and there can be a deep divide between quants and non-quants. The interviewee explains it thus: <blockquote>"Many non-quants don't think in probabilities, or statistics. Say I look at a portfolio of trading positions in the market and I tell you that there is a one in 100 chance of losing £5m tomorrow. Now what did I just tell you?<br /><br />I told you that one in every 100 days you are going to lose at least five million. But many non-statistically trained people misinterpret this and think I told you that you can't lose more than five million. Those same people won't realise that I didn't say anything about the losses with a chance of 1 in a thousand or one in a million."<br /></blockquote> Read on … The full interview is here while this banking blog features interviews with more than 90 other insiders across the world of finance. Here is a guide to help you find your way. For insiders there is this index of interviewees ranked by activity. This banker shares many of the interviewee's views on banking as a meritocracy:<strong> "Insiders on your blog who are so negative about the sector … It's not very kind to say, but they just didn't make it."</strong> Do read what happened to him next, though. Meanwhile this former graphics worker at a top bank is deeply critical of what she sees as a "social-Darwinist" culture there: <strong>"It's a proto-fascist ideology. Top bankers as predators and us as prey"</strong>. Our editors' picks for the day's top news and commentary delivered to your inbox each morning. |