Investment Banking

Question 1

What does Front Office do? Who works there?

Answer 1

• Exist to generate revenue for the bank and profit for their clients.
• Traders, brokers, asset managers, researchers are key players.

Question 2

Who does what in Front Office?

Answer 2

• Not shouting down phones. Nowadays the trading floor uses software packages and applications to track, analyse and predict the markets and facilitate the trades.
• Developers also on the trading floor.
• Researchers investigate potential markerts and investment opportunities for lcients, traders and brokers make the trades themselves.
• Bakerers also support clients as they buy, merge or sell

Question 3

Charecteristics of Front Office

Answer 3

• High pressure – big decisions, short amount of time.
• Long working hours
• These roles generally have highest salaries.

Question 4

What is Middle Office role?

Answer 4

• Middle office is the voice of reason
• In investment Banking, usually consists of risk management, research and compliance departments, as well as some elements of technology.
• They work closely with front office teams, feeding them reports and results on analysis of their various asset classes and financial markets. Designed to manage risk for front office.

Question 5

What else do they do in middle office?

Answer 5

• Also manage risk in terms of compliance – ensuring the bank is following legislation and industry standards. Legal team also features here.
• Developers and some types of quantative analysts work here, on the creation and maintenance of software and applications used by the traders and brokers.
• Financial control is also a part of middle office, its essentially the accoutnign department for the bank.

Question 6

Characteristics of Middle Office

Answer 6

• Huge responsibility – in charge of making sure the bank doesn’t breach regulations and puts its financial position and reputation at stake
• Challenging – need to convince front office to not get carried away but also working for profit

Question 7

Role of Back office and who works there

Answer 7

• Referred to as operations – includes all the services and duties that must be carried out when trades are made by front office – clearing and settlement.
• Coordinate teams and offices globally
• HR and marketing, running recruitment, ensuring standards are upheld, handling disciplinary issues. The back office is basically the engine room.

Question 8

Charecteristics of back office

Answer 8

• More standard office hours, an international dynamic, big teams of problem solving, not as intense as front office but still have deadlines to meet.