Wall Street Prep

Incorporating Risk Management Into New-Hire Markets Training

Client

Markets Division at a Global Investment Bank

Partnership Scope

New hire analyst & associate training across the firm’s global Markets divisions.

Population Size

25

Format

Live Virtual Classroom

Background

  • Global leadership at a Global Investment Bank wanted to refocus on risk management following trading losses that made headlines
  • Client stressed the need for the training to be delivered by practitioners with specific case studies and examples
  • Curriculum needed to be modern, reflecting current derivative products that have caused trading losses for this firm and peer firms
  • The client did not want this training to feel like a compliance training, and wanted the training to be interactive and dynamic

Solution

WSP developed a rigorous risk management curriculum drawing from the risk management expertise of its global faculty

  • Risk management concepts were incorporated into product training, and participants understood the market risk and liquidity risk of the products they traded. Participants worked through exercises to demystify risk concepts such as VaR and DV01
  • Derivative counterparty risk concepts were introduced, with participants exploring CVA calculations and the impact of margin, volatility, and cure periods in the risk management framework. Advanced topics such as wrong-way risk was introduced as a group project
  • Dedicated reputation risk simulation was created, focused on an interactive approach to understand the need to escalate a situation and simulate a reputation risk committee meeting

Impact

  • Participants acquired the risk management skills and mindset they needed without feeling forced to sit through a compliance training
  • Participants were engaged and developed the risk management skillset they needed for complex situations
  • The training demystified the complex and interrelated risks that former colleagues who did not take this training missed