Join the Community

22,103
Expert opinions
44,093
Total members
404
New members (last 30 days)
189
New opinions (last 30 days)
28,704
Total comments

Reference data did it

There is an underreported flavour to the much-debated middle and back office experience of Jerome Kiervel, the Soc Gen trader responsible for last week's high drama. According to a copy of his CV circulated online (thank you Chris Skinner), he was involved in reference data between 2000 and 2002, working in the middle office Referential (sic) team. His resume mentions product modelling, building Excel macros to support exotic products, and involvement in a Single Referential project.

Referential/referentiel is common anglo-franco jargon for reference data (things like security masterfiles, counterparty hierarchies, etc).

This suggests that an intimate knowledge of financial products, counterparties and position management is very useful in making the very dificult and increasingly rare transition from back- and middle office jobs to the sharp end. Reference data rules! 

I am not sure if the Soc Gen story is a tragedy or a farce, but like the sub-prime saga the plot does involve a very potent reminder of the basics of this game we call capital markets. When you lose sight of what it is you are trading, how much it is worth, and who you are doing business with, something will happen to reduce a pyramid of esoteric and arcane financial engineering to a straightforward and harsh final bill.

On a related note - did  you also notice the relief in mainstream press reports that the Societe Generale episode did not involve any particularly complex products? Thank goodness - no requirement for yet another Guide to Collateralised Debt Obligations for Dummies...

External

This content is provided by an external author without editing by Finextra. It expresses the views and opinions of the author.

Join the Community

22,103
Expert opinions
44,093
Total members
404
New members (last 30 days)
189
New opinions (last 30 days)
28,704
Total comments

Trending

Now Hiring