Market risk analysts predict and address market risk for financial firms, requiring a minimum four-year college degree and work experience. They research and assess risks, analyze data using mathematical models, make recommendations, and must be familiar with legal and economic topics.
A market risk analyst works with a financial firm to help them predict and address market risk in a variety of dynamic ways, from changing policies to rolling out new products and services. Careers in this area of finance generally require a minimum four-year college degree with an excellent grade point average. Work experience through college internships can also be beneficial. Starting salaries can vary, but are generally low for entry-level market risk analysts.
One aspect of the job requires research and assessment of risks in the current market, as well as risks that may develop over time. The market risk analyst may focus on a specific industry or look at the market as a whole, and may work with others, such as employees who develop financial products and interact directly with customers. The data compilation aspect of the job can be time consuming and can require very good observation skills and the ability to drill down when something seems quirky.
The market risk analyst must also be able to analyze data, using mathematical models to explore and quantify risk. Raw data is too heavy to work with directly. Analysis distills information into an understandable format and can highlight underlying patterns. The market risk analyst may begin to find links between different sectors of the market that were not apparent before, for example, or may identify an area of the market that appears to be on the verge of falling.
Market risk analysts also make recommendations. They rely on the results of their analyzes to support their arguments when meeting with executives and other company employees. The analyst can participate in activities such as developing new products and changing company policy, and will apply analytics to help the company decide on the safest and most appropriate move under any financial conditions. Sometimes this involves making recommendations for or against specific trade moves, while in other situations the market risk analyst may suggest ways to restructure a proposal to reduce risk.
These finance professionals must be familiar with legal issues as well as economic topics. Parent companies must display regulatory compliance at all times. As the law often changes, the analyst needs to keep track of changes in the law so that he can advise the company on how to comply if the regulation changes. The analyst can also examine proposed regulations and legislation to determine the risks they create for the company, as this information will help the company decide how it wants to respond to a changing regulatory climate.
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