Demand for people with collateral management skills: banking's next hot job sector?

An article in made us laugh. It was called “The 15 banking jobs that will be the most secure over the next 7 years”.

#2 is Centralised clearing specialists. “…Over-the-counter (OTC) clearing specialists are at the forefront of moves to make sure that OTC derivatives are traded as far as possible on exchanges. They need to understand the scope of the new Dodd Frank regulations regarding centralized clearing, along with the European Union’s EMIR (European Markets Infrastructure Regulations) and to help manage the shift to centralized clearing in big banks…”

#9 is Collateral management. “…Collateral managers are about to become a lot more important under centralized clearing…”

#10 is Collateral transformation/change specialist. “…The FT estimates that anything from $500bn to $10 trillion of new collateral will be required in the new centralized clearing world. Anyone who can convert ineligible collateral into eligible collateral will be hot…”

#11 is LCR liquidity manager “…The LCR ratio is one of the Basel Committee’s key reforms. Due to be phased in between now and 2019, it represents a whole new approach to banks’ liquidity…”

From looking on the job boards, we sense greater demand for people with collateral management skills. This isn’t just limited to banks, but include hedge funds, the insurance sector, money managers, and others. It certainly is not driven by resurgence in the repo or securities lending business – that still seems like it on a slow shrink. As the post says, it is a result of central clearing – so those interested in this field better understand not only repo and sec lending, but derivatives too. That may be a difficult to find skill set.

We wonder if #10 “collateral transformation/change specialist” isn’t a bit premature? Right now cash is king of the collateral world and rates have to go up a fair amount before hearing a clamor for transformation. But getting ahead of the curve isn’t a terrible idea.

LCR liquidity management is at full speed at most banks. It requires the ability to bridge treasury, securities financing, cash trading, classic banking, regulatory IT, and accounting. That is a mouthful.

A link to the article is here.

A related article in is here.


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