Ask Matthias Schwarz anything for one week until November 13th!
Who is Matthias?
The ex-head of EMEA Credit Trading at Bank Of America in London where he worked 15 Years, and led a team of 33 traders and research analysts.
Matthias is an expert in Credit and Rates Products and was a market maker in cash and derivatives for 20 years.
In 2022 Matthias founded a Career Consultancy advising professionals on a range of Topics from bonus negotiations, job changes, conflict situations, diversity and graduate/intern Mentoring. www.careercapital.one
Matthias served on Bank of Americas graduate Recruitment steering committee, the
Managing Director promotion committee and was a member of the global LGBT executive Council. He served on the Afme Credit Board and currently Matthias serves as director on The board of Mai Dim Sum; an upcoming artisan Dim Sum eatery.
Matthias is a strong believer in rewards for hard work, but is equally proud of his Philanthropic work where he gives back to the Less fortunate. This includes volunteering for Under one Sky and the St. Vincent de Paul Society. Most recently Matthias was involved as an Executive Producer in the creation of a documentary about Homelessness in London during the pandemic: “I’m Still Here.”
Earlier this year Matthias was appointed Justice Peace by His Majesty King Charles III.
I’m looking at internships in trading at the moment. I go to a very good school but I’m struggling with my grades right now. I’ve got a few other side projects (e.g. I’m part of a sports team, which I know banks like) which I think could positively affect my applications. Do you think I should drop any of those to improve my grades and hope the name value of my school is enough to get me through the process, or should I carry on with them and risk a lower grade in the hopes that they’ll make me stand out more as an applicant.
During the Great Financial Crisis, AIG was linked to many of the major financial institutions through credit default swap positions, and this made its potential failure catastrophic for the entire system – a level of systemic importance that was nearly invisible during normal market conditions.
The adoption of processes borrowed from Machine Learning and Network Theory could have easily shown this dependence, which is difficult to catch and stays hidden during normal market conditions (it’s only discovered during crises when it’s too late).
So, I would like to know, what’s the state of the art in terms of adoption of Machine Learning techniques in Credit Risk modelling? Including for computing default probabilities, and speeding up Monte Carlo scenarios, which most interests me.
hello
the grades are most likely going to be a pre-screening hurdle.
with applications in the thousands I assume by now AI programs will knock out CV’s on certain parameters, grades for sure being one.
assuming your grades are not in the bottom quartile you can do the following:
-do as much as possible to improve your grades
-call up a couple of HR departments at potential employers and ask the direct question what the grade threshold is. (unlikely they will tell you but worth a shot and it gets a conversation going)
spend a lot of time applying to everyone. every bank, every HF, asset managers etc. study their website and the application processes. this is very time consuming but it’s a number game. the more you do it the better you will get at it and your probability of scoring goes up.
perseverance pays off.
hello.
this is a difficult question for me to answer, this may be a surprise, but there are far more mathematical savvy people in banks than traders. the risk systems are developed and maintained by segregated departments and purposely kept from the front office so any influence is ruled out.
what I would say, is that the knowledge of the concentration risk was there. people knew this is a risk but judged the probability of it playing out near zero and/or the revenue generated from that business was so great no one wanted to not do it.
there are clear similarities today. the AI boom 100% creates massive risks. they are overlooked today because it generates a lot of return for shareholders (for now) and in terms of banks they are making money in M&A, ipo’s lending and issuance of bonds.
one red flag is the circle financing of nivida supporting/buying it’s customers.
not every investment into AI can possibly be a winner but everyone is racing to be the winner. those who will turn out not win will create a lot of capital destruction. but that’s capital markets, and the risks are known (maybe not how they will play out or to what magnitude)
Nice to meet you on this platform! I am a resident in Scotland who originated from Hong Kong as a frontline school teacher for 25 years, relocated to the UK for 3 years and have registered as a teacher in England and Scotland again for a year and just get a conditional offer to work at schools in Stirlingshire yesterday. Paper work is under processing but I would like to ask for your advice if you don’t mind:
First, what do you think about the future of UK’s development as a whole? Comparing to many other countries, especially my hometown Hong Kong, do you think the economy in the UK is much bigger and better than the tiny city?
Second, are you optimistic on the property industry in the UK, especially Scotland in the next three to five years?
Third, as you were a giant working in the financial field for many years and there are a lot of changes in London over the past two decades, do you think London is still a financial centre of the world, together with Singapore and New York? Also, as a teacher, do you encourage me to go out of my comfort zone and become part of a financial institute? What are the similarities and differences working at schools and in the financial sectors?
Lastly, what do you think of the challenges of the financial sectors in the world in the next decde?
Pardon me for many questions but I really want to learn from you!
hello there. i guess AMA has just entered another level
i dont know anything about the property market in Scotland.
i think the UK is ahead of central europe by 5-7 years (in terms of decline) this is mostly but not all brexit inflicted. we see many similarities in France and Germany to where the uk was right after brexit. so in that sense I hope and think the UK will recover and probably before core Europe does.
yes. i think london will remain a significant financial hub. i’m confident london will innovate and recover some of the lost market share.
My question may be a sensitive topic for some, but I noticed you were part of the LGBT council at Bank of America and was wondering if you could give me some insights on the best places in trading to work as a part of the queer community. Especially as the major banks roll back on DEI I’m quite worried about joining a company with a culture that might ostracise me.
Are there any companies or sectors that you think are particularly LGBT friendly in trading? Or is it something that doesn’t really matter?
It’s easy to pinpoint the source of Germany’s problems, though: geopolitical tensions leading to a sudden rise in the cost of raw materials, making the German export engine uncompetitive. France and the whole of Europe suffer as a result of Germany’s export crisis.
Once international tensions are resolved one way or the other (within a short or medium timeframe), the crisis will most likely subside.
Britain’s malaise is deeper and more obscure, and no immediate solution comes to mind, as is the case for Europe. Certainly as you mention Brexit should get a large share of the blame
very good question.
trading is an unfriendly environment by nature no DEI will ever change that. as long as the bonus you get comes out of someone else’ allocation people will compete with each other and they will compete with elbows.
I don’t think on the “ground”, DEI is dead. I think institutions know a diverse workforce is beneficial for them. I expect they will continue to support minority groups internally, maybe less so to the outside.
What is being rolled back is an excess of promotion that’s not based on merit but on diversity grounds. In reality if someone has been promoted mainly due to a diverse background, they fail later in their career because your life will be hell if you don’t pull your weight.
So my advice is:
work hard, be the best in your business field and you won’t have to worry about your minority background. (especially in London)
more than happy to take this offline if you want chat more about this.
Thank you for taking the time to share your expertise on this forum.
My question is how do older experienced candidates who are returning to the workplace after a disability / extended illness re-enter a banking a career or find assistance to proactively pivot to a new one?
Are there any specific organisations or forums to join / reach out to?
The algorithms in most professional recruitment solutions seem to exit returning candidates from the process.
External recruiters are less likely to work with / contact you, as yesterday’s news; relative to candidate currently in roles.
A selection of banks or institutions offer Returnships which work well for more commoditised junior roles in Technology, Operations and Admin. That said, once you hit an SVP/ Director bandings equivalents or have more niche skills sets in say COO / FO Transformational experiences, the schemes quickly fall apart; as there isn’t a placeholder for you in a product or functional sense. Likewise, if you can find a scheme, the campaign’s are often launched without departments committing to create roles or hire from the scheme. Schemes are often launched at year end when most roles, required to join the schemes, are pulled or pushed into the next year.
I’d welcome your thoughts on the above, as would others.
tricky. i think the problem is the industry is very unforgiving. you’re in or you’re out.
hiring managers in my experience (and i was one of them) never have been out. they are typically young and have never had life experiences that set them back. that means they don’t understand the value of people trying to re-enter that have been out for whatever reason. i now understand how wrong that is but i can see why it’s the way it is.
the best way back is via your personal network. if you have been a good leaver try your old company. if that’s not possible try people you used to work with who now are at different companies.
recruiters go after the easy money. to place someone who has a story attached isnt easy and hence they are reluctant to try. again work with recruiters that know you from the past and will try as a favour.
if non of this works the only thing you can do is grind it out. keep applying for jobs 1-2 levels below your experience level to try to get back in. it can be very frustrating and challenging to get a constant negative feedback loop, try to think that it’s not personal.
If someone is returning to employment after running their own firm and the new role is business development, and client acquisition in asset management working as a family office for multiple clients what would be your best advice to succeed in the new role to ensure a sustainable position. Thank you
hello.
my assumption is you got hired for a specific reason. something that they liked particular about you. if you don’t know. find out what it was and make sure you nurture those attributes.
besides that i think seeking regular feedbck from management is under appreciated. and what i mean by that is not the casual chat but a serious sit down once every two month or at least once a quarter. managers often don’t initiate this themselves as they don’t deem it important enough. but for an employee it is very important to understand managements thinking and also to influence perception. i’ve seen this so often where employees do really well but no one notices. it’s the employees responsibility to manage up.
Thank you for doing this. I am a Quant Strats in a top US BB in London and I want to switch to Trading. I have been doing this for two years and even though my work is appreciated I don’t like it at all.
I really want to do Trading, even though I get approached by top quant firm in UK, I just don’t want to be quant. I enjoyed much more markets analysis. I have a view of what a Trading desk is based on my internships in Trading before interning at my firm in Quant.
I want to transition to Trading but everyone I speak to seems to want people with experience or there are graduate role in market for which I don’t qualify since I have been in industry for two years.
Please how could I best navigate this situation to end up in Trading ?
Thank you for doing this AMA. Really appreciate your time.
I am currently looking for investment analyst and credit markets internships as a finance major in my junior year of undergrad with an international background. I am facing the issue of not hearing back from employers and firms despite having a well rounded resume with some professional experience, a good cover letter, high achieving academic status as a student and a college sport background. I understand in the finance industry where connections are also paramount, I need to be constantly reaching out to people and show my interest in the field to be more exposed to employers. What is something you recommend I do to find people to connect with on a regular basis and what is something you would look for in a potential recruit? Additionally, in efforts to land internships and jobs in the US, what are the things you would recommend I do to stand out as a good candidate for these roles?
hello
a lateral move into trading is one of the hardest things. however with more and more trading being done by algos the easier lateral move is being a quant.
i would have to know more specifics about you and the firm youre currently at to give detailed advice
generally speaking you might have to take a quant job that’s closer to trading than your current one is to have an easier bridge to cross. what i mean by that somtimes quants are directly working on the trading desk as quants, therefor your manager is the trading manager and conversations to move over are easier.
happy to talk more offline
