If there’s one reasonable certainty, it’s that the regulation of banks will increase exponentially over the next five years. In the circumstances, regulatory risk is therefore, surely, the place to be.
Some people appear to have already reached this conclusion. “We’re starting to see candidates who are interested in moving across from market risk to regulatory risk,” says Paula Maidens at recruitment firm Robert Walters.
She adds: “The really interesting area is strategic regulatory risk – it’s not simply a question of how much capital must be put aside, but how banks can work within a regulatory framework to use their capital the most efficiently. This requires people with really good product knowledge.”
Emily Benson, a financial regulation specialist at law firm CMS Cameron McKenna, says there hasn’t been much sign of new regulations yet, but she agrees that they’re definitely coming.
She also says the new breed of regulations will require a new breed of risk specialist: “The big emphasis will be on understanding capital and liquidity issues and there aren’t many people capable of that. You might start to see a very specialist breed of risk manager.”
Pay for regulatory risk mangers isn’t stratospheric. Maidens says someone with five years’ experience can expect a base salary 50k-75k. Bonuses this year are anyone’s guess, but if you’re working in risk they’re likely to be a lot, lot lower than 100%.