Yearly Archives: 2012

11 Dec3 Lessons about Product Liability

We have all heard about cars having defects and the likes of Toyota having to do a so called “recall”. When you read those stories, your thoughts may be similar to mine: “Fair enough, there is a recognised problem, they have to pay to put it straight.” Banking has its own “product liability”, which can […]

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03 DecThe 3 Lessons from the UBS case.

Last week the FSA ruled on the UBS rogue trader case and fined the bank some £30 million (for detail see: http://www.fsa.gov.uk/static/pubs/final/ubs-ag.pdf). For those who work in a bank, I would suggest reading this in its entirety. Having read it, a few overarching points come to my mind. Failure to learn: Points 17 & 19 […]

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30 NovThe 3rd of the 3 R’s of Reconciliations.

BOBO. Back-Office to Back-Office reconciliation. This is the last of the three reconciliation areas. There are three types of rec that I would place in this group; d open trades, confirmations and positions. Both are essential and both are a vital, daily controls. Before we delver into any detail, a word of apology. This week’s […]

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19 NovThe 2nd of the 3 R’s of Reconciliations

FOBO. Front-Office to Back-Office reconciliation. This is a vital, daily control that is designed to ensure that what the traders are trading off is the same as what is recorded in the firm’s processing systems and ledgers. There are various components to the reconciliation: Positions: a trader might just be long 1’000 shares of Apple. […]

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12 NovThe 3 R’s of Reconciliations

There are not three R’s in reconciliation, that of course would cause a break (sic). What reading, ‘riting and ‘rithmetic, or math for our friends from across the pond, are to children, the three types of reconciliation are to operations professional.  This week’s post is inspired both by a Goldman Sachs story and a Goldman […]

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05 Nov3 Things to know about mistakes

Mistakes happen. Things go wrong. It is how you handle them that matters. This week’s observations follow on from last week’s post on rogue traders. Often, people will do silly things to hide mistakes and losses. A really famous case occurred at the Japanese house, Daiwa, in the nineties. A trader, Toshihide Iguchi, covered up […]

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29 Oct3 certainties about the UBS case. We’ve heard this story before, they were warned and it’s all about what is normal

October 2012 and the latest rogue trader, Kweku Adoboli, whose antics led to UBS losing some $2.3B is in court. And, the dirty laundry is public and to the experienced nose, it sure seems we’ve had this before and for sure there was a warning. Let’s start the week with a history lesson. 1994. The […]

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22 Oct3 Essential Things to Understand about Operations in Investment Banking

“Reassuringly Boring.” That is a good day at the office for an Operations professional. The operative word here is “reassuringly”; in Operations when the days starts, you ought to have an idea of what to expect that day and as an Operations professional, you would like it to work out that way. This is not […]

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16 OctSound analysis or whimsical fiat?

No Italian cars in this week’s post, rather the first in a series looking at how often decisions made in big places are more the product of whim rather than objective and based on extensive analysis. Back in the day, in secondary school, or high school for the Americans, we learnt about linear equations. You […]

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08 OctStrategy vs Tactics. In tough times, down in the trenches it’s all about tactics.

“In all my years in this business, I have never known a time when we have had less money to spend on process improvement. All the money is going on regulatory, must-do stuff.” That is an excerpt from one of two recent conversations with senior Operations professionals that have inspired this week’s post. Both are […]

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