WallST: IBank = FO + MO + BO

The short version is that Front office generates revenue. Middle office manages risks and resources. Back office administrates day-to-day operations. The long version is that ....

Front office is where the money and action are. Its main functions are pricing and trading (proprietary and customer), with major areas like sales, trading, deal-making and research. Most of the FO jobs are line positions (as opposed to staff positions) and offer the fastest advancement and most money.

In addition to manage the risk exposures by drawing on the resources of both the FO an BO, MO carries out pricing as well, with an focus on validating the FO/BO pricing models, and analysis. In fact, pricing is done in all three offices and a good pricing model in one office is often a poor one in another due to their own specific focus.

Back office carries out settlements, clearances, regulatory compliance, accounting, and other bookkeeping functions. Many of the BO jobs are staff positions and indistinguishable from similar jobs in other industries, therefore they are easier to get without prior financial experence (at the same time, easier to automate and outsource.)

Despite the spins headhunters typically put on, BO/MO to FO directly is slow (if not hard), even if you have the credentials and stomach to work the politics. The fastest way is the most direct way - to land a FO job at a less-prestigious place, or in a support role like desk developer. This is also a hedged move since even if you don't make it, you still earn or learn a lot along the way.

Category: C++ Quant > Outdated

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