A market risk analyst assists a financial firm in predicting and addressing market risk in a variety of dynamic ways, from policy changes to the introduction of new products and services. A four-year college degree with an excellent grade point average is usually required for jobs in this sector of the financial industry. Internships during college can also provide valuable work experience. Starting salaries for market risk analysts vary, but they are frequently low.
One aspect of the job entails researching and assessing current market risks, as well as risks that may arise in the future. The market risk analyst may work with other personnel, such as those who develop financial products and interact directly with clients, and may focus on a specific sector or look at the market as a whole. The data collection aspect of the job can be time consuming and may necessitate excellent observational skills as well as the ability to dig deeper when something appears odd.
In addition to data analysis, the market risk analyst must be able to explore and quantify risk using mathematical models. Working with raw data is too time consuming. Analysis reduces the amount of data in a comprehensible format and can reveal hidden patterns. For example, the market risk analyst might begin to notice previously unnoticed connections between different market sectors, or he or she might notice an area of the market that appears to be headed for a correction.
Analysts who specialize in market risk make recommendations as well. When they meet with executives and other company officials, they rely on the results of their analysis to back up their claims. The analyst can help the company decide on the safest and most appropriate move in any financial situation by participating in activities such as developing new products and changing company policy. The market risk analyst may make recommendations for or against specific business moves in some cases, while in others, the market risk analyst may suggest ways to restructure a proposal to reduce risk.
These finance professionals must be well-versed in both legal and economic issues. Their parent companies must always be in compliance with the law. Because the law is constantly changing, the analyst must stay up to date in order to advise the company on how to comply if regulations change. The analyst may also look at proposed regulations and legislation to see what risks they pose to the company, as this information will help the company decide how to respond to a changing regulatory environment.