Hi all, I sit on the board of a bank as an independent non-executive—not a trader myself — but I work closely with trading desks and risk teams regularly. I see the constant tension: traders want room to move, boards want control. Fair enough on both sides. What I’m curious about is—how does all the governance, oversight, and risk culture stuff actually feel to those of you trading day-to-day? Helpful? A hindrance? Ignored? Also, with so much algorithmic and model-driven trading now, how do you know when to trust the model—and when to override it? I’d value any perspective from those closer to the action. Just looking to understand more. Thanks, clementkwok
you dictate the rules and you don't know? banks don't want risk at all, so in their effort to avoid risk they eliminate the ability to make money. even with this stringent risk control look how poor the industry performance is as a whole. if you want me to shit like a bird (risk) i can't eat like a elephant (profit) ... btw you track the profit factor and average trade for performance deterioration. you don't override the model you switch it like portfolio rebalancing but with models.
From my point of view, totally ignored. The day I ever consider anything or anyone at that level is the day I stopped being profitable.
Uninformed post from a guy who claims to have a lot of experience. lots of banks have very loose risk limits. Some have tight limits. Some have flexible risk limits. I’ve been told that at Goldman if you exceed your risk limits you are brought into an office to explain your position. If management likes what they hear they can tell you to triple it.
please tell us everything you know about banks allocating funds and or risk profiles i have 5 seconds that should be more than enough time for the depth of your knowledge. i know all the big banks have similar mandatory parameters you must meet or you don't even get a meeting.
get a meeting for what? The fake OP is talking about bank traders and their internal risk mandates. and clearly every bank has different tolerances for risk. That’s why bear stearns and Lehman went under and Goldman and Morgan Stanley didn’t.
Traders are liberal, while boards are conservative and risk averse. If you work for a company you have to respect their rules and structure. The best traders in the world are certainly not employees of anyone.
Helpful Aspects: Clear boundaries. Traders know what’s allowed, which reduces ambiguity and protects them from making career-ending mistakes. Risk limits, these help prevent blowups especially in volatile markets and keep the firm solvent. Hindrances: Slower execution, approvals, documentation, and oversight can delay trades especially in fast-moving markets. Innovation bottlenecks, new strategies or products often get bogged down in layers of review. Overly cautious culture, some desks feel stifled by risk aversion, especially if past scandals have led to hyper regulation. Ignored: Grey zones, traders may push boundaries, especially if incentives are tied to performance. Cultural gaps, risk teams and traders often speak different languages one focused on exposure, the other on opportunity. In short, it’s a balancing act. The best banks foster a risk-aware culture that empowers traders rather than handcuffing them. But when governance becomes too rigid or disconnected from market realities, it can feel like a drag. If I were you: Set the limits. Trade, day, week, month. Then get out of the way and let the pros do their thing.