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What Does a Market Risk Analyst Do?

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  • Written By: Mary McMahon
  • Edited By: Nancy Fann-Im
  • Last Modified Date: 08 November 2016
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A market risk analyst works with a financial firm to help it predict and address market risk in a variety of dynamic ways, from changing policies to rolling out new products and services. Careers in this area of the financial industry usually require a four year college degree at a minimum, with an excellent grade point average. Work experience through internships in college can also be beneficial. Starting salaries may vary, but are often low for novice market risk analysts.

One aspect of the work requires researching and assessing risks in the current market, along with risks that may develop over time. The market risk analyst could focus on a particular sector or look at the market as a whole, and may work with other personnel like the staff members who develop financial products and interact directly with clients. The data compilation aspect of the job can be time consuming and may require very good observational skills and the ability to dig deeper when something looks peculiar.

The market risk analyst must also be capable of data analysis, using mathematical models to explore and quantify risk. Raw data is too cumbersome to work with directly. Analysis distills the information into an understandable format and can highlight underlying patterns. The market risk analyst might start to find links between different sectors of the market that were not apparent before, for instance, or could spot an area of the market that appears to be due for a tumble.

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Market risk analysts also make recommendations. They rely on the outcome of their analysis to support their arguments when meeting with executives and other company officials. The analyst can participate in activities like developing new products and changing company policy, and will apply analysis to help the company decide on the safest and most appropriate move in any financial conditions. Sometimes this involves making recommendations for or against particular business moves, while in other situations, the market risk analyst may suggest ways to restructure a proposal to lower risk.

These finance professionals must be familiar with legal issues as well as economic topics. Their parent companies must exhibit regulatory compliance at all times. Since the law often changes, the analyst needs to keep up with changes in the law so she can advise the company on how to get into compliance if regulations shift. The analyst may also examine proposed regulations and legislation to determine the risks they create for the company, as this information will help the company decide how it wants to respond to a changing regulatory climate.

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