Ernst & Young plans to hire approximately 20 risk managers to expand its financial services group. Tim Pagett, head of the financial services risk management practice in London, said it aims to bring the risk managers on board over the next 12 months because it anticipates increasing demand in the wake of the proposed Basel Capital Adequacy Accord and a more liquid credit market. He added, "Anybody who works in financial risk department needs to be conversant with all the risks associated with derivatives." There are currently 42 pros in the group.
Increased liquidity in the credit derivatives market is allowing more financial institutions to manage their risk with the instruments, which has created more demand for the group's services, according to Pagett. For example one of the group's functions is advising clients how to set up an infrastructure which allows the institution to use credit derivatives. The group's clients are split equally between banks, insurance companies and asset managers but he expects the new Basel Accord to impact all three sectors because the European Union and the U.K.'s Financial Services Authority are likely to widen the accord's scope to all market participants.
