Front Office

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The Front Office looks quite complex in the slide below. All we need to remember is that the “Front” in Front Office is for world-facing. So in the slide below, you can see functional teams, some of which interact with the external world. These teams are:

  • Economists who talk to the media and receive market inputs that they condense into useable intelligence for the rest of the bank.
  • Sales and Structuring teams who talk to customers to sniff out potential opportunities.
  • Trading Desks, interacting with their peers in other financial institutions and other counter parties.

Front Office

One level removed from this layer of customer or world-facing teams are the quants and quantitative developers of Front Office, along with the risk managing professionals associated with the desks. They play supporting roles to the first layer of teams. Quants develop pricing models, quantitative developers roll them out into trading platforms, and the desk risk management team helps traders monitor and hedge their exposures. Note that almost all the interactions among these teams are mediated by the trading platform. The platform also acts as a conduit between the functions of Front Office and Middle Office. The nature of these functions and interactions of each team will be the topic of the next few posts, starting with the economists. Stay tuned.