I want to follow up on last week’s column about the lack of risk takers in FX.
Firstly, several of you reached out to me to share your thoughts and clearly there are some concerned people out there who believe the foreign exchange industry is vulnerable to more flash type events because of the lack of skilled people able to take risk.
This was reinforced when talking with a friend at a major buy side firm who shared the story of the search for a person with the ability to handle large risk and execute it into the market over time, and not just by using an algo (although that is part of the brief).
Interestingly, my friend explained that the firm concerned wanted a diverse group of candidates, but after much searching, including from a professional recruitment firm, they failed to come up with suitable candidates that were either female or provided an ethic diversity.
It is easy to take this story as evidence that the foreign exchange industry has a diversity problem – and maybe it has – but to me the two issues are one and the same, there is an absolute lack of qualified people to handle the role of what is effectively a trader.
Any diversity issues the FX market has when it comes to traders able to handle risk (and I think several firms are working hard in this area when it comes to other areas of the business) is of its own making, because the very small talent pool has meant it couldn’t diversify. Had the industry not spent the last decade and a bit trying to rid itself of the risk management/execution function, then it would have had a great opportunity to build diversity into the fabric of the market.
That to me is the real lesson – not only is the industry risking instability (and the commensurate knock to an already tarnished reputation), but it is not giving itself to the best chance to accurately reflect the wider world in terms of the mix of people that make it up.
I pointed out earlier that several firms are working hard to build diversity, but I ought to temper that. We try hard to engage a diverse range of speakers, in particular female speakers, and we know several who know their subject matter, are articulate, and would be a perfect fit to discuss the issues of the day on a platform. We approach institutions for their participation but too often are directed to someone else (in the same business line I have to stress), who more often than not is male.
I do not wish to sound “bleeding heart” on this, but I have over the years, worked with several talented women in the trading role and it bugs me that both there, and in the wider sphere of public speaking, they appear to be kept in the background.
Foreign exchange is an innovative industry, but to me this is one area it can seriously improve upon. I understand why there is a lack of diversity in trading – it reflects the limited training opportunities available in this field – but I don’t get why we can’t get more female speakers and interviewees.
Perhaps the institutions concerned feel the people we request are not adequately trained for speaking on a panel – they haven’t had the media training. If that is the case, can I humbly suggest that they do something about it? There is a real problem with risk aversion in the industry, it should not extend to who we get to see and hear on public platforms.