A big thank you to Andres Jaime for writing a guest blog post sharing with us what he learned whilst working at a Central Bank. As an introduction, Andres is currently reading a Masters in Mathematics of Finance at Columbia University. Before that he worked in various teams with The Central Bank of Mexico. Banco de México was established in July 1931.
Here's his summary...
My 5 years at the Banco de México were definitive in forming and solidifying my passion for my job in the financial markets.
Before I joined the bank I had a vague idea about what financial markets are, how they work, their size and their complexity. I''d gained that via a first degree in Economics. My time at the bank brought to light the huge implications that financial decisions have on the real economy, and as a consequence on the world.
I began my career in the bank at the money market operations desk, in which all the monetary policy for Mexico is implemented. During the first year I wasn’t aware of the big responsibility that this implied. Open Market operations provide liquidity to banks, which my team worked on, as well as being responsible for the primary offer of Mexican debt denominated in MXN (Mexican Peso).
While I learnt a lot during my first year, a big shift came about with the financial crisis. From a policy maker perspective it was a significant challenge, since almost no one had experienced a similar situation before. The excitement and challenge of solving complex problems while the financial system was collapsing liquidity, market depth and pushing real economy into recession were the main reasons why I was so attracted to financial markets. Furthermore, during the crisis, the high volatility in the MXN market was very difficult to cope with. Managing speculator flows while trying to keep the “free float” of the currency was a very hard task for the local desks. I remember the day when we all began in the Mexican markets, the turning point was when the General Director of operations stepped into the trading room and he started trading as he did 30 years ago.
Later on, I was promoted to the international foreign exchange desk, in which a considerable share of the international reserves is managed (EUR, CAD, GBP, JPY, CHF, NZD, AUD and Gold). During the two years I spent at the desk, I had the opportunity to lead a team of very young people to whom I delegated a lot of significant tasks. One of the most fun and challenging projects that I headed was an important gold accumulation program (100 tons). One of the main problems was the time restriction of one month for completion, which made this program one of the fastest occurring in the last 10 years. Some other diversification programs came out during the last year when we included AUD and NZD into our basket of tradable currencies.
Throughout my career *crisis* would be a word that most accurately has described markets for me. In the following years, we will experience an evolution in the nature of financial markets, perhaps adopting different features for all of us; and it is exactly that which makes them addictive and motivates me to continue to play a role in them.
So, having read a degree in Economics and then spent five years at a Central Bank, Andres hopes that his Masters study can take him into a role where he can be directly involved in investment strategies. This would ideally be a quant role but more involved in the macro side of markets and taking part in investments.
It was very enjoyable talking with Andres. You can keep in touch with him via Twitter. His handle is @andres_jaime.
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