Are middle office folks (those product controllers, compliance types and risk management professionals) taken for granted ? Some feel that they are.

Fed up with being treated like second class citizens (stiffed on bonuses, etc) and being shouted at by all-powerful traders for daring to question trades, many compliance and risk professionals have shifted jobs in the last couple of years, trying to find firms which truly embrace a risk culture and appreciate the skills and experience risk professionals bring to middle office roles.

And, with three major cock-ups in the financial markets this year alone, the need for an effective risk management cadre is unquestionable. SocGen will nurse its $7.1bn rogue trading headache for years, Credit Suisse's subprime hubris took a knock when it came out and confirmed a few weeks back that it was having to take a $2.85bn charge due to pricing errors and, just last week, Lehman Brothers came out and said that it had suspended a couple of traders because of valuation issues.

Would more effective risk management (or at least an environment in which the voices of risk professionals were actually heard) have resulted in fewer asset writedowns at the likes of Citi, Merrill Lynch Morgan Stanley and UBS ? Perhaps. Would those trading losses incurred last year at the likes Bank of Montreal, Calyon and WestLB have been so severe if risk really had a seat at the table ? And would Jerome Kerviel now be a household name if SocGen's middle office had been staffed by respected, efficient and determined professionals ?

The last 18 months or so have seen a number of firms take significant hits due to rogue traders, silly traders, over-eager traders and myopic traders. Many firms wouldn't be nursing such large headaches if they had focused more on the middle office, rather than being seduced by promises of untold riches by those front office types who had a vested interest in taking large positions, and little to lose in the event that trades went bad.

READER COMMENT

1. 'I work in risk management. I recently left a large US firm as I was sick of being pressured to sign-off on things I didn't agree with, fed up of being shouted at by arrogant traders and disgusted by the lack of esteem granted to anyone not working in front office'.

2. 'In some places I've worked over the years, front office staff think that they are untouchable. We know that that's not the case anymore - just ask staff at SG, Credit Suisse and Lehman. Risk professionals, however, are much more capable and knowledgeable than we are given credit for!'.

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