Risk Management Group
Risk Management Group (RMG) functions include Credit; Prudential, Capital and Markets; Market Risk; Operational Risk; Compliance; Quantitative Applications and Internal Audit.
The Chief Risk Officer has oversight of Internal Audit jointly with the Board Audit Committee. An overview of RMG divisions is provided below and a full Risk Management Report is contained in the Macquarie Group Limited Annual Report.
The Credit Division assesses and minimises the risk of loss arising from:
- the failure by counterparties to repay loans or honour contracts
- equity investments
- equity underwritings
- investments in funds
- investments in leased or traded assets.
Prudential, Capital and Markets (PCM) confirms that Macquarie discharges its obligations to APRA and other prudential regulators, including compliance with prudential standards, and maintains a constructive relationship with the regulators. PCM also monitors aggregate risks across all risk types relative to Macquarie’s economic capability to bear risk.
Market Risk develops and monitors the necessary framework to constrain the risk of losses across both banking and trading portfolios that may arise from adverse movements in market prices and volatility.
Operational Risk ensures that an appropriate framework exists to identify, assess and manage operational risk from a Group-wide perspective. Macquarie defines operational risk as the risk of loss resulting from inadequate or failed internal processes, people or systems or from external events. It is also responsible for Macquarie’s operational risk capital measurement methodology.
Compliance assesses regulatory and reputation risks from a Macquarie-wide perspective. It creates Macquarie-wide policies and procedures to manage these risks, and it monitors and oversees the management of compliance risks by each of Macquarie’s businesses. A significant number of Compliance staff are co-located with the business and confirm that day-to-day compliance obligations are discharged at the business level. These staff report into the Regional Head of Compliance and ultimately into the Global Head of Compliance.
The Quantitative Applications Division reviews and approves all pricing models used within Macquarie’s trading systems. QAD is also responsible for the testing of models which are used for calculating capital for financial or regulatory disclosures.
Internal Audit provides independent assurance to senior management and the Board Audit Committee on the quality and effectiveness of Macquarie’s internal controls, risk management and governance systems and processes.
RMG’s oversight of risk is based on the following five principles:
- Independence – RMG is independent of Operating and other Central Service Groups. The Head of RMG, as Macquarie’s Chief Risk Officer, reports directly to the Chief Executive Officer with a secondary reporting line to the Board Risk Committee. RMG approval is required for all material risk acceptance decisions
- Centralised prudential management – RMG’s responsibility covers the whole of Macquarie. It assesses risks from a Macquarie-wide perspective and provides a consistent approach across all operating areas
- Approval of all new business activities – Operating areas cannot undertake new businesses or activities, offer new products or enter new markets without first consulting RMG. RMG reviews and assesses the risks, and sets prudential limits. Where appropriate, these limits are approved by the Executive Committee and the Board
- Continuous assessment – RMG continually reviews risks to account for changes in market circumstances and developments within Macquarie’s operating areas
- Frequent monitoring – Centralised systems exist to allow RMG to monitor credit and market risks daily. RMG staff liaise closely with Operating and Central Service Groups.
The Group currently has staff in Abu Dhabi, Adelaide, Auckland, Bangkok, Brisbane, Cape Town, Chicago, Christchurch, Edinburgh, Geneva, Gurugram, Hong Kong, Houston, Jacksonville, Jakarta, Johannesburg, Kuala Lumpur, London, Manila, Melbourne, Mumbai, New York, Perth, Philadelphia, Seoul, Shanghai, Singapore, Sydney, Taipei, Tokyo and Toronto.
Graduates work with industry leaders to develop their knowledge of financial markets. There may also be opportunities to work on assignment offshore.
Macquarie offers a structured training program covering a variety of technical, business and personal development courses. Support is also available for further external study.
Macquarie offers graduate opportunities in a number of divisions within Risk Management Group.
Prudential and Regulatory Affairs (P&RA)
Prudential and Regulatory Affairs (P&RA) works with the Australian Prudential Regulation Authority (APRA), which oversees the financial services industry, undertaking both qualitative and quantitative analysis. Graduates in P&RA learn about the relationship between Macquarie and APRA in a challenging but rewarding environment.
- learn about the rules that govern Authorised Deposit-taking institutions (ADIs), including capital adequacy, funds management, securitisation and corporate governance
- undertake risk-based, independent analysis of transactions and new business proposals to ensure compliance
- work with all of Macquarie’s business groups and support functions
- understand the global regulatory landscape for global financial services.
The Quantitative Applications Division (QAD)
The Quantitative Applications Division (QAD) is responsible for developing and reviewing models used for both option pricing and for calculating Macquarie’s capital requirements. QAD also provides consulting on quantitative and modelling issues.
Graduates in QAD work alongside experienced quants and have the opportunity to:
- test financial models used for trading, hedging and portfolio management
- develop statistical and simulation models for risk management
- ensure all groups comply with regulatory requirements and have sufficient capital for potential losses.
Risk & Capital Analysis
Graduates in the Risk & Capital Analysis (R&CA) team will work on a wide variety of risk-management and risk-strategy tasks and projects. After extensive training you will be given the opportunity to review deals independently by the end of your first year.
Graduates in the Risk & Capital Analysis division:
- help apply and refine the Economic Capital Adequacy Model to manage Macquarie’s capital position
- develop new risk methodologies to determine the amount of capital required to support a certain product or business line
- create and run group-wide stress tests to quantitatively simulate different market scenarios
- analyse and approve new deals which involve applying Macquarie’s statistical models to identify capital requirements and expected rate of return.
Compliance ensures regulatory and compliance risks are identified and appropriate standards applied consistently to manage these risks from a group-wide perspective. Graduates in Compliance have the opportunity to work with Macquarie’s businesses to ensure they meet their obligations under applicable laws and regulations.
Graduates within Compliance learn to:
- interpret and research domestic and international laws and regulations to formulate risk-based policies and procedures that apply Macquarie-wide
- assist with training the businesses on their responsibilities, approving transactions and client relationships
- assess the compliance risks in proposed new products and advise on ways to minimise the risk of breaching the relevant laws and regulations.
The Credit team’s role is to assess and approve all material credit risk undertaken by the Group. Graduates are given responsibility for a set of counterparties and are encouraged to formulate and communicate their views.
Graduates within Credit learn to:
- assess the credit appetite of counterparties which involves financial statement analysis and due diligence to make recommendations to senior approvers
- monitor credit exposures against credit limits
- conduct portfolio monitoring and analysis, country risk analysis and work on large transactions.
The Internal Audit team’s role is to work with stakeholders across all of Macquarie’s businesses to understand and assess the processes and controls that support the organisation.
Graduates joining Internal Audit will take part in:
- designing and performing tests to validate that processes and controls are operating as intended
- identifying and escalating issues
- assisting with audit report writing.
Summer internship program
You’ll have first-hand experience of what it’s like to work at Macquarie. Our 11-week structured program provides training and a range of social activities to grow your business networks.
Summer interns will join a particular division within the Risk Management Group for the duration of the program. Within your division you will be encouraged to undertake a project with a focus on a genuine business matter and your findings may be utilised and acted upon.
Risk Management Group summer interns also participate in training and information sessions on Macquarie’s divisions for a well rounded exposure to the group.
Is a role in Risk Management Group right for you?
We are looking for high-calibre students from a range of disciplines, including but not limited to, accounting, actuarial studies, business, commerce, economics, engineering, law, mathematics, statistics, sciences.