In the performance of their role, product control interact with numerous functions, each of which vary regarding their importance and frequency with which they interact. This chapter will introduce you to those functions which product control most commonly interact with.
Figure 3.1 illustrates the typical levels of interaction Product Control will have with each function.
Front Office: Sales and Trading Desk
The front office staff have three main objectives:
- Provide the bank's clients with a suite of products to meet their investment and risk management needs.
- Risk manage the bank's market and credit risk exposures to safeguard the bank from adverse market movements.
- Participate in risk-taking (proprietary trading) to generate profits for the bank.
The front office are the most significant stakeholder who product control interact with. In most banks they are considered a client of product control whilst also being a function that product control must monitor and control. There is also a high level of interdependency between the two functions as the front office have a large vested interest in ensuring the P&L accurately reflects their performance.
The front office rely primarily on product control for the following:
- The provision of a daily P&L.
- The reconciliation of this P&L to the desk's ...