"Given his legal background Mr. Wang is probably starting off his IB career in the structuring side focusing on the legal risk aspects of credit derivative contracts. Naturally, the IB team will want to have an experienced lawyer to navigate the legal risks that can be a tricky portion of credit derivative contracts.
Acquiring an understanding for evaluating the credit risk of reference entities and counterparties will probably take somewhat longer. Meanwhile, the mathematical valuation and pricing aspects of credit derivatives will probably elude him for quite a while, given that one needs a strong foundation in applied mathematics in order to grasp the nuances of this field."
In case you got lost in the technical jargon there, this is what the reader meant to say: Mr Wang may have moved from law to investment banking, but (a) he has probably been hired for his legal knowledge, and (b) he's probably clueless about the other, non-legal areas of investment banking.
Apparently, a logical deduction. However, it relies on certain implicit assumptions. These assumptions are commonly made in Singapore and aren't always correct.
In Singapore, we often tend to think that a person doesn't know anything about anything, unless he holds proper qualifications in it. By proper qualifications, we mean that he has gone to school, taken a course, passed his exams and been awarded a certfiicate, a diploma or a degree. Preferably one recognised by the Ministry of Education.
Apparently, a logical deduction. However, it relies on certain implicit assumptions. These assumptions are commonly made in Singapore and aren't always correct.
In Singapore, we often tend to think that a person doesn't know anything about anything, unless he holds proper qualifications in it. By proper qualifications, we mean that he has gone to school, taken a course, passed his exams and been awarded a certfiicate, a diploma or a degree. Preferably one recognised by the Ministry of Education.
Of course, this line of reasoning can go wrong for any number of different reasons. For example, a formal course may not actually teach anything relevant to what the supposedly-qualified person is really doing in his job.
Or skills acquired in one particular field or discipline may turn out to be surprisingly transferable to another apparently unrelated field or discipline.
Or a person may acquire quite considerable expertise without any formal training at all - for example, through self-learning, practical work experience, or because the subject-matter happens to be his favourite hobby.
Last weekend I decided to organise my rather chaotic bookshelves and categorise my books according to topic. This picture shows a stack of banking and finance-related books that I've been reading over the past few years.
(Note: this stack of book excludes my law books on banking and finance - those are in another stack).
I could be wrong, but I suspect that my banking & finance textbooks are more than all the banking & finance textbooks that an undergrad student at SMU or NTU would have to read, over 3 or 4 years, in order to get a degree in Banking & Finance.
Now of course, I have not read all of my books with the same vigour and rigour that a university student, mugging for his exams, would have read his textbooks.
After all, my reading is not for the purpose of passing exams. My books are more for my leisure reading.
I started reading those books when I was a lawyer advising on banking and finance. I thought that it would be interesting to know what all those bankers were talking about.
Or sometimes a certain point would come up at work, and it would puzzle me, so over the weekend, I would just pick up the relevant book, zoom straight to the relevant chapter, and investigate that point. And if that was interesting, I'd just go on to read the next chapter as well.
As the years passed, I just ended up reading more and more.
And suddenly, I realise that if I add it all up, my total knowledge about investment banking is .... Very Not Insignificant. (Pardon the twisted language. I'm trying not to sound boastful here).
So while law is still my professional forte, I've come to understand enough about other areas of the financial world to feel comfortable in an investment banking environment. I know enough to engage constructively with the traders, the structurers, the salespeople, the quants, the lawyers, the accountants, the credit officers, the tax advisors, the economists, the relationship managers, the compliance personnel ... and whoever else I need to engage with.
To function effectively, I don't need to know everything that all of them know (which would be impossible and impractical). I just need to know enough about what each of them knows.
In Part 2 of this series, I will share some thoughts on information and knowledge networking. You might also call it "Why You Don't Need To Know It All, To Know It All".
Gadis Bispak Imut
