Product Controller: 'If You've Been There For A While, It Becomes Harder To Suddenly Say: By The Way, I Am Gay'

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The best way to go about it is to slip it into a conversation, very soon into your new job.

He wrote in to the blog offering insights on being gay in finance and on his work in product control, a role he helpfully described as "an accounting, risk and compliance function which independently verifies traders' profit or loss, and also helps prevent rogue trading", adding "I'm not very good at making my job sound sexy, am I? Perhaps this is why I never end up talking about work at parties".

This monologue is part of a series in which people across the financial sector speak to Joris Luyendijk about their working lives.

"There are handicaps to being gay in finance, if you want to call them that. For example, the sports thing. I have tried to take an interest, after noticing that not knowing anything about football cut me out of a lot of conversations. But it's so time-consuming! There are all these teams, and they play so many matches, and you're expected to know all the results and all the players. Basically, I've given up on that.

"The kids topic … I know of older gay bankers who find themselves shut out of many conversations because they don't have them. However, people in product control are quite a young population. Most tend to move jobs before having kids. It's a pretty pyramidical structure and by the time you're in your mid-30s there's nowhere to go in the bank and you move elsewhere. We're all accountants so it's not difficult to change industry.

"Generally I have encountered no homophobia at work. In university it was different. When I told people there, a good 90% was completely confused. It was clearly their first encounter with a gay person.

"In the workplace, it's best to come out quickly. You don't get terrible homophobic jokes but it's a trading floor environment so there is a lot of banter. This is one reason to come out quickly, to prevent people from embarrassing themselves with a homophobic joke.

"The best way to go about it is to slip it into a conversation, very soon into your new job. I would drop the word 'my partner', then see if there was this moment of confusion in the other's eye, indicating they had understood and they are frantically asking themselves how to react. Given that some people now talk about their wives as 'my partner', it's probably best to include your boyfriend's name, too. The best approach is to find somebody who is a bit of a gossip. They'll spread the news for you. You really don't want somebody who is really discreet for this.

"I have always been very relaxed about it all. I remember when I told people there was one guy who froze. I could tell that he was thinking to himself 'and you seemed so normal'. What's the picture across the industry? In my group of friends all have told at least one colleague. But two in five are not out. The thing is, if you've been there for a while, it becomes harder and harder to suddenly say: look, by the way, I am gay.

"Are there areas in finance where gay people are over-represented? Well, the regulators are full of them, don't know why really. Maybe the public sector ethos? In our bank the marketing department has quite a few. There is a gay network in the bank, but it's not championed in the same way as, say, women's networks. There's a lot of talk about the percentage of women in executive positions. No such things exists with gays, ha ha: 'We need at least 10% gay people in the board room.' No. You see very few, if any, gay people in trading front office positions. Discrimination? I am not sure. I would say that the front office appeals to a certain type of person, and it's an environment that, as a gay man, I don't find particularly welcoming or appealing. You just really don't wanna work there.

"I have also worked in the public sector where you get none of this. But in banking you are definitely expected to get shit-faced with your colleagues every once in a while, then make something of a tit out of yourselves. It's about creating a shared, slightly shameful experience. I remember going to this strip club one time, and how we clearly formed a group by doing that. It's less titillation than bonding.

"Although a qualified accountant I'm not from a particularly quantitative background and I still get intimidated sometimes by the jargon. It's like people deliberately talk in riddles. I really wasn't prepared for how sophisticated many traders are.

"Drugs and strip-clubs? I don't think that happens with the traders I deal with. At least not to a greater extent than in other industries. 'My' traders just aren't like that. They are in it to make money, not spend it. They are not smartly dressed or something – again, very different from the stereotype. The atmosphere is macho, and there are very few women in front office (where the traders work – product control is known as middle office). There are more and more women in finance, but not as many in front office.

"The public stereotype of them is these private-school assholes gambling the day away. In my experience that's doubly incorrect. One, traders are held by very strict risk limits; that is, they cannot take risks beyond a predetermined level. If they do, they get fired. Second, most traders by now are geeks, people with a head for maths.

"They are obviously very intelligent, and have this confidence bordering on arrogance. I don't have that – but they must have it, or they'd fall apart. They have to make so many snap decisions that they cannot allow for doubt, or self-doubt. Myself, I am much more aware of my weaknesses. When I have to work something out, I like to sit down and think it through, even if that takes time. Also, traders often hold 'positions' overnight, meaning they have bought something and haven't sold it yet. What this means is that they are running a risk of that thing losing value. Again, I really wouldn't deal with that very well. I like to go home after I've done my job and switch off, rather than worry about what the market is going to do the next day.

"Some people in product control have a game-plan, in that they hope to advance to front office and become a trader themselves. Obviously, after a few years you really get to know the products that are traded, you get to know the market, and you are often the first to hear about job openings. I have no ambitions in this regard. Also, job security is worse. One guy I know moved to front-office only to be made redundant six months later.

"Before the crisis traders had lots more power. Now there are many more control functions and they are under much more scrutiny. Also, there's a focus now on the balance sheet. The focus is no longer simply on how much money you make, it's on the risks you took to make it, and the capital you used to make it.

"What's the hardest thing to explain about my job to outsiders? I wouldn't know. As soon as I tell people that I am accountant in product control, the conversation stops. I don't mind, I am not very interested in talking about my work outside work.

"The short answer of what I do: I tell traders how much money they have made that day. It's called the Profit & Loss, or P&L.

"I am in derivatives. Traders buy and sell derivatives all day, and at the end of that day we need to know two things: how much money they have made (or lost) and how much money is at risk if the market moves one way or another (their "risk position").

"Derivatives can be pretty complex, and 'illiquid', meaning they don't get traded a lot, or at all, so it's harder to determine their value. Compare it to a very rare painting. To figure out how much they are worth, you cannot just consult a market, as there is no functioning 'liquid' market for them. So we use models, and observe similar trades.

"Usually traders have a good sense of what their P&L is, but sometimes we arrive at a very different number and you get a massive bollocking. Any trader worth their salt should know how much money they have made or lost at the end of the day, and should not need you to tell them. So if the final number you're giving them is totally different to what they were expecting, it means they don't understand their risk position, their own books, properly. Which, understandably, can make them quite upset. Thankfully this sort of thing is pretty rare.

"Product control is an interesting part of banking because on the one hand you are reporting for the regulators, the auditors, the shareholders and you're trying to stop the rogue traders who could bring down the bank. But on the other you are answerable directly to the front office, whose interests lie in the other direction. It can be an extremely difficult balancing act – particularly in the world of investment banking where traders don't particularly like to be told what they can and cannot do.

"You ask about rogue traders. There is now a big focus on this, after all the scandals. Rogue trading is not about greed. It's about desperation. They know they are going to be discovered some day. But they are just postponing the inevitable. Rogue traders are people who made a mistake or lost money, then tried to cover that up.

"Truth is that the scale and complexity of a major bank's trading operation makes for opportunities. Every trader runs one or more so-called 'books' with all his trades. But when a trader leaves for another job, the book usually stays on the system. So you have thousands of old books from traders who stopped years ago. Somebody with intimate knowledge of the systems might try to squirrel away some trades. Another way is to cancel and rebook a trade every few days so it never gets processed properly, and flagged up.

"If product control were a beast in the animal kingdom? Hmm, what sort of animal goes around lots of other animals but doesn't get eaten? Also, there's lots of us, and we are engaged in an activity that in and of itself makes no sense but which is indispensable in the greater scheme of things. Maybe bees? Or ants?"

• To comment on this interview, please visit the accompanying blogpost

Powered by article was written by Joris Luyendijk, for on Thursday 23rd May 2013 11.00 Europe/London © Guardian News and Media Limited 2010


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