How do investment bankers deal with stress
When I am asked where exactly the interest in the investment banker profession comes from, I cannot answer that clearly. The world of finance has always fascinated me. Investment banking in particular - probably because it is very complex.
Interest early on
My interest can also come from my father's job. He's worked in finance for as long as I can remember. He was head of a bank for over twenty years before he became a director of a public company that operates in the real estate sector. Of course, you also see how much money is being made in this industry, which certainly creates motivation and incentives. And it's no secret that a lot of money is made in investment banking. I think it is the combination of professional interest and incentives that made me want to become an investment banker very early on.
In order to pave the way for this right from the start, I attended an economics high school and studied business administration at the Würzburg University of Applied Sciences. In the last few semesters, I focused on banking, finance and investment, and financial services. During my studies, I did an internship in the financial metropolis of Frankfurt with a service provider in the area of investor relations and general meetings.
Another side of investment banking
There I got to know the industry from a different angle than I would in an investment bank. I gained an insight into the duties of listed companies and learned how to organize a general meeting, to write an annual report or an ad hoc announcement. These activities tend to include the duties of a client of an investment bank.
An internship at a hedge fund company in Zurich gave me another perspective on finance. Here I learned how such a fund is managed and how its values are selected. It was my job to analyze stocks in order to then come up with a recommendation for action.
I did that by looking at the last published numbers and comparing them with the numbers from the previous year. I also read numerous analysts' opinions and stayed up to date on the entire stock market. I was allowed to take part in meetings with analysts from the major banks and attend trade fairs.
Pressure and stress are typical
The closer you get to the typical business of an investment bank, the more you feel the pressure and stress in this job. The atmosphere in such a bank, which trades with high volumes, is very tense. But that's actually still an understatement. In my opinion, you shouldn't be an unstable person. New employees should be able to swallow some things and work under pressure, because loud discussions are not uncommon. But even that can be learned.
This year I am starting my Masters in Business Management at the University of Würzburg. I have decided to complete both a practice-oriented course at a technical college and a scientific course at a university. I think that gives me a huge advantage, as some have prejudices against the universities of applied sciences, others against the universities. By studying at both institutions, I learn practical thinking as well as scientific work.
All is not bad about investment banking
When I express my career aspiration, I am often looked at with skepticism. But all is not bad about investment banking. The basic idea is a good one in my opinion. In recent years and decades, however, the investment banks have drifted further and further away from their actual business. You can accuse them of that, as well as that they have focused far too much on proprietary trading in recent years. But that will change again now that many banks want to cut jobs in this area and minimize or even abolish proprietary trading.
In short: concentration on core competencies is the order of the day. This brings areas such as support in structuring the financing of major projects, derivatives, M&A, equity capital markets and trading for customers back to the fore.
When I am asked whether I can work as an investment banker with my conscience, I always answer: What is wrong with, for example, advising and mediating a company when taking over another company? Basically, I don't see anything bad in helping a company to hedge against interest rate and currency risks using derivatives. This even prevents the increased prices from being passed on to customers due to unfavorable interest rate or currency developments.
Not every investment banker is immoral
The question is, how does the individual act? There are certainly many investment bankers who use their position and knowledge to enrich themselves and the bank, but that doesn't have to be the case. This is particularly the case in proprietary trading, which is now being scaled back. It depends on the individual whether he acts immorally or not. That means: not everyone who works in investment banking acts immediately against morality, but only those who act immorally can be accused of doing so.
To all those who are really interested in this subject area, let me say: Do not be put off because you will be looked at with skepticism when you express your career aspirations. In my opinion, you don't have to feel bad about being passionate about finance and especially about the job of an investment banker. It is important that you enjoy your job and that you live your dreams. Do not live the lives of others, but your own! You're not a weak character because you choose this job. On the contrary, you are strong because you keep going despite all the criticism.
As an investment banker, ambition and discipline are important
The qualities that an investment banker needs are ambition, discipline, a stable personality, resistance to stress, performance under strong pressure, a keen interest in finance and the stock market - and a strong will to really do this job.
Jasmin Schwab, born in 1987, attended an economics high school before studying business administration (Bachelor of Arts) at the Würzburg University of Applied Sciences. Her focus was on banking, finance and investment, and financial services. The topic of her bachelor thesis was "Company valuation in the case of IPOs". She completed several internships, including at a Frankfurt financial services provider in the Investor Relations department and at a hedge fund company in Zurich. Our author is currently studying Business Management (Master of Science) at the University of Würzburg.
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