BAML’s central risk book gets a facelift

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Changes are underway within Bank of America Merrill Lynch’s central risk book (CRB). The group recently hired away a veteran trader from J.P. Morgan’s CRB, and rumors are swirling that’s not the only move.

Former J.P. Morgan executive director Nuri Sercan Ozbay joined BAML earlier this summer, according to a source. Finra’s records show that Ozbay is now registered with Merrill Lynch and he is no longer in J.P. Morgan's directory. Ozbay spent the last five years working within J.P. Morgan’s CRB in New York, according to LinkedIn. He was formerly a VP at Citi where he also traded within its central risk book. Ozbay has a master’s degree and PhD in operations research from Columbia University.

Central risk books, which use highly complex quant models to identify a bank’s net exposure and make systematic trades to hedge against risk, are known to employ some of the sharper minds in banking. CRBs are also a bit of a hot-button topic as some have argued that they are distant cousins of prop trading and dark pools, which have been outlawed. However, the idea behind CRBs is to trade to mitigate risk, not necessarily make money. Banks and hedge funds have relied more on their CRBs in recent years, making traders with the experience highly-valued.

We’ve also heard rumors that there may have been a change in management at BAML’s central risk book but have so far been unable to confirm the moves. Bank of America didn’t respond to requests for comment on the hiring of Ozbay or rumors of a possible management shakeup. Ozbay didn’t respond to a request for comment.

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