Issue 39

28 January - 10 February 1997

A risky business

Rudi Bogni, chief executive of Swiss Bank Corporation, talks about his two-year sabbatical at Imperial College.

When Rudi Bogni, chief executive of Swiss Bank Corporation (SBC), attended university 20 years ago, mathematics was not considered integral to the workings of financial markets and commercially oriented degrees.

Today, Mr Bogni perceives mathematical skills as central to understanding derivative risk management in the banking world, and has taken a two year sabbatical from SBC to study applied mathematics at the Centre for Quantitative Finance.

One year into a programme specially devised for him by directors of the Centre, Gerry Salkin and Nicos Christofides, Mr Bogni seems content with his decision to 'reskill' at this stage of his career. According to Mr Bogni, it was a decision fuelled by two factors in particular. "Finance as a discipline has changed dramatically since I was a young trainee. Basically it has exploded in terms of academic research and become much more quantitative than it ever was. I also felt that having been very 'hands on' in my job for the last 25 years, I needed to go back to basics because when you're working full time, you can try to keep yourself up to date from an academic viewpoint, but you never invest sufficient time. It is not enough to go to the odd seminar here and there and to read in your spare time, because you don't have much spare time."

Choosing Imperial above other British institutions offering quantitative finance had much to do with course directors Gerry Salkin and Nicos Christofides. "I had known Gerry Salkin for a quite a while," said Mr Bogni. "He is very visible in the City and having developed a friendship with him and Nicos Christofides, I felt very comfortable with their approach and thought they were doing very interesting things." Eventually, Mr Bogni asked Mr Salkin to consider taking him on as a student. "At first he was very unconvinced that I would really wish to leave the City for such an extended period," said Mr Bogni. "I ventured that I would like to do it in one year, he countered that two years was the very minimum. So we agreed that I would do a maximum of two years."

Persuading his bosses at SBC was initially as tricky as persuading the Centre for Quantitative Finance to take him on. "It was difficult to argue that at my stage of career it would make sense to have such an extended break," said Mr Bogni. "But I think when the chairman and president realised that I was quite serious about wanting to do this, they became extremely supportive."

Despite holding a degree in economics and business administration, Mr Bogni really did go back to basics under the tutelage of the Centre, sitting mock GCSEs and A levels in maths and statistics. Probability theory, calculus, algebra and stochastical modelling are also on the programme. "It's a course not really designed towards a degree," said Mr Bogni, "but towards the specific mathematics required for my type of business."

Not all of those who share Mr Bogni's business of derivatives are convinced of the benefits to be gained from the study of modern applied mathematics. However Mr Bogni believes that those who do not recognise its importance are avoiding the changing nature of financial markets. "Among the people that I respect there is a genuine understanding of what the issues are. It's not a question of derivatives being a part of the financial markets, they are the financial market now."

Mr Bogni has made the most of his time at Imperial as it is possible that business commitments will not allow him to complete his two year sabbatical.

"I really enjoy reading the Reporter because it shows me things which are going on in College that I wouldn't even dream of," said Mr Bogni. He has also been impressed by the College's special lectures. "Two of the things I've really enjoyed doing this year have been attending the lunch time lectures, and some of the inaugural lectures have been outstanding," he said.

It is clear that Mr Bogni thrives on learning and has enjoyed broadening his knowledge in areas other than quantitative finance. "I do have a broader interest in areas other than my profession," said Mr Bogni. "I've met a lot of academics from other universities, it's been a good opportunity to network and a really good platform for making friendships and meeting people that I'd like to keep in touch with."