How Quant Hiring Shifted After the Financial Crisis
Summary
The document describes how quantitative finance roles changed after the financial crisis rather than simply becoming more or less plentiful. It points to reduced activity in some exotic derivatives and credit products, alongside more work on funding, liquidity, collateral, counterparty risk, and bank capital requirements. Electronic trading has also expanded quant work into inventory control, pricing, and hedging decisions, while hedge funds use quant teams to analyze broker and alternative data.
The answer offers an industry-level explanation, not hiring statistics or a forecast. It argues that entry into the field has become harder because the pool of qualified candidates has grown and employers increasingly expect finance knowledge and strong programming skills. Its examples focus on financial institutions and hedge funds; the document does not compare regions, firms, or specific career paths.
Key ideas
- Quant demand shifted toward new problems rather than clearly declining overall.
- Some exotic derivatives and structured credit products became less active after the crisis.
- Funding, liquidity, collateral, counterparty risk, and capital rules created additional modeling work.
- Electronic trading and hedge fund data analysis expanded the range of quant roles.
- Entry-level applicants face stronger expectations for finance knowledge and programming ability.
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Full text
# Is being a quant as easy to look for high paid jobs as before # Is being a quant as easy to look for high paid jobs as before I've heard quants are not as popular as before, due to regulations etc, there's less things to do in terms of maths and algorithms. I wonder if it's true? ## Answer by Chris Taylor (score 6, accepted) https://quant.stackexchange.com/a/43177 The kind of jobs a quant would do has changed a lot since the crisis. I wouldn’t say there is more or less demand for quants, just that there is demand for them to do different things. For example, - Certain derivatives and structured products are less popular than they were before the crisis. For example, exotic equity or fixed income derivatives see much lower trading volume and hence less demand for quants to work out how to price and hedge them. - Credit products are more straightforward now, and less popular. CDOs got a bad reputation after 2008. - Funding costs, liquidity, collateral and counterparty risk are taken seriously now, so linear desks have more to do (building funding curves for different currencies and different grades of collateral) and XVA desks (comprising credit, funding and liquidity valuation adjustments) have grown. - New regulations on bank capital mean more work for quants, both to ensure that regulations are complied with, and to optimise the bank’s capital structure for the new regulations. - Electronic trading has grown, and quants are required not just for their traditional role (models for pricing off-market derivatives like swaps, options and forwards) but also for the roles that would traditionally have been done by human traders (inventory management, pricing, hedging decisions). - Quant hedge funds have grown, and even discretionary hedge funds often hire quant teams to analyse the large amounts of data being produced by sell-side brokers and alternative data providers. In general I think that it is harder to walk out of a PhD in math or physics with no experience, no knowledge of finance and no programming ability, and get a job as a quant. But that’s not because quants have become less popular or less in demand - it’s because the supply of good quality candidates has increased, and employers increasingly expect applicants to have finance knowledge already, and to be able to write good quality code from day one.
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