Risk management
This is a function that can sit well in the middle office provided it is properly staffed by officers who understand fully the business and risks involved – which usually means ex-market practitioners. It can range from agreeing overnight cash positions for the trading room through to full-risk modeling associated with derivatives trading and hedging. In between can come monitoring of counter party, country, dealer and market-related limits that have been set and approved in other areas of the bank such as the credit department.