Graduate / Personal Statement for Msc Financial Economics (an investment bank) [5]

Please review my SOP. I will highly appreciate your feedback.

I now understand what Dr. King meant by the fierce urgency of now! Mr. Mohamed Nasheed, the President of Maldives, said "If things go on as business as usual, we will not live! We will die! Our country will not exist!" at the Copenhagen summit. But his fervent concerns were overlooked, as world leaders agreed to what can only be described as a spiritless Copenhagen Accord. However, the lack of leadership shown by financial institution disappointed me the most especially considering the innovations in the derivatives world over the last decade. It is now difficult to imagine when the credit derivatives market was young; or when insurance derivatives were little more than intellectual daydreams. The above stated eyewitness account, and the frustration I am enduring at XXXX regarding the lack of innovation in developing environmentally focused financial products, led me to comprehend the urgency in developing innovative financing and risk management mechanisms and looking back, I believe this was the catalyst that would bring me to the decision to return to school.

My immediate goal after graduation is to work on a structuring desk at an investment bank. I want to comprehensively understand each aspect of product development in well-delineated and quantified commodities including financial modelling, legal & accounting perspective and apply this knowledge to develop innovative risk management and hedging solutions for managing environmental risk. For example, I want to develop products for the power utilities of the future because, I believe, soon utilities will start to look a lot like banks. They will have variably priced outputs, some with positive prices, some with negative prices such as environmental emissions and variable priced inputs such as fuel. Therefore, the utility will basically act as an asset-liability manager. Imagine, if you have a hot summer, then more fuel is burned, fuel prices go up and more carbon is emitted. Hence, there will be a linkage among energy, weather and environmental derivatives. Therefore, financial institutions need to develop products that mitigate these correlated risks.

In 5 years, I see myself leading an environmental product desk and developing other related environmental commodity markets that are either in their infancy or have not yet been thought of. Specifically, I want to innovate in agricultural based environmental derivatives. For example; farmers, especially soybean farmers, by changing their tillage practices, can now sequester carbon in the soil and grow two crops, soybeans and carbon, and sell these two crops for an to earn more revenue. Long term, I will be well-positioned in my career to bring to fruition the ideas of pioneers like XXXX in the design of environmental financial products. Just as he was able to design an innovative solution to an investor risk problem using interest rate futures in the 1970s and an innovative solution to an environmental problem in the 1990s using the financial markets, I hope that I will be able to further develop the models we are currently working with to provide solutions to the environmental problems of tomorrow.

My interest in the field of environmental finance burgeoned while evaluating renewable energy and structured commodity transactions in XXXX. Specifically, while evaluating a XXXX wind farm transaction, I interacted extensively with Mr.X X and realized the scope of development offered by low-carbon technologies. These experiences helped me understand what I wanted from my life and as much as I enjoyed my career as an Emerging Market banker, I realized that developing environmentally focused financial products is my true passion. Prior to embarking on a career with an environmental finance team at an investment bank, I wanted to gain experience at the grass-root level developing projects under the Clean Development Mechanism of the United Nations Framework Convention on Climate Change and consequently, I launched XXXX. XXXX has provided me with a perfect initial outlet to blend my skills and interests in energy, environment and finance. Now, armed with an environmental ethic and an understanding of the carbon market, I am well-positioned to take the next step in my career. I want to develop an intellectual yet actionable understanding of the intricacies, operations and strategies of the global structured finance market at a level that will help me design new products and thus, the MFE's strong quantitative training in finance and sound theoretical principles have drawn me towards the program.

The rigorous economics and financial econometrics courses will deepen my understanding of contract design and techniques for empirical investigation of uncertainty. I am very eager to attend XXXX's Asset Pricing course to learn to price exotic products, X X's Financial Risk Management course to understand volatility, correlation and operational risk, X X's Trading and Market Microstructure course to comprehend the ins and outs of market trading and X X's Taxation, Finance and Business Strategy course to understand implications of tax factors on corporate decisions to evaluate the viability of emission taxes.

I am also interested in the research pursued by XXXX's on limits to arbitrage and hedging in the commodity markets. I am drawn to the conclusion that limits to financial arbitrage generate limits to hedging by producers, and affect both asset and goods prices. I hope to understand the minutiae of the commodity market in order to develop efficient tools and techniques for managing environmental risk.

But what draws me to XXXX the most is the school's emphasis on research centres. I intend to work with XXXX from the Centre for Business Taxation to understand the impact of different forms of taxation on the behaviour of businesses and utilise his expertise in understanding the viability of a "carbon tax". I want to join the Institute for Quantitative Finance and further develop my knowledge of derivatives on energy markets. I want to collaborate with XXXX and XXXX and capitalize on the work they have done in understanding the evolution in market architectures for carbon trading. For all of these reasons, a MFE from XXXX will be a vital catalyst in the pursuit of my professional goals.

Thanks a lot.

Regards