Product Control

Product control is a key function within investment banks that is responsible for ensuring the accuracy and completeness of the financial information produced by the bank. Product control teams work closely with front office trading desks, risk management, and other support functions to provide independent validation of the profitability of trades, the accuracy of risk measurements, and the completeness of financial statements.

Product control teams typically perform a range of activities, including:

Profit and Loss (P&L) reporting: Product control is responsible for producing daily, weekly, and monthly P&L reports for trading desks. These reports provide an analysis of the performance of the desk, including revenue and expenses, and help traders to understand the profitability of their positions.

Balance sheet substantiation: Product control is responsible for ensuring that the bank's financial statements are accurate and complete. This involves reconciling the bank's books and records with those of third-party agents, ensuring that all transactions have been correctly recorded, and verifying the accuracy of account balances.

Control and validation: Product control is responsible for verifying the accuracy of risk models and ensuring that risk measures are correctly calculated. This involves testing the output of risk systems against market data and validating models to ensure that they are functioning as expected.

Performance attribution: Product control is responsible for analyzing the performance of trading desks and individual traders. This involves decomposing P&L into various components such as market risk, credit risk, and operational risk, and assessing the contribution of each component to overall P&L.

Overall, product control plays a critical role in ensuring the accuracy and completeness of financial information produced by investment banks. The team works closely with trading desks and risk management to provide independent validation of trading activity, risk management, and financial statements, helping to ensure the bank's overall financial health and compliance with regulatory requirements