PhD Student testimonial

Lee Su Fen

Senior Economist, Monetary Authority of Singapore, Singapore, Singaporean

Can you tell us more about your academic and professional background?

I have an undergraduate degree in Electrical Engineering and a master’s in Management Science and Engineering, both from Stanford University. Being on a Monetary Authority of Singapore scholarship, I returned to Singapore after four years of overseas study to serve a six year bond with the authority. I started in the Complex Institutions Supervision department, as part of a team supervising a group of local and foreign banks; after three and a half years, I switched to another supervisory role in the Specialist Risk Supervision department, where I focused on financial risk, in particular, treasury operations and risk management of banks. In that role, I conducted on-site inspections where I interviewed staff from the front, middle and back offices and audited their processes to understand how banks were taking and managing market, credit, liquidity, operational and counterparty risk. This was up till last June. I am now a Senior Economist in the Macroeconomic Surveillance department, where we review financial stability issues and macroprudential policies; so I am now looking at risk from a more macro perspective.

How did you make the decision to go for this PhD?

I had been thinking about doing a PhD for a while but I had not made up my mind for a number of reasons. While the idea of further learning and picking up research skills was appealing to me, I was well aware that a full-time PhD involved a huge time commitment of 4-5 years. I also had the impression that you would pursue a PhD only if you wanted an academic and teaching career after that.

Human resources drew my attention to the programme at a time when they also introduced a doctoral scholarship for staff. The two features that stood out to me were the existence of an executive track that allowed me to continue to work while doing my PhD, and the track record of EDHEC-Risk Institute in doing research that has practical relevance to the industry. I realised that there was a role for research within MAS; there were several supervision and policy issues that could benefit from research, and I saw myself possibly contributing to that role. Embarking on a PhD programme, in particular one with industry relevance, now made a lot of sense to me.

What has been your experience in the programme to date?

I am a third year student and, in terms of class content – both in the core courses and in the electives – I have learnt a lot. Courses are delivered by faculty who are in the know and the high ratio of practitioners in the classroom ensures that knowledge is put in the context of practice – when a model is presented, participants bring up the constraints they face and there is a class discussion on how to implement models and ideas in a realistic setting. Faculty members, being experts on the topics they teach, either have first-hand answers to our questions or can point us to relevant literature.

Now that I am in the dissertation stage, I particularly enjoy the style of the electives: each of them is a compact, three-day review of a field by one of its specialists. Faculty articulate the key questions, introduce the field’s fundamental contributions and provide direction for further work on the frontier. The format is ideal if you need to brush up on a topic or need a guide for an in-depth exploration.

In terms of delivery, I find that the block format of the courses allows students to be attentive and productive. Personally, I find this more effective than other types of delivery formats you will find for executive courses – after a day’s worth of work, I doubt I would have energy left to pay attention in a night class!

With respect to structure, I find that completing the programme in just three years, while possible, is challenging given the programme’s academic standards. Fortunately, I am privileged to be working for an organisation that is very supportive. Identifying a research topic that offers synergies with one’s day-to-day work makes this challenge more manageable.

How has the programme impacted your day-today work?

My problem-solving process has become a lot more refined and systematic since I joined the programme. I now approach a problem with a much more critical eye, questioning model and methodology assumptions and parameter values, as well as identifying the questions that are addressed and those that are ignored. Overall, I have much better attention to detail and am much more challenging of information I receive.

I also find that I have gotten better at distilling complex concepts to the core issues. This is definitely the result of working with Professor Frank Fabozzi as my dissertation advisor, whom I have learnt a lot from on the art of explaining complicated ideas in a simpleto- understand manner. In addition, the experiences of having to discuss my work with my peers and the faculty in the context of the programme’s research presentations, and presenting it to a diverse audience at the EDHEC-Risk Days conference, have also helped in improving these skills.

I understand you represent the Monetary Authority of Singapore on a working group addressing issues of counterparty and systemic risk. Could you tell us more about this?

Yes, I was part of the working group on margining requirements for non-centrally cleared derivatives established by the Basel Committee on Banking Supervision (BCBS) and the International Organisation of Securities Commissions (IOSCO). The group was set up in the wake of the global financial crisis to implement the directive by the Group of twenty (G20) to tackle excessive and opaque risk taking through the over-the-counter (OTC) derivatives markets. As you probably know, the G20’s objective was to reduce systemic risk posed by OTC derivative markets by introducing a reporting obligation and moving the trading of standardised contracts to central clearing, while subjecting non-centrally cleared contracts to higher capital requirements. The G20 also agreed to add margin requirements on non-centrally cleared derivatives to the reform programme – the working group was set up to look into setting minimum international standards on this specific limb of uncleared margin requirements.

This strikes me as something closely related to your dissertation work. Could you tell us more about your doctoral research?

My first paper looks at the impact of central-clearing on systemic risk, in particular, how the introduction of a central counterparty into a financial network impacts network topology. Using network theory, I look at the relationship between network structure and node centrality measures and the policy implications for central clearing. My second paper is also related to systemic risk as it looks at how pre-emptive liquidity hoarding by financial institutions contributes to contagion.

In my view, this programme is suitable for mid-level professionals who have sufficient working experience to have a good appreciation of their industry, of the problems it is facing and of the practical constraints and considerations that need to be taken into account when attending to these problems. To me, the programme is particularly beneficial to practitioners whose roles include a significant technical dimension. Investment and risk professionals and other practitioners who can put modelling skills to work have the most to gain, as the programme will greatly enhance their knowledge and understanding of financial modelling and impart tools they can readily apply in the workplace.

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