Zoltán Pozsár

WHEN WE MEET HIGH SCHOOL STUDENTS WHO WANT TO STUDY AT FBE of UP, IT OFTEN TURNS OUT THAT THEY DON'T REALLY KNOW MUCH ABOUT WHAT AN ECONOMIST DOES. IT'S WORTH CLARIFYING FIRST WHAT AN ECONOMIST WORKING IN YOUR FIELD DOES, WHAT YOUR JOB CONSISTS OF, WHAT IS IT THAT YOU DO ON A DAY-TO-DAY BASIS NOW?

I can relate to this, because when I applied to the Pécsiközgáz, during the interview, Professor Rekettye asked me what I think a businessman and an economist does. I could not answer him. Now I understand a little better. Economics, like medicine, is a broad science. My field is financial market analysis. 

The financial market is the "vascular system" of the world economy and therefore a financial market analyst is a cardiovascular "doctor". 

In a nutshell, financial market analysis is about being aware of where the world economy is going, what central banks are going to do with base rates, and what is happening in the financial markets as a result of all kinds of events. 

If you do not live in the financial market, then when you hear the word financial market you might think of what central banks are doing with base rates, but if you are a money trader – or if you are a trader who does analysis, as I am – most of the day is about how much interest rate differentials there are in the various financial markets at the moment and how you can profit from that, and how interest rates and interest rate differentials will develop in the future. If you work here, your job is to have a point of view on all this, which at the end of the day is used by the bank and its customers – businesses, states, institutional investors or speculators – to their own advantage.

You can't learn it in this form in any university, but you get the basics during your university years. 

YOU GOT THESE BASICS AT FBE of UP. WAS IT A GOOD SPRINGBOARD FOR YOUR INTERNATIONAL CAREER? HOW DO YOU REMEMBER YOUR YEARS IN PÉCS?

It was important in every way. The biggest influence on me during my years in Pécs was Péter Mach's Macroeconomics classes. There I was introduced to macroeconomics and the concepts of the global economy. It was the time of the great Asian crisis, which we were very keen to understand: we were listening to the financial news on CNN and we didn't understand anything about it. But we wanted to understand it, so we used to go to the professor after class and talked about how to understand the financial news. I was looking forward to Mr Zeller's class, banking, but unfortunately I didn't get to attend to it because I got a scholarship to Sweden and from there, through my contacts there, to South Korea, where I did an MBA after graduating from Pécs. 

Pécs gave me the basics and the contacts and helped me to get out into the world.

It is important to stress that you cannot learn everything at university. Until you go to a bank and see how such an institution works from the inside, you can’t realise that there is a big difference between the real world and studying at university. Everyone takes something different with them. I took with me an interest in macroeconomics, in finance, in the way the world goes. That is why Pécsiközgáz is an important memory for me.

HOW FAR DID THIS INTEREST TAKE YOU? HOW DID YOUR CAREER DEVELOP AFTER YOUR UNIVERSITY YEARS?

Being interested is very important and so are the connections. You also need luck, because my dream after university was to become a macroeconomic analyst in the United States. I had a nice former teacher in South Korea who recommended me for such a job, and that's how I ended up in America. But after 6 years I switched because I got bored of the field and as the 2008 global economic crisis was raging at the time, I wrote what I saw while looking for a job, and it turned into a small article and then a few years later a bigger article – published by the Fed. 

THIS IS YOUR RESEARCH ON THE SHADOW BANKING SYSTEM.

Yes. That's the one that is usually associated with my name. After the 2008 crisis, this article was used by the G20 to reform the supervision of the banking system. That's how I got from the Fed to the International Monetary Fund (IMF) and then to the U.S. Treasury and from there I was invited to Credit Suisse to try to build a trading strategy based on this knowledge. So far, I've been involved in roughly three areas: macroeconomic analysis, mapping and researching the banking system in the public sector, and now I'm leading financial market analysis at a global bank -- Credit Suisse. These are different areas, but they all build on each other. 

AS A HIGH SCHOOL STUDENT, YOU PROBABLY DON'T FORESEE THIS PATH. WHAT DOES IT TAKE TO HAVE A CHANCE AT A SIMILAR CAREER PATH? WHAT MESSAGE DO YOU HAVE FOR STUDENTS?

At the university, you have to find what you're passionate about, what your profession can be. Find an area that inspires you and that you can learn about for the rest of your life. If I had to say something to high school students, I would say that learning is never over. University will just be a phase, just like high school was. 

In college you will build relationships, you will have professors who will have a great impact on you and they will be the ones who will ignite some kind of flame. Then you go after the flame.   

WHAT KIND OF FLAME WOULD YOU GIVE TO THE HIGH SCHOOL STUDENTS OF PÉCS?

When we look at long time series (on interest rates, stock market indices, inflation) it's all "history" in reverse. The money and capital markets "price the future today," which means it's all about what the market thinks today about how future "history" will play out. Nathan Rotschild knew sooner than anyone that Wellington had beaten Napoleon at Waterloo and Britain's government bonds took off (interest rates plummeted) when the banker, hearing the news, "shopped" in the bond market. This is part of history, but the financial dimensions of history are not taught in high schools.

Ten years ago, the Swiss franc credit crisis in Hungary, the bankruptcy of Lehman Brothers or the euro crisis were the defining events. Today, the pandemic is the defining event in the lives of young people and how the respective great powers – America, China and the EU –are dealing with the problems of the present and the speed with which they are vaccinating the population. This will all have an impact on the future. The sovereign debt markets are financing it all today, the financial history of the pandemic is being written today, and you, today's high school students, will learn about it all 'tomorrow' in your macroeconomics classes. And your children will inherit a world where political and financial decisions made today will determine who will lead the world – China or America – ad whose currency will dominate. This is the future that money and capital market participants are trying to "price" today.

THE WAY YOU TALK ABOUT IT, YOUR JOB DOESN'T SOUND BORING AT ALL. WHAT IS THE BEAUTY OF YOUR PROFESSION?

I never do the same thing because circumstances are always changing. We read the news, we get the news (see Waterloo), we visit clients in Tokyo, Hong Kong or London, prices move and prices are always moving, always driven by something else: a presidential election, a war, a virus, or a ship clogging the Suez Canal causing thousands of ships to be stranded in a maritime "traffic jam" that needs to be financed....

IT IS DIFFICULT TO KEEP LEARNING AND ALWAYS BE OPEN TO LEARNING.

That is why you have to be interested. And, of course, to be able to work hard. If you are going into financial markets, be aware that these are 24-hour markets – as they say, money never sleeps.

As a market participant, you should always ask yourself, in an almost paranoid way, whether you are making the right sense of the world?

Many times your world view is correct, but the market – the majority – thinks otherwise, and then you have to change. If not, you can go bankrupt even if you are basically right. The financial market is a complex place.

What I've learned in my career, but I didn't learn in any university, is not to look for absolute truths, but to look for what we thought was true but isn't....