Risk and the Art of Formula 1 Racing

How does Ana Cecilia Reyes Esparza, CFA, reconcile her passion for Formula 1 racing — an inherently dangerous sport — with her career in risk management? Well, it's simple, she says. "I have a calculated risk mindset. . . . Yes, you take risks, but not without thoughtful planning and careful preparation."

She compares the strategic planning process and the big-picture, long-term viewpoint of investing with the ever-changing conditions of a Formula 1 race, which requires preparation, endurance, and an ability to adapt quickly when the environment changes.

It was a desire to gain the skillset needed to assess the big picture that convinced Esparza that the CFA designation was the right choice for her. "I was looking for something that would give me more specialized knowledge with a global vision," she says. The CFA Program curriculum immediately appealed to her because of its breadth of knowledge, specialized investment segments, and comprehensive approach to finance.

"I heard about the CFA charter when I was working in a bank. I went to the internet and began reading more seriously about the CFA charter. I said, okay, this is what I want to do." Upon reflection, Esparza says it was the most difficult thing she has ever done in her life. "But I decided I'm not going to quit; I'm going to do this," she recalls.

Her persistence paid off in 2006 when she became the first female Mexican charterholder.

Esparza soon proved to be a leader in the CFA Society of Mexico. In fact, she was part of an influential group of professionals who spearheaded the effort to organize the society. She has volunteered on the Government Relations Committee (2006–2008) and served as vice president (2008–2010), and since 2010, she has held the position of president of the society.

"In Mexico, we're working very hard to raise awareness about the CFA Program." In 2006, Esparza organized a meeting with CFA Institute staff and local finance leaders in Mexico City to educate regulators in the region about the CFA Program.

"We met with the finance underminister in Mexico to discuss the CFA charter, and he told us to talk with the local financial authorities who supervise bankers because it's very important that they learn about it. Banks now ask about CFA," Esparza says proudly.

She explains that banks in the region are beginning to perceive CFA charterholders as valuable assets for their firms.

"In Mexico, we have both Mexican banks and international banks, and the international banks were more aware of the CFA Program. And thus, talking to them about the benefits of the program was easier at first," she says.

But Esparza has witnessed the awareness of the CFA Program rapidly evolve over the last several years.

"Mexican banks are beginning to recognize these benefits as the brand is becoming more known. I think banks are perceiving the brand as a global standard of high ethical content and profound knowledge," she explains.

Today, she works for Grupo Bal in Mexico City as the head of credit and counterparty risk management and remains active as a society member. "Through a constant campaign of awareness, we are elevating the brand."

Her position as chairperson of the OpRisk Committee on the Mexican Banks Association in 2010 helped her to stay connected to the key players in her region. "The Committee is a forum to discuss operational risk practices in the banking industry, and I learned such insights from my peers and regulators. . . . We had to analyze the regulator proposal for Basel II in Mexico and participate in a constructive dialogue with the regulator to finally achieve a sound capital adequacy regulation for Mexican banks," she says.

Esparza explains that as Mexico continues to grow its market and emerge as a player in the world's capital markets, she recognizes a definite need to educate the local investment players, including regulators and investors, about best practices in financial analysis.

"You have to have a global vision because even though most of our investments are in Mexico, they're affected by whatever happens around the world."

Esparza realizes the local need for ethics and best practices, but she is also acutely aware that Mexico must compete in a global arena. This was a driving force behind her commitment to earn her charter — the applicability of global best practices in a local environment.

Esparza considers the CFA charter to be her greatest asset in maintaining this global perspective. "The CFA charter has given me a huge understanding of financial analysis," she says, "and I value not only the knowledge obtained, which is invaluable, but also the experience."

The journey has been a growth process for Esparza, both personally and professionally. "The CFA Program tests not only learning abilities, but the character itself," she says emphatically. Just like the Formula 1 race car driver tackling a new course, Esparza enjoys setting goals and exceeding expectations at the finish line.

"If I could go back in time, even knowing the effort that it took to pass the exams, I would do it again without hesitation."

Interview conducted in August 2009.

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