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Zoltan Pozsar Predicted “Quantitative Easing” Accurately A Year Ago

24 Apr, 2020 KDIS News Center 3,415

Zoltan Pozsar (2001 MBA) is an outstanding and well-known professional in finance. He is currently working at Credit Suisse in New York. He is well-regarded as a professional who understands the financial system and money market very well. Before joining  Credit Suisse, he worked for Economy.com, New York Fed, IMF, and the U.S. Department of Treasury.

Photo: Bloomberg

Q1: What made you decide to come to KDI School? Why did you decide to go to KDI School among other graduate schools?

A long time ago, I was studying in Sweden, and I met Korean students who came from KDI School. They recommended me the KDI School.  I always wanted to travel, so I applied and received a scholarship, and I ended up going to KDI School. It sounds incredible, but I didn’t consider going anywhere except Korea at that time. I decided about going there after my study abroad in Sweden.

Q2: When did you start attending KDI School and when did you graduate KDI School? What major-related activities did you do at KDI School? Were there other activities that were not related to your major such as student clubs?

I went there from 2000 to 2002. So, I was there for two years, and I graduated with an MBA. I majored in finance and macroeconomics. I was a TA for a professor called the late David Behling. He has unfortunately passed away. I was studying a lot, and I was teaching English on the side.

Q3: What was the thing you enjoyed while you were at KDIS? What was difficult for you while you were at KDIS?

I enjoyed everything. I had a strong appreciation for Korean food. I lived in New York, but I liked to go to Korean places and eat my Kimchi. I had a pleasant experience in my days in Korea. I made some good friends. One of my good friends, Bohn Koo, who was my classmate, became the best man at my wedding. I have some strong connections in Korea, and I have very fond memories. I had to study a lot, but other than that everything was fine.

Q4: Why did you decide to work in Credit Suisse as your career?

After I graduated from KDIS, my first job after graduation was at a company called Economy.com which was a macroeconomic research firm. And then, after that, I went to work at the New York Fed and then worked for the IMF. Later, I worked in the U.S. Department of the Treasury, and Credit Suisse. I joined Credit Suisse five years ago. I joined because my experience in the public sector enabled me to be known to people as someone who understands the financial system and money market very well. In Credit Suisse, the chief economist I knew personally hired me to do more of this work as he felt I could do well in work that is more geared toward investors. So, that’s how I went from the public sector to the private sector at Credit Suisse.

I always wanted to work at a bank. I studied finance at KDIS with Professor Sang-Moon Hahm and Professor Behling; they were all interesting to me. Out of school, my first opportunity was as an economist and not at a bank. Then, I went to the Central Bank, and then the IMF and all these institutions closely related to finance. I chose Credit Swiss because I knew the chief economist at Credit Suisse and I had a very strong interest in the workings of the financial system and money markets. He wanted us to work together in his research department as he needed someone very strong in the money market. So, I said, “why don’t we just do this and give it a try and see how it works.” It worked out fine.

Q5: What kind of work do you do as a managing director of Credit Suisse?

I am in research, so I have a research publication called “Global Money Notes”.  Global Money Notes is looking at the global dollar funding market. It provides analysis to investors about central bank policy and what is happening in the interest rate markets globally. I write research notes and investors read it. I spend a lot of time talking to banks’ management and banks’ clients about what is happening in the money market. Clients mostly read my publication would be institutional investors like hedge funds and FX reserve mangers, pension funds, and other banks. It’s a publication that is geared toward institutional investors that are active in the short term money market – so called STIR traders.

Q6: What kind of person do you think you are? What personality or character do you have?

I am very hard working and very persistent. I don’t take no for an answer. Getting to where I am took a lot of hard work. It’s a lot of not taking things for granted and not believing in everything that people say and trying to find your own answers. In the financial market, when you talk to people, you should not take what they say at face value. Instead, always keep digging and finding your own sources and figure out what is true and what is not because there are many rumors and narratives going around in the financial markets. If you are not going to do your homework and you trust what you hear from others and you are not following up, then you are not verifying what you hear and you get into a problem – making bad recommendations as a strategist or making bad trades as an investor or speculator. So, part of discipline is to not get into trouble by doing your “homework”, I have two mottos: “Follow the money trail and follow it relentlessly” and “Trust, but verify.”

Photo: AUBG Career Center

Q7: Do you have any hobbies?

I used to have hobbies. I used to watch movies, and I loved to play tennis. Now, I have a daughter, so my daughter is my hobby.  My daughter is five years old, so there is a lot of things to do, so my hobbies are taking a backseat until my baby goes to college.

Q8: What was helpful to you in succeeding in the finance sector?

Clients at  Credit Suisse read my work and say that what makes my work different from others is that I look at the balance sheets of financial institutions. So, individual banks’ balance sheets and pension funds tell what’s on the asset side and what’s on the liability side. In banking, balance sheets are extremely important. I do what others don’t do, and that is what Dr. Behling did; KDIS should continue this on as a tradition. Professor Behling used to say that if you want to take my corporate valuation in finance classes, then you first have to take an accounting class from me. The book that we learned accounting was called  Principle of Accounting and Dr. Behling was very good at teaching links between the income statement and balance sheet. It was important for him for students to understand how changes in income statements influence the balance sheets. That was basically the whole perspective of accounting in Dr. Behling’s class. I think it was extremely formative in my education to have a balance sheet perspective.

Q9: What was your relationship with the classmate or peers? Did you live in the dormitory? If so, please let me know any episode with your roommate.

I lived in a dormitory.  I went to other places besides eating food in the cafeteria. I was circling all around Korea. I had friends from abroad and friends from Korea. One of my good friends, Bohn Koo, he became my best man at my wedding. Unfortunately, I do not keep in touch as much anymore because obviously everybody gets busy with their lives. I taught English, so I would take classes during the day and teach English in the afternoon. They were full and very busy years. KDI School had some relationship with the elementary schools in the area, so I was teaching there for free. Then, I was teaching at a few families little children and high schoolers, and I was also teaching at the factory and some maintenance works. I also taught one corporate CEO of an investment company who hired me to teach business English. I tried many different things to supplement the scholarship money.

Q10: What did you do to prepare to go to The Fed and Credit Suisse? When did you decide to work in finance (investment banking) and when did you start to prepare for the job? Please let me know any tips on preparing for a job in The Fed or Credit Suisse.

1997 was the Korean Financial Crisis. I am from Hungry, and when I started college in 1997, I took my first macro class in 1997 during the middle of the Asian Financial Crisis.. I was watching CNN, I didn’t understand at that time what happened in Korea financially but these were very interesting and exciting times. It was my initial interest in finance, and it was mystical something happened and I was drawn to it. It was part of the reason why I was interested in going to Korea to study. I went there three years after the financial crisis. After I graduated from Korea, I really tried hard to get a job at a bank and I could not. Because of the timing, that it is right after the dotcom bubble in 2000, the banks were not hiring. So, I ended up at an economic research firm. From there, I started to work at Credit Suisse in 2015. Although it was a long journey to get into a bank, it was worth it because if you start to work in a bank early on, your thinking about markets might have been shaped differently. Education shapes the way how you look at the markets. The education I had at KDI School is a unique perspective, that’s why I have clients who find it so valuable. It was a long path that led me to end up working in a bank, but it was very worthwhile in the end because the perspective is so different.

My tip for applying for jobs in finance is perseverance, try hard and never-ever give up. Always try to not do what everybody else does.

Q11: What do you think is the solution for the decrease in stock prices due to the COVID 19 pandemic? 

We definitely need a vaccine.