TSE Business Talk: Clementine Galles – Société Générale Sectoral Risk Analysis in a Bank

As the second semester of this academic year is starting, it is time for most of the students from TSE to start looking for internships or jobs, to start the professional life at the beginning of April. For this, the School has prepared a series of Business Talks where alumni from the University comes and explain their different experiences as professionals. Inaugurating this new term, the School received Clementine Galles from Société Générale, one of France and Europe biggest bank.

Ms. Galles works as Head of the MacroSectoral and Microfinancial Analysis. She briefly spoke about the different branches in the risk department of Société Générale and the joint work her department do with other departments, including interaction with non-economists and experts in different sectors to be able to analyses the different risks and financial vulnerability in each market. Her presentation was divided in two parts. The first part consists on explaining how to follow all the sectors. Some of the most important sectors they follow are oil and gas markets, electrical, housing, telecom, and pharmaceutical sectors. All the sectors are divided and rated geographically, for example oil in a global way, telecoms in a European and America way, and real estate in a national one. The sectors are studied in a way to understand the risks present in each one of them, that could harm the vulnerability of the bank and its clients. Société Générale has developed a operating model, using engineers and expert’s opinions, from other departments of the bank, obtained through a questionnaire about their work on each sector As an example, they asked about regulation in a sector and its impact on the market.


During the second part, she mentioned the hot topics in a macroeconomic level. The first one was global trade. She explained, how before the global crisis, there was a long period of important level of exports, more important than GDP, also because of the commercial integration in Europe, horizontal integration too, and China joining the World Trade Organization. After the crisis, the exportation rate growth has decreased, mainly due to re-onshoring of the value chain, vertical integration, protectionism, and services, therefore leading to less global trade. Complementing this regulation has been increasing on the borders, is expected that the effect of Brexit and president Trump election to increase this tendency in global trade. The question now is which sectors would be firstly affected from this?


Then Ms. Galles talked about interest rates, where the global macro picture of debt since it’s being increase for the companies, because of the low interest rates. Before the crisis, there was a huge increase in the level of debt firm in the private sector. For the public sector, the dynamic is the reverse, the debt increased after the crisis. Due to the fact that low interest rates and, slow growth mergers and acquisitions are financed by debt.

At the end, Ms. Galles presented a couple of real cases currently analyzed, where the main question was: What are the implications of the European energetic transition? She explained how, due to the new trend of renewable energy, the financial ratios in Europe are deteriorating, since the price of electricity is dropping. This can have an important incidence on the vulnerability of clients and the bank. At the end, there was a short session of questions from the audience, mainly concerned from the effect of America’s president Trump’s forthcoming politics and how to apply for an internship in Société Générale.

by Jose Alfonso Muñoz


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