This paper investigates the risk attitudes of investment bankers. To do this, we subject our sample group to an experiment and a survey. The experiment measures risk preferences through multiple risky lottery choices, and the survey questionnaire explores the willingness to take instrumental and stimulating risks. The investment bankers in our sample are more willing to take instrumental risks than other groups. Within the investment banker group, traders and analysts, who actually put financial theory into practice, show markedly higher levels of risk preference converging near risk-neutrality. This is a double-edged sword for their employers and for the society as a whole: The fact that professionals who can take market risk most efficiently are adequately stationed in revenue generating positions is good. But in a world without adequate regulations and controls, they can endanger entire financial and economic systems.
Keywords: investment banker, trader, risk attitude, risk preference, risk aversion, instrumental risk taking, stimulating risk taking
