When it comes to picking short lists of the most sophisticated corporate risk managers, one of the most frequently mentioned names is Elizabeth Glaeser. Glaeser, a 19-year Mobil Corp. veteran, spent the last six years developing the company's interest rate risk management infrastructure and debt management strategies.

In April, Glaeser left Mobil to become director of the Capital Market's Group at Deloitte & Touche LLP. Her new job is to help corporations follow in her footsteps by developing and upgrading their own policies and systems.

Glaeser credits Mobil's high level of sophistication to Lou Noto, the company's former CFO who is now Chairman. "He was a physics major at Notre Dame and was comfortable with swaps," she says.

"He knew their value and we could engage him in an intelligent conversation about them." At other firms, she admits, risk managers have a tougher time. "It's harder than ever to have senior management allocate resources to building a risk management process. Corporations are in an increasingly strict cost-cutting environment right now. If they didn't make the investment seven or eight years ago, it's very difficult to get budget money now."

She believes more companies will have to rely on expertise from consulting firms -particularly when it comes to technology. "It's hard for firms to make the right decisions because their own information systems people aren't financially literate," she says. "They work on internal payroll systems, bookkeeping, not mark-to-market valuations."

Triple-A rated credit subsidiaries have been around so long, nobody realizes they had to be invented. A good part of those honors should go to Chip Goodrich, a legal innovator who helped launch Merrill Lynch Derivatives Products in 1991.

In May, Goodrich, former co-head of MLDP, announced he was leaving Merrill to become a managing director in the legal division at Deutsche Morgan Grenfell. (The other co-head, Peter Bloomfield, left about the same time to assume a teaching career.) Goodrich will oversee Deutschebank's documentation process, as well as offer legal assistance for the bank's over-the-counter derivatives business. His other important role: making sure there's legal support for the products his firm sells.

The collateralization issues Goodrich specialized in at Merrill will be less critical at his new employer, which boasts a triple-A rating. The new challenge, he says, will be gearing up for what he predicts will be a huge expansion in the bank's fixed-income business under Edson Mitchell, Merrill's former co-head of fixed-income who now serves as DMG's head of global markets.

Within a week of starting, Goodrich took a tour of Deutschebank's European and Far Eastern offices. "I wanted to make sure there were support teams in place to match the significant increase in business in the OTC markets," he says.

Taking over the reins as executive vice president at MLDP is David Milich who has dual responsibilities for marketing and new product development.

Most of MLDP's biggest clients are European corporations, sovereigns, and supernationals. But Milich sees interest from commodity producers, such as energy companies, and investors who want to replicate equity indexes through the derivatives vehicle.

Milich also believes triple-A derivatives subsidiaries will soon move from simple credit intermediation into new products involving financial guarantees. "We could take risks other than credit and offer insurance and reinsurance type products," he says.

A former MIT mathematician and Stanford engineering graduate, he joined JP Morgan's portfolio optimization group in 1988. After a stint trading dollar caps and floors at Lehman, he moved to Merrill Lynch Derivatives Products in 1992. After that, he moved to the Merrill's proprietary trading desk, and is still incharge of running a special statistical interest rate arbitrage effort run off of Merrill's non-dollar swap desk.

Emmett Harty, who masterminded one of the greatest equity derivatives innovation in history-the birthing of PRIMES and SCORES-has come in from the cold. The cold in this case is that felt by a small institutional brokerage boutique with insufficient capital and non-existent presence in equity products distribution.

All in all Harty, 49, did pretty well to survive for five years pretty much on the strength of his ideas.

But last month his Stamford, Connecticutbased Parallax Group gave up its independence by merging with well-heeled institutional broker Cantor Fitzgerald, which has been busy diversifying from its core government securities trade. A year and a half ago Cantor Fitzgerald plunged into convertible securities and hybrid securities that Parallax also dealt in, including structured equity derivatives such as DECS, PRIDES and LYONS. It is this department that will absorb Parallax. "Together we can build market share in this fast-growing area," says Peter DaPuzzo, senior managing director at Cantor Fitzgerald. "Emmett Harty is one of the pioneers of this business and his group is among the most knowledgeable on Wall Street in structured equity derivatives."

One of Harty's skills is in arbitrage between derivatives and the underlying security. Last year, for example, he put a number of clients into positions in Microsoft more cheaply than the common with a joint purchase of LEAPS and ELKS, dividend notes without principal protection.

He also thirsts for the kind of innovation that he experienced at Alex Brown, where he headed an operation that sold $15 billion of PRIMES and SCORES for the Americus Trust. Following that he was a managing director at Smith Barney.

While Harty's boutique had a following among more than 100 institutions, lack of scale limited the impact of its creativity and analysis, he concedes. "Most of our business was in swaps between the equity derivative and the underlying," says Harty. "The merger will make us much better at putting large blocks together. It is very synergistic and will help us build a strong platform in these derivatives."