Maths and the Financial Crisis

April 19th, 2010

Financial mathematics.

If the God of Whizz was of an uncharitable turn of mind he might suggest that the world of finance has recently honoured mathematical accuracy more in the breach than in the observance.

In this vein, the Financial Times’ Gillian Tett suggests that mathematicians must get out of their ivory towers to restore credibility to the idea of ‘financial mathematics’, whose reputation the Credit Crunch and international financial crises have done so much to sully.

As Gillian Tett suggests:

What really damaged the financial system in recent years was not so much “maths” or “economics”; instead the crucial problem was bad maths (and economics) that was used and abused. Now, more than ever, mathematicians need to get out of their ivory towers or back offices and state that loudly, not just for their sake, but for economists. And, of course, those bankers.

The God of Whizz agrees, and humbly suggests a course of primary maths tutoring for the wizards who did all that financial abusing.


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