Blame for the global financial crisis has been cast upon government leaders, bankers, home owners, and quantitative analysts. In fact, mathematical models and formulas such as Black Scholes, Gaussian Copula, and VAR have received particular attention as culprits in this financial mess. And while these financial models had flaws, a more egregious error was the blind faith and lack of critical thinking in the adoption of these models.
Executives are realizing that when it comes to modeling complexity—there are no magic beans, there are no magic formulas. But have we learned these lessons too late? read more