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Robert C. Merton – Observations on the Science of Finance in the Practice of Finance: Past, Present, and Future

RoyalHolloway_computerscience

Event Date: 23 February 2010

This year the annual Kolmogorov Lecture will be given by Nobel Prize winner Professor Robert Merton, from Harvard Business School. In the lecture – held at Royal Holloway, University of London on February 23 – Professor Merton will discuss the economic crisis and the important role of financial innovation and regulation in the future beyond the economic crisis.

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speaker_RobertMertonRobert C. Merton (John and Natty McArthur University Professor, Harvard Business School)
Observations on the Science of Finance in the Practice of Finance: Past, Present, and Future

For several decades, financial innovation has been a central force driving the global financial system toward greater efficiency with considerable economic benefit having accrued from those changes. The scientific breakthroughs in finance in this period both shaped, and were shaped by, the extraordinary innovations in finance practice that expanded opportunities for risk sharing, lowering transactions costs, and reducing information and agency costs. Today no major financial institution in the world, including central banks, can function without the computer‐based mathematical models of modern financial science and the myriad of derivative contracts and markets used to extract price‐ and risk‐ discovery information as well as execute risk‐transfer transactions. But also today, we are faced with the effects of a global financial crisis of a magnitude and scope not seen in nearly eighty years, which some attribute to the changes in the financial system brought about by financial innovation, derivatives, and mathematical models. The lecture will apply the tools of financial science to analyze and offer observations on the structural elements of financial crisis, on needed financial regulatory changes, and on the important role of financial innovation and science in the future beyond the crisis.

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Introduction by Prof Alexander Gammerman .

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talk by Robert C. Merton:

Play

accompanying images:

vote of thanks by Prof Shafer .

questions .

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medal presentation .

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The Kolmogorov Lecture is given annually by distinguished researchers in the field of theoretical computer science, or related mathematical sciences, who made outstanding contributions to developing research directions initiated by Andrei N. Kolmogorov.

This lecture has been organised by Royal Holloway’s Computer Learning Research Centre.