Financial Engineering and Engineering of Financial Regulation

Control and Financial Engineering

The paper provides a review of the basics of financial engineering, with a few examples. We emphasize connections with control theory in a broad sense rather than with stochastic control theory in particular, and the reader is not assumed to be versed in stochastic processes. After a discussion of the main methods of financial risk management, a state-space framework for modeling financial mark...

Handbook of Financial Engineering

Simulation in Financial Engineering

This paper presents an overview of the use of simulation algorithms in the field of financial engineering, assuming on the part of the reader no familiarity with finance and a modest familiarity with simulation methodology, but not its specialist research literature. The focus is on the challenges specific to financial simulations and the approaches that researchers have developed to handle the...

Financial Engineering and Economic Development∗

In countries with well functioning credit markets, increases in financial activity often take the form of financial engineering. We use a structural framework to characterize and quantify the connection between financial engineering activities and economic development. In our model, producers split the stochastic cash flows they generate to create securities that appeal to investors with hetero...

Other Applications of Financial Engineering

The long-term growth of institutional timberland investments depends on the ability of timberland investment management organizations (TIMO) to deal effectively with securitization, leveraging, arbitraging, supply contracting, portfolio insurance, tax efficiency enhancement, and other issues. Financial engineering holds great promise for many of these issues. This study applies financial engine...