Explain the reasons why is quantitative finance in a mess

Question

Explain the reasons why is quantitative finance in a mess?

Answer 1

The main reason why quantitative finance is in a mess is due to obscurity and complexity. Quants are making their models increasingly complex, in the belief which they are making improvements. It is not the case. More frequently than not each ‘improvement’ is a step backwards. If those were a proper hard science then there would be a cause for trying to perfect models. But finance is not a hard science, one wherein you can conduct experiments for that the results are repeatable.

Finance, this is therefore much better to focus your attention upon making the models robust and transparent quite than ever more intricate. The models must not be too elementary in order to make it not possible to invent new structured products, but nor must they be so abstract as to be simply misunderstood by all except their inventor, with the obvious and financially dangerous consequences. On the Certificate of in Quantitative Finance and in such our goal is to make quant finance practical, understandable and, safe, above all.