Financial engineering

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Financial engineering

Combining or carving up existing instruments to create new financial products.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Financial Engineering

The process of creating a new investment vehicle. For example, one may create a new derivative by taking existing structures and altering them to mitigate risk and/or increase the return. One may also theoretically invent a completely new financial product from nothing. Financial engineering is often mathematically intensive, as a number of risks and other factors must be considered before the new product is marketable.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
In the idealized setting described in corporate finance theory, the financial engineer would find all efforts futile.
When that government is voted out, the "financial engineer" takes the new government to court, claiming that the old government improperly abrogated the "contract" it had agreed upon with the financial engineer's consortium.
"The rest can be designed to attempt to replicate increases in the [consumer price index], but it takes a financial engineer to be on top of it on a regular basis."
BLOCK 30 Labs US is headquartered in San Diego, CA and includes a network of global blockchain technologists, computer scientists, economists, financial engineers, researchers and global media alumni from Yale, Harvard, Georgetown, Wharton, Duke, Stanford, UCSB and UCLA - working to improve the quality of coverage around blockchain and the digital trading markets.
Some of the more known structured finance tools include credit default swaps, or CDS, popularized by financial engineers at JP Morgan.
In fact, the current battle over the renminbi's exchange rate reflects a tension between the interests of the "financial engineers" (such as the managers of dollar-based hedge funds) and the "real engineers" (Chinese policymakers).
Other than that, the film doesn't tell say much that wasn't covered to death in the media except that Obama put the worst possible people in charge of the recovery and to ask a fascinating question, "Why should financial engineers make 400 times more money than engineers who build bridges, damns, and power grids?"
Financial engineers and finance professionals who are considering reading American-Style Derivatives should be advised that Detemple has written a relatively short but rigorous book that is targeted toward readers who want to know how to price complex American-style derivative securities at an advanced level.
"As a nation Britain needs to find a way of preventing the 'financial engineers' in the City from systematically and legally 'looting' the nations savings to feather their nests.
According to our surveys, they are auditors, actuaries, financial engineers, strategic planners, lawyers, investor relation specialists, line operation managers, hazard risk managers--even HR specialists."
A good deal of merger and acquisition activity has received a bad press, with most of the "financial engineers" involved lumped together as insensitive corporate raiders.
Financial engineers have created new opportunities to further magnify the already significant leverage derivatives represent.

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