What Did We Learn From the Financial Crises?

Whether we learned from the financial crisis is yet to be seen. There is though a shift in productivity going on in the financial world.

According to a news item on the BBC, there seems to be a real Math problem. This is in the UK, but I think it's broader than that.

Perhaps it is not only about maths, but more about science in general. Both have been less popular for many years. How long have we not stressed especially in business trainings the importance of eloquence and sales techniques. Maybe we are now reaping the fruit of the financial crises. It is possible that this is motivating common-sense in finance and not only in finance. The days of eloquence have been counted.

Understanding risk...

"So much of modern banking is based on maths. In the 1980s it was about doing a deal, now it's about understanding risk. The whole financial services industry is underpinned by very high-level maths." (1)

The BBC article outlines the problems children have at school in maths assignments. They don't like it and they are not good at it. And ... in the UK it's not a shame to be open about this.
The only motivation is financial. More and more student learn that without maths they will miss a significant rewarding in their economic lives. "So if imaginative teaching doesn't inspire the British to get their sums right, maybe the lure of an extra 10 grand a year will."

In my opinion it is broader than just maths or no maths. The (financial) market is no longer focusing on sales and marketing experience in profiles. The days of the eloquent sales-pitches are over, everybody can sell when the market is going up: that is what the sub-prime-years learned us. But now the focus is on risks and science. It is all part of a bearish sentiment where old values are being preferred again. Risk is a top priority at the moment.

But not for long I'm afraid. Once the markets turn more positive again, we easily forget about risks and ... maths. Then you can make your additional 10 grand anyhow.

H.J.B.

(1) - http://news.bbc.co.uk/2/hi/uk_news/magazine/7435023.stm

Hans Bool

Reuters - The U.S. unemployment rate soared to 8.5 percent last month, a 25-year high, as employers slashed jobs and cut workers' hours to the lowest level on record, the government said on Friday.

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