Risk USA 2005: Panel debates gulf between research and practice

Alongside several practitioners, John Hull, professor of derivatives and risk management at the University of Toronto, discussed the divide between the development of quantitative models and their actual use by traders, at the Risk USA 2005 conference in Boston.

There is a gap on the practitioners' side, with traders not keeping pace with the models developed by academics, said Stephen Blyth, head of European arbitrage trading at Deutsche Bank. The panel said several factors have lead to this gulf. “Some models are just more difficult to use in a trading room,” said Eric Reiner, managing director of group quantitative risk methodology at UBS. Accounting regulations can also discourage the use of some models, he added.

Blyth identified some other trends

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