Q&A: Myron Scholes on LTCM, crisis lessons and the value of intermediation

Quants' golden age

The birth of quantitative finance is often dated back to the work of Louis Bachelier in 1900, but for the subsequent seven decades it won few converts – notable exceptions such as Benoît Mandelbrot aside – until the arrival of Fischer Black, Myron Scholes and Robert Merton.

In a series of seminal papers in the early 1970s, these three figures revolutionised trading through the now-famous Black-Scholes option pricing formula, which largely replaced the intuitive approaches used up to that point