Financial Engineering and Engineering of Financial Regulation

As observed at least in last two decades, financial engineering has not only changed the way of doing business in finance world, but also has changed daily life of average citizens in the leading economies. Structured products named as weapons of mass destruction in some post-crisis comments. But it is fair to say that few people could understand the nature and risks of these instruments before the crisis. By using literature review and case study analysis, the author analyses how financial regulation and supervision have failed to understand/manage the financial engineering products during/before the global financial crisis. In this context, we discuss the measures to enhance good regulatory governance in engineered products. We conclude however engineered products have important benefits to the global economy, regulatory/supervisory structure should be improved for better firm/system wide risk management. Secondly, there are four components to improve prudential regulatory/supervisory framework of structured products. Those are, timely/effectively action to the balance sheet problems, to increase the effectiveness of the risk management, to improve independence and quality of prudential regulation/supervision and to increase accountability of supervisors.Financial engineering, structured finance, financial crisis, risk management, regulation

A piecewise exponential model for three-dimensional analysis of sandwich panels with arbitrarily graded core

Open Access funded by Engineering and Physical Sciences Research Council Acknowledgements Financial support of this research by the EPSRC (Engineering and Physical Sciences Research Council) (EP/P503299/1, EP/P503930/1), United Kingdom, is gratefully acknowledged.Peer reviewedPublisher PD

Regulating Complexity in Financial Markets

As the financial crisis has tragically illustrated, the complexities of modern financial markets and investment securities can trigger systemic market failures. Addressing these complexities, this Article maintains, is perhaps the greatest financial-market challenge of the future. The Article first examines and explains the nature of these complexities. It then analyzes the regulatory and other steps that should be considered to reduce the potential for failure. Because complex financial markets resemble complex engineering systems, and failures in those markets have characteristics of failures in those systems, the Article‟s analysis draws on chaos theory and other approaches used to analyze complex engineering systems

Towards an integrated perspective on fleet asset management: engineering and governance considerations

The traditional engineering perspective on asset management concentrates on the operational performance the assets. This perspective aims at managing assets through their life-cycle, from technical specification, to acquisition, operation including maintenance, and disposal. However, the engineering perspective often takes for granted organizational-level factors. For example, a focus on performance at the asset level may lead to ignore performance measures at the business unit level. The governance perspective on asset management usually concentrates on organizational factors, and measures performance in financial terms. In doing so, the governance perspective tends to ignore the engineering considerations required for optimal asset performance. These two perspectives often take each other for granted. However experience demonstrates that an exclusive focus on one or the other may lead to sub-optimal performance. For example, the two perspectives have different time frames: engineering considers the long term asset life-cycle whereas the organizational time frame is based on a yearly financial calendar. Asset fleets provide a relevant and important context to investigate the interaction between engineering and governance views on asset management as fleets have distributed system characteristics. In this project we investigate how engineering and governance perspectives can be reconciled and integrated to enable optimal asset and organizational performance in the context of asset fleets