Principles of Quantitative Development

A.2 HISTORICAL PERSPECTIVE

This book has its origins in an article that appeared in my regular column in Wilmott Magazine. It is the enthusiastic response to this article that inspired me to suggest this topic for a full-length book, where I could develop these ideas much further. Here is the slightly edited version of the original article, reproduced with permission (Wilmott Magazine, November 2009, pp. 35–37). In addition to providing a historical perspective on the origin of the book, this article also gives you an interesting and readable summary of the ideas presented.

Big Picture A.1: Software Nightmares

To err is human, but to really foul things up you need a computer. So states the remarkably insightful Murphy's law. Nowhere else does this ring truer than in our financial workplace. After all, it is the financial sector that drove the rapid progress in the computing industry – which is why the first computing giant had the word ‘business’ in its name.

The financial industry keeps up with the developments in the computer industry for one simple reason. Stronger computers and smarter programs mean more money – a concept we readily grasp. As we use the latest and greatest in computer technology and pour money into it, we fuel further developments in the computing field. In other words, not only did we start the fire, we actively fan it as well. However, it is not a bad fire; the positive feedback loop that we helped set up has served both industries well.

This interdependency, ...