Are We Engineer or Quant?

[Andy Nguyen]

Charles Tapiero, Chair of the Finance and Risk Engineering Dept at NYU-Polytech asked that question in an exclusive article on Quantnet.

He said

The recent financial crisis combined with a confused press regarding who is at fault has, in recent meetings of Financial Engineering/Mathematics programs across the US, raised the urgency to better define how we are educating our students for the Masters degree in Financial Engineering. The need to brand financial engineering is being discussed by the IAFE (International Association of Financial Engineers). This has presented an opportunity to effectively collaborate when challenged externally by a public duped in believing that financial engineers were a major contributor that led to the crisis. In these discussions, a challenge on defining the nature of the financial engineering profession has been revealed. In particular, are financial engineers Quants or is Quant only a means (albeit important) but increasingly of lesser importance.

This is a dilemma, “are we engineers or Quants?” This question has plagued “Science” and “Technology” as well. Science makes discoveries by seeking an internally consistent theoretical framework. Technology is challenged by the need to reconcile what we know and the manifestations of a complex reality that inserts doubts into everything we encounter. Quants however, seek to maximize an implied rationality, while financial engineers recognize that these rationalities are bounded and they seek an understanding that satisfices (a word attributed to Herbert Simon) our needs.

Branding Financial Engineering: Are We Engineer or Quant? | Quant Network

What do you think? Share your comments with us.

 

[DominiConnor]

We aren't engineers...

For a start engineers are qualified to do their jobs...
If you pitched up at Schlumberger or Boeing with a one year conversion course slapped on the top of a degree in a wholly different subject they probably wouldn't hire you at all, and if they did, it would be nowhere near anything critical.

Engineers have professional standards.
When my colleague Paul Wilmott got angry with the utter absence of standards, he and Derman put together a manifesto. It's one page. Before that there was nothing. Chiropodists have higher standards than we do.

Like many here I trained as a scientist, and the discipline there is that if you say "X belongs to set Y" there must exist a test that you can apply to any member to seee whether it belongs to Y or NOT Y. You can't do that with quants.

You can be disbarred from most professions for misconduct, even Sarah Palin's entourage has criteria by which you could be cast out from it.
We aren't even up to the standard of a group where people have to pay for TV ads to state for the record that they aren't witches.

As it happens, I am a witch, defined as having done things that groups of Christians cannot understand, and having been a member of a group that the arch diocese of London saw fit to undertake an exorcism of a building we occupied in the 1980s.

 

[amanda.jayne]

Amen, Dominic!

"Like medical or legal professionals, professional engineers are licensed, and are accountable for their work. Their duty is to serve and protect the public welfare where engineering is concerned. Professional engineers subscribe to a strict code of ethics and practice standards. The practice of the profession is regulated by Professional Engineers Ontario." - PEO​

"PEO has also taken action against the use of the term "engineer" by several software companies...
In 2001, CCPE reached agreement with Microsoft such that Microsoft has advised MCSE and MCPSE Lan holders in Canada that they must use only the acronyms in this country so that they will not violate licensing laws. We have asked that Microsoft replace their current terms with others that do not use the word "engineer", so as not to violate the Professional Engineers Act and trademark legislation. This matter is still awaiting resolution. "

Oddly, I'm unaware of any such action against "Financial Engineers" in Canada. I suspect that as the field develops and gains importance, a governing body (and ability to be banished/fined) will emerge.
​

We aren't engineers...

For a start engineers are qualified to do their jobs...
If you pitched up at Schlumberger or Boeing with a one year conversion course slapped on the top of a degree in a wholly different subject they probably wouldn't hire you at all, and if they did, it would be nowhere near anything critical.

Engineers have professional standards.
When my colleague Paul Wilmott got angry with the utter absence of standards, he and Derman put together a manifesto. It's one page. Before that there was nothing. Chiropodists have higher standards than we do.

Like many here I trained as a scientist, and the discipline there is that if you say "X belongs to set Y" there must exist a test that you can apply to any member to seee whether it belongs to Y or NOT Y. You can't do that with quants.

You can be disbarred from most professions for misconduct, even Sarah Palin's entourage has criteria by which you could be cast out from it.
We aren't even up to the standard of a group where people have to pay for TV ads to state for the record that they aren't witches.

As it happens, I am a witch, defined as having done things that groups of Christians cannot understand, and having been a member of a group that the arch diocese of London saw fit to undertake an exorcism of a building we occupied in the 1980s.

 

[DominiConnor]

I genuinely don't know what the right solution might be.

The Canadian position strikes me more like a closed shop protecting its turf than anything else.

Elsewhere I have been critical of Microsoft's qualification process, but...The 'professional bodies' so often degenerate first into lobbies, and then into merely vehicles for the gang that run it.

It's so hard to get this right., and in the current climate we can guarantee nothing except that it won't be done right.

 

[amanda.jayne]

In the end, it boils down to accountability.

All professional societies are gang run shops protecting their turf under the guise of serving the public, the profession, exploring strange new worlds, seeking out new life, and boldly going where no man has before in exchange for a certificate, a stamp and the right to be held personally liable (tho occasionally they get a thing or two right).

Engineers do this through their licensing bodies as lawyers and doctors do their respective boards. FINRA kinda does this through the 24 - Though Id be hard pressed to believe the average run-of-the-mill 24 would have the sophistication to oversee quant activities (hello Corvair?). FINRA has acknowledged a similar issue with the 86/87 licensing of technical analysts and allows excemption with the MTA similar to the way it does the CFA. Again, accountability.

Back to the issue at hand, the Oxford Dictionary states:

Pronunciation:/ˌenjəˈni(ə)r/
noun

• a person who designs, builds, or maintains engines, machines, or public works
• a person qualified in a branch of engineering, especially as a professional:an aeronautical engineer
• the operator or supervisor of an engine, especially a railroad locomotive or the engine on an aircraft or ship
• a skillful contriver or originator of something:the prime engineer of the approach

verb


[with object]

• design and build (a machine or structure):the men who engineered the tunnel
• skillfully or artfully arrange for (an event or situation) to occur:she engineered another meeting with him
• modify (an organism) by manipulating its genetic material:[as adjective, with submodifier] : (engineered) genetically engineered plants

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