Sunday, June 06, 2010
Myron Scholes on Financial Innovation and Regulation
Myron Scholes is a Nobel Laureate for his work in financial innovation, the Frank E. Buck Professor of Finance, Emeritus, at the Stanford Graduate School of Business, and the chairman of Platinum Grove Asset Managemen. The seemingly esoteric mathematical model he and Fisher Black developed for pricing options is now checked on every trading floor and is used even by stogy accountants. The Economist interviews him on why innovation must lead, how markets should be regulated, and why taking huge risks became so comfortable going into the financial crisis.