FEN 2007 Annual Special Report: Graduate Education Programs in Financial Engineering, Mathematical Finance, Computational/Quantitative Finance and Risk Modeling/Management

Well, here it is: The fifth annual installment of our Special Report on Graduate Education Programs in Financial Engineering, Mathematical Finance, Computational/Quantitative Finance and (new this year) Financial Risk Modeling/Management. Special Report editor Laura Sullivan has done a wonderful job of interviewing thirty (Yes 30) programs worldwide and incorporating the salient facts on each program in this summary article. Does this report represent a comprehensive review of all programs worldwide? Absolutely not, and I encourage prospective students interested in pursing a graduate education in this field to begin with this report and continue their research using other websites and search engines like Google.com. But this list is a great place to begin.

We are grateful to the five programs which co-sponsored this year's Special Report (The University of California, Berkeley; University of Tulsa; George Washington University; Brunel University; and Baruch College- City University of New York). Their financial support was instrumental in allowing us to produce and publish this popular report. The exclusive articles featuring each co-sponsor can be accessed by clicking the links in the first table below.

We remember very well the first year we launched this Special Report in 2003. There were less than fifteen programs we could find based on primary research that qualified for coverage in the report. That number has grown steadily each year to this year's thirty programs which only reinforces the growth of financial engineering and its growing importance across all aspects of the financial services industries- buy side, sell side, corporate finance, alternative finance and (as a profession) risk management.

We hope you enjoy this year's report we've assembled on graduate programs worldwide.

Financial Engineering News

By Laura Sullivan, Special Report Editor

Again, like last year and the year before, the applicant pool for graduate programs in financial engineering is growing significantly. The demand for the specialized skills that are earned with a Master’s degree in Financial Engineering (or like-titled degree) is spurring students and experienced professionals to pursue higher academic goals. Whether the study leans towards finance or mathematics, theory or application, schools with existing programs are keeping their curriculum sharp and new institutions are joining the trend to meet market demand. As perspectives turn to global markets and the knowledge of financial engineering is applied to new business realms, one thing remains consistent in every program: excited anticipation for the developments of tomorrow.

In this article, we summarize discussions with individuals from 30 programs in the United States, Europe and Asia, highlighting the many differentiations in approach to the financial engineering graduate degree.

Baruch College (report co-sponsor: click on the link to read their exclusive article)
What has made the Master of Science in Financial Engineering (MFE) program at the Weissman School of Liberal Arts at Baruch College in New York City unique since its inception in September 2002 is the local make-up of its students; nearly 65 percent of the applicants are U.S.-based, about 40 percent from New York, at this public school.

But that is not the only novel aspect to the program, according to director Dr. Dan Stefanica. “Whether you want to do full-time or part-time studies, you have to be good enough to be admitted, and then you will be our student, period,” Stefanica says. This makes for a strong bond between all students and, accordingly, an active alumni association, of which the large majority work in New York to easily provide industry updates and mentoring.

But up-and-coming does not only mean hot trends and new elective options. Stefanica makes sure that the three-semester, 12-course MFE program reaches its goal of “creating all the necessary conditions for our students to be successful” regardless of economic swings with a core of C++ programming requirements. “This is a cyclical business,” he says. “The general market is so good right now. But times will change. We are strengthening our program for just those times.” CLICK HERE to read more about this program at our website Directory of Graduate Education Programs.

Boston University
Unlike most other programs, at Boston University students earn a Master of Arts in Mathematical Finance. The elegance of program introduction deserves that definition: “I have been fascinated by the beauty of mathematics since childhood … I invite students with a strong affinity for mathematical reasoning to take a glimpse into the field of mathematical finance to see if this field appeals to them intellectually,” writes Dr. Andrew Lyasoff, program director.

The rest of the program is summed up as “not only relevant and current, but also coherent, consistent and efficient.” The three-semester, 10-course curriculum presents practical and theoretical mathematical principles within a financial context.

Applicant numbers are increasing, and with it more students having considered the field late in their undergraduate studies, an issue all programs need to address, says Lyasoff. On the other end of the applicant field, BU offers experienced professionals a five-course Certificate in Mathematical Finance. Such continuously morphing programming reflects the field of financial engineering itself.

“This area will expand into risk management and also what we call corporate finance, but on mega scale—mergers between huge corporations,” Lyasoff says. “And that will require completely different financial tools that I think have yet to be developed. Another area is corporate law. Business law was basically written in the thirties; now we live in a profoundly different world. Lawyers need to understand micro-finance—how financial markets work on a micro scale.”

“I think the future for financial engineering is … I wouldn’t use the word bright, because it’s going to be really hard. We’re going to have to adjust, first our research and then the education in financial engineering because we have to incorporate these new trends. Nobody is better positioned than the graduate programs in financial engineering to provide for this.” CLICK HERE to read more about this program at our website Directory of Graduate Education Programs.

Brunel University/CARISMA (report co-sponsor: click on the link to read their exclusive article)
At Brunel University in West London, a full-time, one-year Masters of Science degree is offered in modeling and management of risk. The program is run out of the Centre for the Analysis of Risk and Optimisation Modelling Applications (CARISMA) at Brunel which is headed by Dr. Gautam Mitra. While the emphasis of the program is very much on financial risk modeling and management, it also covers and considers related risk fields such as environmental and industrial risk.

The program consists of five study modules: Risk Overview, Regulation and Environmental Risk; Applied Risk Modeling and Optimization in Financial Planning; Financial and Treasury Management; Risk Simulation and Decision Analysis; and a final Dissertation based on an independent research project. “The research projects are based both on ideas developed within CARISMA and in conjunction with commercial enterprises such as financial institutions which sponsor projects” says Dr. Mitra. “These projects are conducted during the final four months of the program- June to September and are supported by a faculty advisor”.

There are currently fifteen students enrolled in the MSc. Program for modeling and management of risk. The program begins at the end of September each year and concludes twelve months later. 40% of the student body comes from Europe and the remaining 60% from developing countries, notably India, China and Pakistan. CLICK HERE to read more about this program at our website Directory of Graduate Education Programs.

City University of London
“Our programs are the most quantitative finance masters in the U.K.—on par with the top MBA programs offered in the States,” says Mario Levis, professor of finance and associate dean, Master of Science programs at the Cass Business School of the City University of London. “The size of Cass (over 100 academics), its set-up, which includes a world-renowned actuarial faculty, and its location (in the heart of the city) allows us to be at the cutting edge of quantitative finance and to deliver the whole range of areas important in quantitative finance.”

The two degrees offered—Master of Science in Financial Mathematics and Master of Science in Quantitative Finance—take a full year to complete and cover analytical and quantitative areas, C++ as well as other computer languages and modules to introduce recent inceptions, such as application of Lévy processes and stochastic optimal control, and credit derivatives valuation. There are also hands-on practical resources, like the Reuters Room and the Bloomberg Dealing Room.