The Mathematics of Banking and Finance

The world of business has changed significantly in recent years. Why? Because business has increasingly made more use of the probability, statistical methods and analytic techniques in areas where they previously were not used at all. You may feel rather uncomfortable about all of this. Perhaps you gave up mathematics, wondering what the relevance of the subject really was. Others may just need to be reminded what some of the techniques actually mean. Mathematics of Banking takes the type of techniques that you may come across in the developing world of banking, including operational risk, and explains when the techniques could be used and what if any limitations there are to these techniques. The book offers an intermediate guide to the various techniques used in the industry, and a consideration of how each one should be approached. Written in a practical style, it will enable readers to quickly appreciate the purpose of the techniques and, through illustrations, see how they can be applied in practice. Coverage is extensive and includes techniques such as VaR analysis, Monte Carlo simulation, extreme value theory, variance and many other important models.