Financial engineering

Financial engineering is a multidisciplinary field involving financial theory, methods of engineering, tools of mathematics and the practice of programming. It has also been defined as the application of technical methods, especially from mathematical finance and computational finance, in the practice of finance. Financial engineering plays a key role in a bank's customer-driven derivatives business — delivering bespoke OTC-contracts and "exotics", and implementing various structured products — which encompasses quantitative modelling, quantitative programming and risk managing financial products in compliance with the regulations and Basel capital/liquidity requirements. An older use of the term "financial engineering" that is less common today is aggressive restructuring of corporate balance sheets. Computational finance and mathematical finance both overlap with financial engineering. Mathematical finance is the application of mathematics to finance. Computational finance is a field in computer science and deals with the data and algorithms that arise in financial modeling.