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i've worked for many banks. amazing how reliant the whole industry, therefore the world economy, relies on excel. http://www.zerohedge.com/news/2013-02-12/how-

i've worked for many banks. amazing how reliant the whole industry, therefore the world economy, relies on excel. http://www.zerohedge.com/news/2013-02-12/how-rookie-excel-error-led-jpmorgan-misreport-its-var-years http://www.zerohedge.com/news/2013-02-12/how-rookie-excel-er...

FabHK 10y ago
That is very true, and scary indeed, given how easy it is to make mistakes and how hard to find them in Excel.
- FabHK 10y ago
  Just to expand on that - many banks employ Excel basically as a frontend for their own analytics/database (using own functions with addins). A popular trick is to allow functions to return handles that stand in for objects. Using that, you can run not only Monte Carlo simulations and PDE solvers in a pricing sheet, but even run a whole trading book including risk in Excel. Of course, you can then also overwrite certain cells to pad your PnL, as a few Credit Suisse traders did in 2007/2008 to hide their losses in mortgage backed securities. They basically overwrote bond prices to some fictitious value, overstating the PnL of their position by $540m or more...
dagw 10y ago
And despite this, and despite the mind boggling amount of money at stake, no one seems to making moves to actually do something about it. It's like the finance industry has collectively decided that a few billion in losses each year is an acceptable price to pay to get to keep using Excel.
- FabHK 10y ago
  Not quite right, there is considerable pressure from auditors to switch from Excel to "systems".
- sten 10y ago
  I’m in the industry, everyone here uses spreadsheets for everything. They only have us working on other stuff now because we’re reaching memory limits and row limits for calculations. But primarily we have a few factors working in excels favor. 1. Inertia. 2. Difficulty in switching to a more advanced solution for non-technical folks. 3. Speed. If you can get a MVP up and running before another firm you have an advantage. Even if it’s in Excel and held together with spit and string.

FabHK 10y ago

That is very true, and scary indeed, given how easy it is to make mistakes and how hard to find them in Excel.

FabHK 10y ago
Just to expand on that - many banks employ Excel basically as a frontend for their own analytics/database (using own functions with addins). A popular trick is to allow functions to return handles that stand in for objects. Using that, you can run not only Monte Carlo simulations and PDE solvers in a pricing sheet, but even run a whole trading book including risk in Excel. Of course, you can then also overwrite certain cells to pad your PnL, as a few Credit Suisse traders did in 2007/2008 to hide their losses in mortgage backed securities. They basically overwrote bond prices to some fictitious value, overstating the PnL of their position by $540m or more...

dagw 10y ago

And despite this, and despite the mind boggling amount of money at stake, no one seems to making moves to actually do something about it. It's like the finance industry has collectively decided that a few billion in losses each year is an acceptable price to pay to get to keep using Excel.

FabHK 10y ago
Not quite right, there is considerable pressure from auditors to switch from Excel to "systems".
sten 10y ago
I’m in the industry, everyone here uses spreadsheets for everything. They only have us working on other stuff now because we’re reaching memory limits and row limits for calculations. But primarily we have a few factors working in excels favor. 1. Inertia. 2. Difficulty in switching to a more advanced solution for non-technical folks. 3. Speed. If you can get a MVP up and running before another firm you have an advantage. Even if it’s in Excel and held together with spit and string.