If making sense of the global financial crisis is difficult for the experts, then it is almost impossible for the layman. But financial mathematician Ernst Eberlein says math holds the key to preventing a repeat.
With a whole host of new investment products, such as swaps, derivatives and futures, the math professor from the University of Freiburg says it is harder than ever to identify and understand risks in the financial markets.
But he says math can help. By developing models and formulas, mathematicians can give banks and investors a clearer picture of the potential risks. However he warns that mathematic formulas often give a false sense of security, and are sometimes misinterpreted. We take a look at his work, as he looks at the role played by math has in the crisis, and what mistakes have been made.