The future of financial engineering/quantitative finance

[Jinle]

Hi all,
I am studying undergraduate stats/CS and very interested in quantitative finance and want to pursue a career in this area. But after the global finance crisis, I feel a bit worried about the future of financial engineering. A lot of quant jobs/businesses have lost and may never come back. The financial services industry is now under more stringent regulation and scrutiny, which may lead to less room for financial innovation. And financial innovation is the heart of FE. What's the future of FE? Will there be any new financial innovations as we have seen in the past few years?
If FE is hard in future, will risk management be more promising? I have been thinking about my career future for a while and I really look forward to some suggestions from people who have industry experience in FE and risk management. Any opinion will be very appreciated. Thanks.

 

[DanM]

Someone can correct me if I am wrong, but weren't complex derivatives created in large part due to companies wanting to avoid or get around certain regulations (IE capital requirements?) If so, then wouldn't there be as much, if not more, demand for financial engineers who can aid financial institutions in "regulatory arbitrage" given a more stringent regulatory enivronment?

 

[joel_b]

FE and Risk Management aren't mutually exclusive. Every industry in the future will continue to apply more technology, no matter what the regulations are. Financial as much as any other, as long as there is money to be made.

 

[Connor]

I just finished reading My Life As A Quant and he worked in both areas. I think if you have the underlying knowledge (finance, math, etc) then you should be alright in the long run.

 

[const451]

"Lobbying by Wall Street has blunted efforts to step up regulation on derivatives trading by carving out exceptions or leaving the status quo in place.
Derivatives took blame for some of the worst debacles of the financial crisis. But a year after regulators and critics began calling for an overhaul in the way they are traded, some efforts have been shelved and others have been watered down."

Derivatives Overhaul Has Failed - WSJ.com