Financial engineering is a multidisciplinary field involving
financial theory, methods of
engineering
Engineering is the use of scientific method, scientific principles to design and build machines, structures, and other items, including bridges, tunnels, roads, vehicles, and buildings. The discipline of engineering encompasses a broad rang ...
, tools of
mathematics and the practice of
programming.
It has also been defined as the application of technical methods, especially from
mathematical finance
Mathematical finance, also known as quantitative finance and financial mathematics, is a field of applied mathematics, concerned with mathematical modeling of financial markets.
In general, there exist two separate branches of finance that requir ...
and
computational finance, in the practice of
finance.
[Tanya S. Beder and Cara M. Marshall, ''Financial Engineering: The Evolution of a Profession'', Wiley (June 7, 2011) 978-0470455814]
Financial engineering plays a key role in the
customer-driven derivatives business
— delivering bespoke
OTC-contracts and
"exotics", and implementing various
structured products
A structured product, also known as a market-linked investment, is a pre-packaged structured finance investment strategy based on a single security, a basket of securities, options, indices, commodities, debt issuance or foreign currencies, an ...
—
which encompasses quantitative modelling, quantitative programming and
risk managing financial products in compliance with the regulations and
Basel
, french: link=no, Bâlois(e), it, Basilese
, neighboring_municipalities= Allschwil (BL), Hégenheim (FR-68), Binningen (BL), Birsfelden (BL), Bottmingen (BL), Huningue (FR-68), Münchenstein (BL), Muttenz (BL), Reinach (BL), Riehen (BS) ...
capital/liquidity requirements.
An older use of the term "financial engineering" that is less common today is aggressive restructuring of corporate