Should the Nobel Prize for economics be abolished? That is one of the suggestions in Pablo Triana’s provocative book Lecturing Birds on Flying. Triana, formerly a derivatives trader and academic at the University of Madrid, makes a simple assertion. Financial models, such as value at risk (VaR) and the famous Black-Scholes-Merton (BSM) model, which won its founders a Nobel, have done more harm than good. “Make no mistake, quantitative finance had a very large hand in what could well be the worst financial crisis in the history of mankind,” he writes.

His book is a critique bordering on an assault on mathematical – or quantitative – finance. From the opening chapter, “Playing God”, Triana maintains that the fundamental assumptions on which mathematical finance theory are based are wrong. Yet the theory continues to hold sway.