Risk Latte - Scientist and a Derivatives Structurer - Emile du Chatelet

Scientist and a Derivatives Structurer - Emile du Chatelet

Rahul Bhattacharya
December 20, 2006

If you tour the front office trading and structuring teams of top tier banks and investment banks in Asia, Europe and the U.S. you are bound to come across many Frenchmen, bright as a ray of sunshine. It is no secret that the French are exceptionally bright in disciplines of mathematics and physical sciences and they put these to very good use in banks trading and analyzing financial derivatives.

But have you come across any Frenchwoman, who is a bright scientist or a mathematician and is a trader or a derivatives structurer in a bank? We have not, but we are pretty sure that there must be quite a few! But we know of at least one French woman, who was not only a scientist and a derivatives structurer but also a beacon of light for entire Europe . Unfortunately, she did not get a chance to work in an investment bank. We refer to a very interesting and wonderful article in The Financial Times today (Dec 20, 2006) written by David Bodanis.

About three hundred years ago Emilie du Chatelet, an extraordinary Frenchwoman, became a compatriot of Voltaire, famous French philosopher. Together they created a research institution in Eastern France which was way ahead of its time and where a lot of Enlightenment ideas were developed. Miss du Chatelet and Voltaire remained good friends for a long time and it is said that "at one point when he got into hiding because of a gambling debt, she invented a modern form of (financial) derivatives, securitizing government tax collectors' future income stream, and used profits from that to get Volataire free.

But being a derivatives structurer was just a side act. She was above all a scientist and a thinker, way, way ahead of her time. We recommend the article published in The Financial Times to all readers. Reading it is a pure delight.

Reference : The above is referenced from The Financial Times, Dec 20, 2006, page 13. Some of the sentences are quoted ad verbatim.

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