Page last updated at 19:45 GMT, Wednesday, 7 January 2009

Credit crunch: bad maths

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Paul Wilmott, an expert on quantitative finance - which is the application of mathematics to money-making - says some simple mathematical mistakes are in part to blame for the credit crunch.

He told BBC Radio 4's More or Less programme that these errors might have contributed to the mispricing of financial derivatives and thus to the travails of the banks, the credit crunch, and the economic downturn.

He explained to presenter Tim Harford how it could have happened.

More or Less is broadcast on BBC Radio 4. To find out more, visit the programme website, or subscribe to the More or Less podcast.

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