Quant Congress USA: Derivatives have had negative social utility, says Dupire

Dealers have sold products their clients did not need, says top quant – and industry must refocus on legitimate risk transfer

Derivatives have been abused by banks, undermining their clients, and dealers must refocus on customer needs, according to a top quantitative analyst.

Speaking at Risk's Quant Congress USA event in New York yesterday afternoon, Bruno Dupire, head of quantitative research at Bloomberg, argued derivatives should be used to transfer risk rather than create it, and that many derivatives products have not served this purpose.

"The social utility of derivatives has been globally negative. There have