Sir Deryck Maughan: Big Bankers Are Mathematical Idiots

In a Sussex, England country house hotel, at the Future of Finance Initiative, a conference organised by WSJ, Sir Deryck Maughan, a partner in Kohlberg Kravis Roberts, the private equity firm, who in the 1990s was hand picked by Warren Buffett to head Salomon Brothers, spoked to assembled investment bankers.

He warned delegates that many of the flawed mathematical techniques that underpinned banks’ risk management approaches were still being used, saying that the industry had not “faced up to the intellectual failure of risk management systems, which are still hardwired into many banks and many trading floors”.