Date: 08 01 2002
Mathematical Models and Simulations
Subject: Savings and Loan Systems Simulation
Responsibility: Architect, Project Director: Juan Chamero
Made for: Many Financial Companies of Brazil and Argentina
The Savings and Loan Systems have something similar to the well-known Chains of Hope that could become into resounding frauds if wrongly managed. Well managed and adequately monitored by governments these systems are a way to drive the whole economy upwards but always come a moment where the system collapses. However this collapse syndrome arrives one or two decades after their initiation. Well managed is also a way to become a bank because the huge amount of circulating money these systems handle.
To initiate a savings and loan business without a simulation study is like to play casino roulette. It's a game almost impossible to manage by experience or just using financial or marketing criteria: things could go up as hell and a sudden collapse is tapping the door in a matter of days!. However the simulations models are precise, through them the production policies could be tested with a reasonable precision. Like the 'Flight Simulators", to play with these models teach you a lot about finance and the time-value of money.