A complex quantum computing approach to complex financial risk
A new quantum algorithm could eventually make it easier for banks to manage the systemic risk that helped bring down the financial system more than a decade ago.Why it matters: Major financial institutions spend huge computing resources in calculating the systemic risk that may be contained in their portfolios. Replacing classical computing with a quantum architecture could allow them to do it faster and cheaper.What's happening: Zapata Computing, a Massachusetts-based quantum software company, and the Spanish bank BBVA are collaborating to develop a quantum algorithm to target credit valuation adjustment (CVA).CVA is a change to the market value of derivative adjustments that account for credit risks from counterparties. It was introduced as a new requirement for banks following the 2007–2008 financial crisis, when the banking system was almost...
