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Nick Cercone will finish his term as chair of the CS department this month and embark on "my first sabbatical in 18 years". He's planning visits to Japan, Hong Kong, California ("I am program chair of the first IEEE international data mining conference"), Thailand, Halifax, and Spain over the coming year. "I am looking forward to it," he says. "Lots of collaborations!"

'School' of computer science proposed

Four of UW's academic units are already classed as schools: accountancy, architecture, optometry, and planning.

Computer science, with 60 faculty members, has more than half of all the students in the math faculty. (There are four other departments in math: pure, applied, combinatorics and optimization, and stats and actuarial science.)

Nick Cercone, chair of the CS department, says the "school" status was his idea: "In September I addressed a department meeting with the notion that math and CS needed a more decentralized governance in order to respond effectively and efficiently with all of the demands placed upon CS and with the dazzling speed with which our discipline was changing. I proposed that we become a school for two reasons. The change in designation was a sign to the outside world that things were evolving at Waterloo. Secondly, we sought better jurisdiction over budget, admissions, and curriculum.

"After considerable effort and (sometimes heated) discussion, the dean and I struck a CS review committee to study the overall situation of CS, especially given that both of our graduate and undergraduate programs were externally reviewed last year.

"The review committee filed its report, the last item of which was to structure a governance committee to report on appropriate governance for CS. Essentially they studied the problem for half a year and made 24 recommendations, including the change to a school within mathematics."

Cercone adds that members of his department have "voted unanimously in favour, in principle, of the report and in a subsequent special meeting discussed the report in detail".

And, he says, math dean Alan George has "verbally agreed to support the report's recommendations and in a written memo to CS faculty affirmed that agreement with some reservations which I believe can, should and must be eliminated and soon.

"So now we are in a position in which final decisions need to be made quickly. We have no chair (I am already staying on an extra month) and never before has our discipline been more ready for evolution." He says creation of a "school of computer science" has already happened in six Canadian universities "and many fine US universities".

Road closed tomorrow Work to connect the new co-op and career services building to the water mains will mean some disruption on campus tomorrow. The ring road will be closed at a point just west of the University Avenue entrance, from about 8 a.m. to 4 p.m. tomorrow Digging on both sides of the road is already obvious there this morning. That means there will be no left turn from the main campus entrance. Drivers needing to get to parking lot H or T, or other places on the west side of the ring road, must enter by Columbia Street instead. Buses that usually travel on that side of the ring road will go by the east (engineering) side instead. The visitor parking area in lot H will be closed all day tomorrow. Visitors should use parking lot C, just south of University Avenue, instead. Corridor closed in BMH The corridor leading to the loading dock in Matthews Hall will be closed tomorrow for repairs, the plant operations department says. All other building entrances will be open as usual.

A new word in Grebel's name

"As the result of a process begun more than two years ago," says a Grebel news release, "Royal Assent was given on June 29 to the Conrad Grebel University College Act, officially renaming Conrad Grebel College as Conrad Grebel University College. The College requested an amendment of Private Bill 71, approved by the Ontario Legislature on January 7, 1988, to change the name for several reasons."

Grebel has been "functioning like a university while still being called a college", it says, since it has "two faculties, an undergraduate and a graduate", and has granted some of its own degrees since its Master of Theological Studies program was introduced in 1987.

And there's confusion in the public mind: "The College is a university college of the University of Waterloo, not a community college which is what the name 'college' suggests in the public mind. . . . The College is regularly confused in the minds of high school students as another high school, as a collegiate rather than a university college." This situation, the news release says, "was not unique to Grebel. There are four university colleges on the University of Waterloo campus, each with its own teaching programs under the UW undergraduate umbrella: St. Paul's College, Renison College, St. Jerome's University, and Conrad Grebel. St. Jerome's changed its name to St. Jerome's University in 1998."

The release says it's Grebel's understanding that Renison and St. Paul's "will soon be following suit in changing their names to include University College".

The purpose of the name change, says Grebel president John Toews, was to define "more accurately the nature of Grebel as a university college within the University of Waterloo. We thought our name should state more clearly who we are."

The news release adds that everyday references to "Grebel" and "CBC", not to mention "Connie G", are likely to continue. The new name isn't reflected on the Grebel web site yet.

Of possible interest Smog alert continues Construction progress at Laurier Veterinary colleges in trouble

Book explains shared financial risk -- from the UW news bureau

Derivatives: The Tools that Changed Finance is a 200-page, essentially math-free volume, in which Phelim Boyle and his son Feidhlim Boyle, who is a financial analyst, explain in plain language what derivative financial instruments (commonly called just "derivatives") are and how they can be used effectively.

Derivatives have changed the world of finance as pervasively as the Internet has changed communications. Their use amounted to approximately $102 trillion US in 1999 -- about 10 times the gross domestic product of the United States. The derivatives market is now the world's largest financial market. Many mutual funds and pension funds use derivatives, and this makes them important for individual investors. Investors need to know what they are, who is using them and for what purpose.

"Our book is a key to unlocking and demystifying the world of financial derivatives," says Feidhlim Boyle, who will start work on Wall Street in August. "It's a Derivatives for Dummies -- without the yellow and black cover."

Derivatives are employed to transfer risk in everything from interest rates to electricity prices. But they aren't well understood and are often regarded as complicated, "technical" and even dangerous. Fortune magazine once described them as unintelligible products "concocted by rocket scientists" who make "a total hash out of existing accounting rules and even laws." Other critics say they are "too complicated to explain but too important to ignore".

The authors agree that derivatives must not be ignored. But they also insist that derivatives can indeed be explained. They offer clear definitions, outline main types of contracts and markets, describe how derivatives are used by corporations and investors, and discuss related topics. They explain "forwards," "swaps" and "options" in plain English. And they do all this without using very much math -- a rarity among publications in this field.

"We found there's a real need for a book of this type," says Feidhlim Boyle, observing that works on the subject usually involve heavy-duty math (or just offer accounts by disgruntled ex-traders). "We wanted to write a book that hits the nail on the head -- one that explains derivatives like Carl Sagan's books explain the stars."

The book presents entertaining examples to illustrate key points, including a fictional tennis match between superstars Venus Williams and Martina Hingis. "The outcome of the match is uncertain," Boyle senior explains. "If we create securities that make different payments depending on who wins, we can construct a simple financial market. We can use that to show that the prices of the securities must obey certain relationships."

The authors do admit derivatives can be dangerous, even lethal, if not handled properly. The speculative use of derivatives can lead to excessive risk-taking, large losses, even bankruptcies, as in the collapse of the giant hedge fund Long Term Capital Management in 1998, Nick Leeson and the fall of Barings Bank in 1995, and the bankruptcy of Orange County, California in 1994. But the fault in those three financial disasters was not the derivatives, say the authors, who detect common patterns of mismanagement in each case.

Derivatives: The Tools that Changed Finance is published by RISK Books and sells for $40 at the UW bookstore.

CAR

Editor of the Daily Bulletin: Chris Redmond
Information and Public Affairs, University of Waterloo
credmond@uwaterloo.ca | (519) 888-4567 ext. 3004
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