Square pegs in round holes

How geometry came to the rescue during the banking crisis

Theoretical economics for a practical problem.

Economist Paul Klemperer of Oxford University describes how he invented an auction based on a new kind of geometry to help the Bank of England as the financial crisis took hold in 2007. The auction got money to the banks and building societies that needed it most urgently. The then governor Mervyn King later called it a marvelous application of theoretical economics to a practical problem of vital importance. Klemperer describes how similar auctions can help other government departments allocate resources.