There is an interesting move underway by the US Securities and Exchange Commission (SEC) to more precisely define the meaning of certain asset backed securities (like the now infamous mortgage-backed securities that were central to the recent crash). The NY times has covered the story from a high level, but what of particular interest to me is the proposal to specify the meaning of the bonds in Python. This is a step is the right direction but Python is not the answer.

The core problem here is to give a clear and unambiguous meaning to a bond. This requires the language in which it is written is precisely defined. Python is not precisely defined. There is only a prose definition of the language, which is inadequate in the same way that the prose definitions of bonds are inadequate, and of course there are differences between various versions and implementation of Python. Since Python is not precisely defined the only meaning one can give to a program in Python is whatever the particular implementation one uses does with that program.

In contrast there are languages that are formally defined, suchStandard ML and Scheme. These would make a sound basis for the formal definition of bonds. In turns out that functional languages also make a good (meaning expressive and convenient) basis for the formal definition of bonds. There is a great paper on expressing contracts in Haskell and at least one company has implemented this idea in a commercial system (in O’Caml, I believe). So my advice to the SEC: use an appropriate subset of Scheme or Standard ML, or hire someone to create a formally defined DSL, but don’t use a language without a formal definition if precision is your goal.