In the centenary year of the publication of Bachelier's thesis, what today is considered as the foundation of modern finance, we had the opportunity to invite experts in this relatively new field in mathematics to participate in a meeting at the University of Konstanz, Germany. This could be the place to consider the historical development, but as Professor Girlich presented a remarkable lecture on the past of what now is known as mathematical finance, we refer the reader to the article in this volume. Instead w etak e the opportunity to express our thanks to those colleagues who made this workshop possible: to Professor Sondermann, University of Bonn, Ger- many, who in a sense initiated the idea, to our friends Mark Davis, Robert Elliott, and Xun Yu Zhou, whose advices were extremely helpful in establishing the pro- gram of the conference, and to the invited lecturers Nicole EI Karoui, Ec khard Platen, and Stan Pliska for carefully preparing their lectures. Also w egratefully appreciate our students' help during the conference and Mrs Weisser's successful efforts in providing our guests with visa and hotel reservations. Last we should mention the students of the business department who organized a great conference dinner on Mainau island and who documented the meeting in a lot of photos. Finally we thank our wives Evi and Jie for giving us leave from home (-v.ork) to organize the conference.

The year 2000 is the centenary year of the publication of Bachelier's thesis which - together with Harry Markovitz Ph.D. dissertation on portfolio selection in 1952 and Fischer Black's and Myron Scholes' solution of an option pricing problem in 1973 - is considered as the starting point of modern finance as a mathematical discipline. On this remarkable anniversary the workshop on mathematical finance held at the University of Konstanz brought together practitioners, economists and mathematicians to discuss the state of the art. Apart from contributions to the known discrete, Brownian, and LA(c)vy process models, first attempts to describe a market in a reasonable way by a fractional Brownian motion model are presented, opening many new aspects for practitioners and new problems for mathematicians. As most dynamical financial problems are stochastic filtering or control problems many talks presented adaptations of control methods and techniques to the classical financial problems in a [ portfolio selection a [ irreversible investment a [ risk sensitive asset allocation a [ capital asset pricing a [ hedging contingent claims a [ option pricing a [ interest rate theory. The contributions of practitioners link the theoretical results to the steadily increasing flow of real world problems from financial institutions into mathematical laboratories. The present volume reflects this exchange of theoretical and applied results, methods and techniques that made the workshop a fruitful contribution to the interdisciplinary work in mathematical finance.

The 4th Bad Honnef Conference on Stochastic Differential Systems highlighted recent advances in the areas of stochastic control and filtering theory as well as stochastic analysis. Special emphasis was put on the use of adaptive methods in stochastic systems analysis and on the theory of random fields, both very active fields of current research. There were six survey lectures, two of them on adaptive control of linear stochastic systems (Kumar, Lai), two on problems in stochastic analysis and random fields, (Surgailis, Wong) and one on singular perturbations in nonlinear filtering (Bensoussan). In addition, 37 research papers pertaining to the main topics of the conference were presented.