This e-book explores the recent financial crisis. The first paper provides a clear and comprehensive account of how it has played out in Europe and of the resultant debate about its implications for banking regulation. The next two papers address the causes of the grave difficulties the banking industry has faced. Robert S. Clarkson raises some fundamental questions about both the theoretical foundations and the practice of modern finance and explains how important lessons can be drawn from actuarial science and the seminal work of Adam Smith. Robert Sollis deals with the calculation and interpretation of the value at risk statistic – an issue which has been placed by many observers at the very heart of the crisis. The final paper deals with the vital practical issue of the nature of the major regulatory reforms which will inevitably emerge as a result of the crisis. She explains that regulatory intervention is likely to be both substantial and rapid.