on the foreign exchange markets and in derivatives. Fortunately, there are regulatory measures to limit the risk of failure in a Large and Complex Financial Institution. All banks operate under the Basel Capital Accords, set up by the Bank for International Settlements, and their 'Risk' departments enforce "BIS 1" and nowadays the "BIS 2" risk accounting regimes. These are complex sets of rules allowing the bank – and its regulators – to know how much money is at risk in trading positions, no matter how complex, and how much 'regulatory' capital' must be set aside as a buffer against each trade going sour. Further, there can be no concentration of risk with one counterparty, no matter how large they may be. That last measure – the counterparty risk limit – is every market player's best protection against the failure of a trading partner. And if that player was the only company hit by their trading partner's bankruptcy, or one of a few dozen players caught in the same position, they would all be safe. But we still don't know what will happen if every market player, everywhere and in every market took the same hit. Which is, of course, the perfect description of 'systemic risk'. Banking