For several years, government regulators have struggled to agree on a common framework for capital requirements for leading global financial institutions, called Basel II, to replace the much simpler and admittedly flawed Basel I. This book, by lawyers, economists, and experienced financial specialists, evaluates various aspects of risk management and the associated needs of banks, securities firms, and insurance companies for capital. The topic is necessarily technical, and some of the chapters are not for the nonspecialist, but this is a useful source for anyone concerned with the evolution and well-being of the world financial system. Basel II represents an international effort to find a sensible common denominator to diverse national regulatory approaches to financial institutions that compete with one another in a global market, and it is important to get the regulatory framework right -- or at least not badly wrong. The book's authors are critical of the "command" approach of Basel II, point out its flaws and inconsistencies, and favor instead much greater reliance on discipline from the financial markets, offering several proposals to improve that discipline.