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Every industry experiences strategic inflection points which offer promises as well as threats. The crisis of 2007-2009 was one of strategic inflection for the banking industry, and a significant part of the danger came from the fact that risk pricing was found desperately wanting. The flaws in the existing risk pricing system were exposed, but this could also be the starting point of a new, innovative and more accurate risk regime - indeed, if the global economy is to recover with any long-term strength, it must be. Deconstructing the failures of the past, and introducing some of the best techniques and disciplines for the future, 'Risk Pricing' is an essential guide to how the financial world got risk so badly wrong - and how it might avoid doing so again. Bringing much needed sunlight on the workings of modern financial risk, and the inadequacies of past attempts to price it, amongst numerous topics the author covers are: - Why the response of governments to the 2007-2009 crisis was seriously flawed - How risk complexity makes pricing in the 21st century particularly difficult, and what can be done about it - The application of Feynman diagrams in risk management - Why the top methodology of physicists - quantum electrodynamics (QED) - offer a potential solution with the qualities and capacity necessary for this complex task This is a book about managing risk through the correct pricing of exposure embedded in financial products. A high level risk control plan is necessary because, in many banks and other financial institutions, even CEOs and senior managers have often lacked the timely and detailed information they require to watch over exposures building up in warehoused positions. Regulators, too, have struggled to monitor risk, which means there is no time to lose in implementing a better risk pricing method. Another global economic crisis could take place if changes are not made.