The article discusses the credit and banking crisis of 2007-2009 and its aftermath. It covers the mismanagement of credit risk, the impact of the subprime mortgage market collapse, and the failure of prudential supervision in cases like Northern Rock. The researchers explore the globalization of credit risk, the industrialization of credit risk, and the use of leveraged instruments. They also delve into the responsibilities of bank supervisors, financial regulation, and potential remedies for the problems in bank supervision. The study highlights the importance of solvency, liquidity, asset-backed paper, and the carry trade in understanding and addressing financial crises.