In most of the cases when talking about the financial risk people think about standard deviation or variance (of prices or returns). However, the financial world is much more sophisticated and the measuring of the financial risk has evolved creating such measures like the famous Value at risk (VaR) or expected shortfall. The latest financial crisis has shown that the losses generated were much higher than the ones predicted by these models (see attached documents).

What do you think is the solution to this - should we develop even more sophisticated risk measures, improve the risk management and risk control or maybe financial institution should basically start doing a much simpler traditional banking business?