This chapter takes a more detailed look at the flaws in the prudential framework that was in place when the crisis erupted and at the required remedies. It begins by discussing the Basel Accords and the breakdown of the Basel prudential regime. It then explains the necessary reforms. It argues that three types of reforms are necessary: (1) a much more powerful and independent banking supervisor; (2) much simpler, and easier to apply, prudential regulation; and (3) the installation of a prompt corrective action regime for the management of crises, including a special resolution regime for systematically important financial institutions.