Professor Moorad Choudhry presented me a copy of his book, The Principles of Banking when he visited Mauritius to attend a banking conference which the Bank of Mauritius was hosting.

I was struck by his sound down‐to‐earth grasp of the banking scene and impressed by his academic and publishing track record. I made it a point to plough my way through his masterly tome and emerged thoroughly convinced that this book deserves a wide readership. It is, therefore, most welcome.

Banking has gone through exceptionally turbulent times over the last few years. The bankers who brought us the spectacular global financial crisis, their regulators who failed equally spectacularly, and the reformers of the banking and finance system tasked with ensuring that we minimise risks of such bust‐ups in future, have all been constantly in the news. The arcana of banking are no longer the exclusive preserve of specialists. There is keen and widespread interest to understand better what goes on in the mysterious world of banking.

This book sheds light on the subject. It returns us to basics. It is indeed a delight to have in one packed volume a text that sets out all that you wanted to know about doing the honest job of banking but perhaps did not have the nerve to ask.

As we still struggle to emerge from the 2007–2010 financial crisis in good shape, it is a boon to have such a clearly‐written guide on the fundamental principles of good banking practice. The Principles of Banking is eminently suited to the needs of banking students, but can also enlighten experienced practitioners and bank Board members. Professor Choudhry brings to this sizeable endeavour a wealth of experience in this field as a seasoned banking practitioner and well‐respected teacher.

This volume is the latest in a series he has delivered over the past decade or more covering many separate areas of banking, such as bonds, derivatives, the money market and factors underlying banking crises. With admirable skill in setting out the implications of complex numerical issues, he bridges that yawning gap between theoretical precepts of banking systems and the everyday life problems that bankers face. It is a text for everyone involved in banking from the professionals in the high‐street branches interacting with the public, the decision‐makers in the executive suite or the board room, to the supervisors and regulators in central banks and oversight agencies in their role as arbiters of current practice and designers of safer systems for the future.

Banking has a long history of crises, from the US banking collapse of 1792, to the latest debacle, rooted in the mismanagement of cheap mortgages and the confection of evidently misleading derivatives. This latest text book is both a survival guide for wayward practitioners and a treatise for students and their academic masters, which hopefully will help to steer this sector out of its shaky immediate past.

Professor Choudhry is a master of his subject but envelopes the mathematical devices he presents so clearly with a sound sense of priorities. He closes this most valuable contribution to the literature on banking with this wise adage, which we forget at our peril:

“The first principle of banking is to have principles. Or as the motto of the London Stock Exchange puts it: my word is my bond.”

I wish this book all the success it deserves in these troubled times for the banking profession.