“FINANCIAL SECTOR IN FLUX” is an understatement. Several years after the 2008–09 banking crisis, we are still confronted with a weak financial sector and, as I will argue, a limited understanding of the functioning of the financial system and causes of financial instability. We also seem very uncertain about the desired structure of the industry, which complicates the design and implementation of effective remedies. In Europe, problems seem even more acute. The deadly embrace of weak governments and struggling domestic financial institutions endangers economic growth for many years to come. My reading is that fundamental changes related to information technology and the proliferation of financial markets have created a financial landscape that is highly opportunistic, transaction driven, and prone to destabilizing herding behavior. In particular, information technology has deepened markets and created trading opportunities that allow for “excessive changeability” via transactions that undermine the stability of highly leveraged institutions such as banks. Such a transaction-oriented landscape is subjected to the boom and bust nature of financial markets, and hence is more opportunistic than the more stable longer term oriented relationship focus that existed before. I will argue that this has created a very fluid financial landscape that is beyond the control of supervisors, contains enormous systemic risk and hence is fundamentally unstable. I will also argue that market forces—market discipline in particular—may well be ineffective in containing instability. Actually, my point will be that market forces are often at the root of financial instability. Structural remedies—via a fundamental redesign of the financial system—might be needed to restore stability.