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Risk Modeling
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Risk Modeling
Practical Applications of Artificial
Intelligence, Machine Learning,
and Deep Learning

Terisa Roberts
Stephen J. Tonna
Copyright © 2022 by SAS institute, Inc. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

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 Contents

Acknowledgments xi

Preface xiii

Chapter 1 Introduction 1
Risk Modeling: Definition and Brief History 4
Use of AI and Machine Learning in Risk Modeling 7
The New Risk Management Function 7
Overcoming Barriers to Technology and AI Adoption with a
Little Help from Nature 10
This Book: What It Is and Is Not 11
Endnotes 12
Chapter 2 Data Management and Preparation 15
Importance of Data Governance to the Risk Function 18
Fundamentals of Data Management 20
Other Data Considerations for AI, Machine Learning, and Deep
Learning 22
Concluding Remarks 29
Endnotes 30
Chapter 3 Artificial Intelligence, Machine Learning, and Deep
Learning Models for Risk Management 31
Risk Modeling Using Machine Learning 35
Definitions of AI, Machine, and Deep Learning 40
Concluding Remarks 52
Endnotes 52
Chapter 4 Explaining Artificial Intelligence, Machine Learning,
and Deep Learning Models 55
Difference Between Explaining and Interpreting Models 57
Why Explain AI Models 59
Common Approaches to Address Explainability of Data Used
for Model Development 61

vii
viii ▸ Contents

Common Approaches to Address Explainability of Models and

Model Output 62
Limitations in Popular Methods 68
Concluding Remarks 69
Endnotes 69
Chapter 5 Bias, Fairness, and Vulnerability in Decision-­
Making 71
Assessing Bias in AI Systems 73
What Is Bias? 76
What Is Fairness? 77
Types of Bias in Decision-­Making 78
Concluding Remarks 89
Endnotes 89
Chapter 6 Machine Learning Model Deployment,
Implementation, and Making Decisions 91
Typical Model Deployment Challenges 93
Deployment Scenarios 98
Case Study: Enterprise Decisioning at a Global Bank 101
Practical Considerations 102
Model Orchestration 103
Concluding Remarks 104
Endnote 104
Chapter 7 Extending the Governance Framework for Machine
Learning Validation and Ongoing Monitoring 105
Establishing the Right Internal Governance Framework 108
Developing Machine Learning Models with Governance
in Mind 109
Monitoring AI and Machine Learning 112
Compliance Considerations 122
Further Takeaway 125
Concluding Remarks 126
Endnotes 127
Chapter 8 Optimizing Parameters for Machine Learning Models
and Decisions in Production 129
Optimization for Machine Learning 131
Machine Learning Function Optimization Using Solvers 133
Tuning of Parameters 136
Other Optimization Algorithms for Risk Models 141
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 Contents ◂ ix

Machine Learning Models as Optimization Tools 143

Concluding Remarks 147
Endnotes 148
Chapter 9 The Interconnection between Climate and Financial
Instability 149
Magnitude of Climate Instability: Understanding the “Why”
of Climate Change Risk Management 152
Interconnected: Climate and Financial Stability 157
Assessing the impacts of climate change using AI and machine
learning 158
Using scenario analysis to understand potential economic
impact 160
Practical Examples 170
Concluding Remarks 172
Endnotes 172

About the Authors 175

Index 177
 Acknowledgments

Terisa Roberts: To my husband, best friend, and partner, Johan, and

our three children, Gary, Cara, and Isabella. Thank you for making me
laugh. Stay curious and always keep dreaming.

Stephen J. Tonna: To my darling wife, Nini, and newborn son,

Sebastian James, who have both heard the “tap” of laptop keys into
the early mornings . . . my apologies for all the noise, but the amaz-
ing outcome is that little Sebastian is now an avid fan of both typing
on laptop to help Papa and learning principles of machine learning
algorithms!

xi
 Preface

FUTURE OF RISK MODELING

It is said that we are entering the fifth industrial revolution: the age
of artificial intelligence. The ability of computers to start performing
human tasks (called artificial intelligence, AI) and the wider use of
complex algorithms that detect nonlinear relationships and self-­learn
(called machine learning) are starting to mature from experimentation
to production and, in turn, revolutionizing many aspects of the finan-
cial services industry.
The uptake of these technologies for process automation and in
digital customer journeys is growing exponentially in many indus-
tries, yet we are observing a more conservative and slower uptake in
financial risk management. In an era where so much information is
available on the use of AI and machine learning, financial organiza-
tions are cautious about its pertinence in regulated areas that expect
compliance and transparency in decision-­making.
At the same time, the digital revolution is occurring against a back-
drop of an increasingly uncertain world. Volatility is at an all-­time high.
The risk management function is contending with new types of risks
every day. Organizations around the world are dealing with myriad
risks such as a haphazard recovery from the COVID-­19 pandemic, ris-
ing inflation, cumulating geopolitical risks, and the impacts of climate
change.
With this book, we want to highlight the strengths and weaknesses
of AI and machine learning and explain how both can be effectively
applied to everyday risk management problems, as well as efficiently
evaluating the impacts of shocks under uncertainty, such as global
pandemics and changes in the climate. Throughout the text, we aim to
clarify misconceptions about the use of AI and machine learning using

xiii
xiv ▸ Preface

clear explanations, while offering practical advice for implementing

the technologies into an organization’s risk management framework.
With the right controls, AI and machine learning can deliver tangi-
ble benefits and become useful tools in the toolkit of the risk function.
It can improve the accuracy and speed of risk assessments compared
to human-­led or other traditional methods of decision-­making, and
at the same time introduce new ways of work in risk management
through increased automation. The rewards for innovation are not
without risks of their own, and these technologies are largely under-
regulated today (although, that will change in the future). In this
book, we also highlight the barriers that organizations face in using AI
and machine learning and provide ways to overcome them.
The book is structured to introduce AI and machine learning in
the context of financial risk modeling, including the onboarding and
preparation of diverse datasets. Throughout the book, we provide real-­
world risk management applications. The book contains dedicated
material on model implementation, explainability, and addressing
bias and fairness. It also provides details on extending model govern-
ance frameworks to AI and machine learning, the use of optimiza-
tion in machine learning, and how AI and machine learning can help
risk managers better assess and address new types of risks like climate
change.
With the transformational advances in AI and machine learning,
together with the radical speed of new development, as an indus-
try, we are only scratching the surface in its practical application in
financial risk management. With this book we aim to enable organi-
zations to continue putting in place the right frameworks and infra-
structure to enable modern technologies, and more importantly, build
proficiency and capacity in AI and machine learning.
Risk Modeling
C H A P T E R 1
Introduction

1
2 ▸ RISK MODELING

“By far, the greatest danger of Artificial Intelligence is that people

conclude too early that they understand it.”
—­Eliezer Yudkowsky

No doubt, we, as a society, are entering into new advances in

technology at ground-­breaking speed. The rapid growth in digital
data and advances in computing power open endless possibilities
for transformation in every sphere of life. At the same time, these
developments are also driving unparalleled change in human
behavior, consumer demand, and expectations. It is believed that
we are now entering the next wave of revolution: the fifth indus-
trial revolution or the age of artificial intelligence (AI). In this age,
it is said that machines are truly capable of varying degrees of self-­
determination, reason, and “thought,” working with humans in uni-
son. As a technology, AI is pervasive in every industry, including
financial services. It is also starting to mature as a useful tool in risk
management function.
However, AI is a broad term and defined by various industry bod-
ies in different ways. The Oxford Dictionary defines it as “the theory
and development of computer systems able to perform tasks normally
requiring human intelligence, such as visual perception, speech rec-
ognition, decision-­making, and translation between languages.”1 The
European Union defines it as “systems that display intelligent behav-
iour by analysing their environment and taking actions—­with some
degree of autonomy—­to achieve specific goals.”2 The Office of the
Comptroller of the Currency (OCC) in the United States defines it as
“the application of computational tools to address tasks traditionally
requiring human analysis.”3
As a scientific discipline, AI includes several subdisciplines, such
as machine learning (of which deep learning and reinforcement
learning are examples), machine reasoning (which includes knowl-
edge representation, deduction, and induction), and robotics (which
includes sensors and the integration of other techniques into cyber-­
physical systems). Despite the enormous transformational benefits
that true “AI” systems and platforms can bring to humanity, what is it
about “AI” that sends shivers down our spines? Arguably, the shivers
are caused by the fact that, for the first time in human history, we are
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Exploring the Variety of Random
Documents with Different Content
 the home of war and tumult, 18.

Generosity of the king and others, 152.

Genius, inability of, to efface ignoble birth, 45.

Girondists, cause of the name of, 246;

joy of the, on the Republic being proclaimed, 309;
plot to assassinate the, 332;
the, arrested, 337;
brought before the Revolutionary tribunal, 353;
condemnation of the, 354;
last supper of the, 355;
execution of the, 356.

Goguelat (M. de), shot by the National Guard, 206.

"Golden age of kings," the, 29.

Government, its desire to keep the people poor, 50;

the, of the National Assembly established, 127.

Grenelle, attack on the camp at, 417.

Grenoble, Parliament at, refuses to surrender to the lettres de

cachet, 75.

Guard, National, formed and placed under command, 126.

Guards, the French, protect the people, 110;

refuse to accept pardon, 128.

Guillotin (Dr.), proposes the use of his instrument, 173.

Gustavus III. (of Sweden), assassination of, 247.

Hebert, the leader in Paris, 364;
downfall and death of, 365.

Hebertists, execution of the, 365.

Henriot, arrest of, 383.

Henry (of Bourbon), death of, 27.

Henry III., the last of the Valois, death of, 27.

Henry IV. ascends the throne, 27;

character of his reign, 27;
death of, 27.

Holland, the Allies driven from, 394.

Hugh Capet seizes the French throne, 24.

Hungary, war declared against, by France, 249.

Imprisonment, horrors of, in the Bastille, 54.

Infidel writers during reign of Louis XV., 42.

Infidelity becomes the fashion, and why, 48.

Insult to the deputies of the people, 86.

Insurrection, cause of failure of the, 46;

reason for, 46;
planned against the National Convention, 400.

Intellect, if of the lower class, thought lightly of, 45.

Invasion, the fear of, arms France, 142.

Ireland, hatred of the people of, against England, 418;

expedition to, 419.

Iron chest, building of the, 252.

Isnard (Monsieur), speech of, on the Austrian war, 249.

Italian campaign, the victories of the, 421.

Italy, the campaign in, 415.

Jacobin Club, demand of, for the deposition of the king, 227;
present their mandate to the Assembly, 228;
their resolve to dethrone the king, 277;
become the dominant power in France, 295;
club-house of the, closed, 394.

Jacobins, origin of the, 75;

arrive at the summit of their power, 214;
the influence of the, 225.

Jacquerie, insurrection of the, 26.

Jefferson (Thomas), opinion of, on the condition of the French, 52;

letter of, to Mr. Jay, on the States-General, 81;
probably aided in composition of Bill of Rights, 107;
assists in preparing the Declaration of Rights, 147;
remarks of, upon the questions of the day, 154;
opinion of, concerning Louis XVI., 329.

Jemappes, battle of, 310.

 Jeunesse Dorée, rise of the band of, 390.

Joseph II. of Austria, reply of, upon the subject of the American
War of Independence, 61.

Josephine Beauharnais imprisoned in Paris, 378.

Judges bought their offices and sold their decisions, 49.

King. See Louis XVI.

Kleber, victories of, on the Upper Rhine, 395.

Laclos, editor of the Jacobin Journal, 225.

La Fayette (Marquis de), advocates the American War of

Independence, 61;
his boldness at the Assembly of Notables, 67;
joins the National Assembly, 101;
vice-president of National Assembly, 106;
presents the Assembly with the Bill of Rights, 107;
made commander of the National Guard, 126;
informs the Parisians of the king's speech, 126;
attempt of, to save Foulon, 136;
makes the Declaration of Rights, 147;
danger of, 150;
popularity of, declines, 155;
his knowledge of the royalist plots, 156;
saves the palace from destruction, 161;
presents and reconciles the queen to the people, 163;
ensures the safety of the queen's guard, 163;
confidence of, in the people, 183;
takes the oath of fidelity, 183;
accused by the people of treason, 210;
 issues an order for arrest of the king, 210;
assumption of power by, 210;
boldness of, in rescuing d'Aumont, 211;
interview of, with Desmoulins, 213;
insult to, by the queen, 220;
unpopularity of, 226;
dispersion of the Jacobin mob by, 228;
aversion of the queen toward, 240;
resigns the command of the National Guard, 243;
his speech to the Assembly on the outrages of 20th of June, 263;
burned in effigy, 264;
his plan for saving the king, 271;
calumniated by orders of the queen, 273;
denounced as a traitor, 280;
arrested and imprisoned at Olmutz, 297.

La Force, prison of, broken open, 115.

La Pérouse, instructions for his voyage framed, 58.

La Vendée, rise of the Royalists in, 332;

insurrection at, crushed, 342;
horrible executions in, 343.

Lamballe (Princess), trial and execution of, 303.

Lamotte, Comtesse, 72.

Land, proportion owned by the tax-payers, 50;

difficulty of purchasing, 52.

Latude, his imprisonment, 56;

account of his captivity, 57.

Launey (M. de), character of, 118.

Lebrun appointed minister of foreign affairs, 290.

Lefebvre (Abbé), distributes powder to the people, 117.

Légendre, attempt of, to save Danton, 367.

Legislative Assembly, formation of the, 237;

measures of the, against the non-conforming priests, 243.
See also Assembly.

Legislature, how should it be constituted? 148.

Leopold, death of, 246.

See also Austria.

Lepelletier, assassination of, 330.

Letters, anonymous, to Louis XV., 41;

men of, regarded as curiosities, 46.

Lettres de cachet, blank, filled up by the king's favorites, 53;

number issued during the reign of Louis XV., 55;
ease with which they were obtained, 55;
abolished by the National Assembly, 236.

Liancourt (Duke of), midnight interview of, with the king, 123.

Libertines still infidels, but not openly, 47.

Literature and art, state of, during reign of Louis XIV., 33.

Loan, one hundred millions of dollars on people alone, 69.

Louis Capet. See Louis XVI.

Louis Philippe, poverty of, 334;

 prediction of Danton to, 507.

Louis XIII., his reign, 27.

Louis XIV., death of, 33;

state of society during his reign, 25;
character of, 29.

Louis XV., marriage of, 38;

length of the reign of, 38;
political reasons of, for countenancing Voltaire, 49;
one hundred and fifty thousand lettres de cachet during the reign
of, 55;
death of, 57.

Louis XVI., absolute power of, 53;

character of, 58;
commencement of, as king, 58;
appointment of his ministers, 59;
love of, for blacksmiths' work, 65;
orders Parliament to register decree taxing all lands alike, 68;
banishes Parliament to Troyes, 69;
banishes the Duke d'Orleans, 70;
decrees an equal representation in States-General, 79;
orders Brézé not to molest the National Assembly, 100;
character of, by M. Bailly, 111;
midnight interview of Duke of Liancourt with, 123;
visits and explains himself to the Assembly, 124;
conducted in triumph to the palace, 125;
his loss of power, 127;
recalls Necker, 128;
visits the Parisians, 129;
accepts the acts of the people, 130;
accepts the tricolored cockade, 130;
reception of, by the French people, 131;
gives money to the poor, 133;
decides to obey the people, 162;
walks alone among the people, 166;
rumors of attempts to carry off, 175;
visit of, to the Assembly, 175;
speech of, at the Assembly, 176;
takes the oath to the people, 184;
effect of the death of Mirabeau upon, 195;
intentions of, relating to flight, 196;
surrounded by the National Guards, 197;
flight of, 198;
discovered by Drouet, 200;
arrested at Varennes, 201;
appearance of, after arrest, 204;
influence of the appearance of, 207;
carried back to Paris, 208;
prophetical exclamation of, 208;
injudicious memorial of, 212;
return of, to Paris from Varennes, 215;
entrance of, into Paris, 218;
offers a declaration of the object of his leaving Paris, 221;
presentation of the Constitution to, 231;
cordial assent of, to the Constitution, 232;
takes the oath to support the Constitution, 232;
reception of, by the Assembly, 234;
experience of, in the variableness of the mob, 234;
remarks of, to Bertrand de Moleville, 236;
the Assembly addressed by, 238;
proclamation of, to the emigrants at Coblentz, 242;
letter of, to Louis Stanislas Xavier, 242;
his protection of the non-conforming priests, 243;
speech of, to the Assembly, 244;
declares war against Austria, 246;
speech of, to the Assembly on the demands of Austria, 249;
deplorable dejection of, 254;
character of, described by the queen, 267;
plans for the escape of, 271;
 his silk breast-plate, 275;
petitions for his dethronement, 280;
insulted in the garden, 283;
takes refuge with the National Assembly, 285;
suspended by the National Assembly, 289;
a prisoner, 292;
taken to the Temple, 294;
insults of, at the Temple, 311;
summoned to appear before the Revolutionary Tribunal, 315;
trial of, 316;
anecdote concerning, 317;
informed of his condemnation, 324;
his last interview with his family, 325;
his bequests, 326;
his execution, 329.

Louis XVII. See Dauphin.

Louis XVIII. (Count of Provence), reply of, to the letter of the king
to, 242.

Lourtalot (Monsieur), incites to the rescue of the soldiers, 104.

Lyons captured by the Revolutionists, 342;

rising of the Royalists at, 398.

Maillard, his judicial labors at the prison of Abbaye, 303.

Mailly (Madame de), favorite of Louis XV., 38.

Malesherbes, execution of, 360.

Marat (Jean Paul), his advice to the people, 105;

opinion of, concerning National Assembly, 146;
desires to abrogate the death penalty, 173;
 speech of, to the Jacobin Club, 214;
trial and victory of, 335;
assassination of, 338;
bust of, thrown into the mud, 398.

Marceau, death of, 414.

Maria, wife of Louis XV., 38.

Maria Theresa a prisoner, 292;

taken to the Temple, 294;
liberation of, 351;
marriage and death of, 352.

Marie Antoinette, education of, 58;

her position, 71;
at Trianon, her troubles, 72;
accused of adultery with the Count d'Artois, 72;
involved with Comtesse Lamotte in the public estimation, 72;
intrusts her son to the nobility, 100;
effect of seeing the tricolor worn by the king, 132;
takes the oath of fidelity, 185;
plans the escape of the king, 197;
flight of, 198, 199;
arrested at Varennes, 201;
indignation of, at the disrespect shown to the king, 203;
pleads with the mayor's wife, 206;
insult of, to La Fayette, 220;
respect of, for popular rights, 234;
anguish of, at the disrespect shown the king, 238;
her hatred of La Fayette, 240;
attempt to assassinate, 266;
her opinion of the king's character, 267;
adventures of, in the mob of 20th of June, 287;
the dauphin ordered to be taken from, 346;
taken to the Conciergerie, 347;
 trial of, 348;
condemnation and letter of, to her sister, 349;
execution of, 350.

Marly, palace of, 35.

Massat, imprisonment of, in the Bastille, 56.

Masses, wretchedness of the, 47;

their condition during the reign of Louis XV., 52.

Memorial of the king on leaving Paris, 212.

Mercenaries, foreign, collected in Paris, 104.

Merovingian dynasty, the, 18.

Mirabeau, his course to identify himself with the people, 80;

character of, 80;
his expulsion from the Parliament, 80;
his aspect at the States-General, 86;
his formal "Letters to my Constituents," 87;
speech of, upon the dissolution, 99;
compares American and English revolutions with that of France,
102;
speech of, concerning the movements of the army, 106;
his position in the Assembly, 107;
instruction to, of the deputy to the king, 124;
opposes the amnesty, 139;
how regarded by the Parisians, 149;
his motives explained, 152;
supports the confiscation of church property, 171;
defends the Convention from the charge of usurpation, 174;
physical condition of, 189;
interview of, with the queen, 189;
plans of, to overturn the Constitution, 190;
 opposition of, to law against emigration, 191;
plot of, for the king's escape, 192;
death of, 193;
funeral of, 194.

Mob becomes fast and furious, 168;

actions of the, on the20th of June, 1792, 255.

Moleville (Bertrand de), remarks of, on the Assembly, 235.

Molière, his reception at the Courtiers' table, 45.

Monarchy supported by the Papacy, 48.

Monge appointed minister of the marine, 290.

Monopolists, hatred of the people against, 134.

Montesquieu explains the national policy to the people, 47.

Moors, incursions of the, into France, 20.

Napoleon. See Bonaparte.

National bankruptcy described, 63.

National Guard formed, 126;

losing influence, 150;
dispersion of a mob by the, 229.

Necker, appointment of, as minister of finance, 60;

policy of, 60;
his position and struggles, 62;
his "Compte rendu au Roi" and its effect, 63;
recommends formation of provincial parliaments, 63;
 his measures and their reception, 64;
recalled, 77;
effects upon the people of his recall, 77;
applauded by the people for refusing to attend the royal sitting,
100;
remarks of, on the conspiracy of the nobles against the National
Assembly, 102;
his advice disregarded, 107;
dismissal of, 108;
recalled, 128;
return of, to Paris, 138;
resignation of, 189.

Nemours (Duke of), his accusation and punishment, 54.

Noailles (Viscount de), services of, 139;

arm of the, rejected by the queen, 220.

Nobility, their doctrine regarding the lower class, 45;

hereditary, state of society which abolishes, 46;
much dissatisfied with the decree of equality of representation,
79;
triumph of the, 96, 97;
ordered by the king to join the National Assembly, 101;
dissatisfaction of the, with the Assembly, 101;
conspiracy of the, to overturn Assembly, 102;
yield their feudal rights, 140;
plots of the, 156;
religion of the, 170;
plans of the, 191.
See also Nobles.

Nobles obliged to unite with the king, and to promise to submit to

all the taxes, 90;
abandonment of their chateaux for a metropolitan residence, 45;
income of, in province of Limousin, according to Turgot, 45;
 position of the, in the days of feudal grandeur, 46;
now hated by the peasants, 46;
all taxation steadily opposed by the, 65-68;
every where resist the decree of Brienne, 75;
their plan for managing the States-General, 84;
exult in their supposed victory, 100;
forty-seven join the National Assembly, 101;
obstruct the action of the Assembly, 105;
plan of, to regain their ascendency, 141.

Normandy, revolt in, 24.

Notables (Assembly of), recommended by Calonne, 66;

the meeting, 67;
meeting of, called to settle questions about the States-General,
78.

Oath of fidelity taken, 184.

Orleans (Duke of), enters his protest in Parliament against the

king's commands, 70;
banished by the king, 70;
contemplates usurpation, 71;
joins the National Assembly, 101.

Orleans, massacre of the Royalists of, 308.

Oubliettes, description of, 55.

Paine (Thomas), one of the Jacobins, 224.

Papacy the right arm of monarchy, 48.

Parc aux Cerfs, institution of, 40.

Paris, from what it sprung, 19;
state of, on July 12, 1789, 111;
garrisoned by the people, 124;
municipal government of, arrogates supreme power, 145;
events at, on the king's escape, 209;
a new mayor of, chosen, 243;
mob in, on the 9th of August, 1792, 281;
arrest of the Royalists of, 300;
festival in, to celebrate the Jacobin Constitution, 339;
famine in, 398.

Parliament asserts that it has no power to register decrees, 68;

custom of, to register king's decrees, 68;
passes resolution concerning States-General, 69;
its desire to obtain feudal privileges, 73;
forced to surrender D'Espréménil and De Monsabert, 74;
meets and declares its session permanent, 74;
method of the, in receiving the king's commissioners, 76;
its condemnation of La Fayette, 298;
of the provinces abolished, 172.

Parties, number of, in France, 190.

Patronage of men of letters by nobility, nature of, 46.

Paupers, numbers of, 169.

Peasants, their hatred of the nobility and crowd, 46;

call them "vultures," 46;
their fear of tax-collectors, 50;
their difficulties, 52.

"Pensées Philosophiques" burned by execution, 48.

People side with the Parliament, 71;

 support their enemies, the Parliaments, 73;
enjoined to send in account of grievances to the States-General,
79;
condition of the, 83;
send in requests to the Assembly, 105;
bear the busts of Necker and Orleans in triumph, 109;
sack the convents for wine and wheat, 115;
arm and garrison the Bastille, 123;
escort the king to the palace, 125;
of Paris desire the king to visit them, 129;
becoming soldiers from fear of invasion, 142;
demand of the, that the king shall go to Paris, 162;
influence of the king's appearance upon the, 207;
enthusiasm of the, at the reading of the Constitution, 234.

Pepin ascends the throne, 20.

Persecution of Protestants renewed, 37;

the argument of the Church, 48.

Pétion chosen Mayor of Paris, 244;

dilatory conduct of, in the mob of 20th of June, 259;
his dismissal from the Tuileries, 262;
petitions the Assembly for the dethronement of the king, 280;
found dead in the forest, 362.

Pharamond, chief of the Franks, 18;

obtains supremacy over Gaul, 18.

Philip (the Fair) establishes his Parliament in Paris, 24.

Philip VI. crowned at Rheims, 25;

luxury of the court of, 25.

Philosophy, of the writers on, 47;

of Revolutionary writers, results of, 47.
 Pichegru appointed commander of the Parisian forces, 401.

Piety, its rarity forms an admirable foil to show up the corruption

surrounding, 48.

Pitt (William), his approval of Burke's book, 187;

statement of, to the French envoy, 240;
his opinion of La Fayette, 298.

Political economy simplified for the masses, 47.

Politics superior in influence to religion over Louis XV., 49.

Pompadour (Madame de), character of, 39;

death of, 43.

Popular sovereignty, when legitimated in France, 62.

Poverty of nobles in every thing but pride, 45.

Power of France in the hands of nobility, 64;

aid of foreign, to the noblesse, 196.

Priests, attempts of, to rouse the populace, 177.

Prisons, for what purposes used by Jesuits, 55;

number of, in Paris, 55;
terrible suffering in the, 359.

Privileged class, number of, in France during the reign of Louis XV.,
45;
dissatisfied with Turgot's measures, 60;
calculation of numerical strength of, 64.

Privileges (feudal). See Feudal.

Protestants, persecution of, by Louis XIV., 29;
number of, in France, 30;
"dragooned into Catholic faith," 30;
escape of, from France, 32;
persecution of, renewed, 37.

Province of Vendée, religious troubles in, 243.

See La Vendée.

Provinces, France divided into, 171.

Provincial Parliaments, formation of, recommended by Necker, 63.

See also Parliament.

Prussia, desire of, to withdraw from the coalition, 396.

Public credit, condition of, in France now, 65.

Rastadt, assassination of the embassadors at, 428.

Rebellion, people incited to, by Camille Desmoulins, 108.

"Reflections," by Edmund Burke, 187.

Reform, few of the nobility in favor of, 79.

Reign of Terror, France surrendered to the, 345;

more endurable than the old dominion, 402.

Religion, how represented by Revolutionary writers, 47;

becomes the policy of the nobles, 170;
the aid of, brought to bear, by the clergy, 173.
See also Christianity.
Renville (Constant de), confinement of, in the Bastille, 53.

Republicans, increase of the, 246.

Revolution, its outbreak and failure explained, 46;

list of the victims of the, 379.

Revolutionary Tribunal, origin of the, 296;

trial of the king before the, 322.

Richelieu (Cardinal), his character and influence as a politician, 27;

his death, 27;
cruelty of, to Dessault, 55;
iron-hearted firmness of, 56.

Riot, description of the first, 82;

fomented to prevent meeting of the States-General, 82.

Robespierre (Maximilian), first appearance of, 88;

desires to abolish the death penalty, 173;
demands an act of accusation against the Girondists, 336;
turns against Danton and Desmoulins, 365;
speech of, against Danton, 367;
inexplicable character of, 375;
decrees of, in favor of the existence of the Supreme Being, 375;
supposed attempt to assassinate, 396;
dawning opposition to, 377;
urged to assume the dictatorship, 378;
defeat of, in the Convention, 380;
arrest of, with his brother, 383;
assassination and rearrest of, 386;
condemnation of, 387;
execution of, 388.

Roederer (Monsieur), interview of, with the royal family, 284.

 Rohan (Cardinal), involved with Comtesse Lamotte, 72.

Roland (Monsieur), dismissal of, from the office of minister of the

interior, 254;
death of, 363.

Roland (Madame), her letter to the king, 254;

anecdote concerning, 309;
death of, 363.

Rollo, an incident related of, 23.

Roman empire, decline of the, 17.

Romeuf (M. de), arrest of the king by, 208.

Rousseau employs his eloquence for Revolution, 47.

Royal decree, customs regarding it, 68.

Royal family, flight of the, 198;

their mode of life in the Temple, 311.
See also Louis XVI. and Marie Antoinette.

Sabbath, attempts to obliterate the, 361.

Salt, duty on, abolished, 172.

Santerre appointed to the command of the National Guard, 296.

Sausse (Madame), answer of, to the applications of the queen, 206.

Schools established by Charlemagne, 21.

Sermon of the Bishop of Nancy, 86;

 of Abbé Fauchet, 144.

Sheriff obliged to have a guard, 50.

Sièyes (Abbé), his pamphlet, 78;

his motion in the States-General, 89;
its success, 90;
second pamphlet of, 90.

Societies, the jealousy with which they were regarded, 46.

Society, state of, during the reign of Louis XIV., 28;

state of, at the death of Louis XIV., 33.

Soldiers, brutal conduct of, 30;

become discontented, 103;
coalesce with the people, 103;
arrested for their oath, 104;
scatter the first mob, 109;
a loyal regiment from Flanders ordered to Paris, 157.

Sombrueil, governor of Hôtel des Invalides, character of, 119.

Spain, treaty of France with, 396.

Speech of Marat to the Jacobin Club, 215.

St. Etienne, curate of, heads the people, 119.

St. Huruge, account of him, 150.

States-General convened for May, 76;

debates which arose upon the summoning of, 78;
representation in, how to be determined, 79;
equal representation in, decreed by the king, 79;
the people enjoined to send in account of their grievances to the,
79;
number of members of, 81;
convened, 83;
delegates to, received by the king, 83;
opening of the, 85, 86;
boldness of the third estate, 87;
Necker's reception at the, 87;
attempt of, to ensnare the third estate, 87;
the conflict in the, 88.
See also Assembly and Convention.

Supreme Being, decrees in favor of the, 375;

festival in honor of the, 376.

Suspected persons, schedule of those liable to arrest, 344.

Suspensive veto, the, approved, 151.

Swiss, the, refuse to fire upon their comrades, 110.

Talleyrand, his remark concerning the diamond necklace, 72.

Tallien, speech of, against Robespierre, 381.

Talma, incident connected with the marriage of, 178.

Taxation so universal that the inventor of a new one was regarded

as a man of genius, 49;
the burden of, fell upon unprivileged classes solely, 49;
artifices used by the peasants to elude, 50;
proportion of land owned by the payers of, 50;
expedients of the collector of, to obtain the, 50;
burden of, computed, 51;
equality of, when nobles would permit it, 98.
Temple, description of the, 293.

Tennis-court, celebration of the meeting at, 255.

Texel, capture of the fleet at, 395.

Theatre, Jacobin riot in the, 239.

Thermidorians, origin of the, 379;

supremacy of the, 389.

Thiers, remarks of, on the National Convention, 410.

Third estate triumphant, 101.

Thouret (Monsieur), presents Constitution to the king, 231.

Thuriot (Monsieur), summons Bastille to surrender, 120.

Title-deeds destroyed by the peasantry, 143.

Titles of noble blood sold, 50.

Tollendal, Lally, speech of, 126.

Toulon surrendered to the Allies, 341.

Tree of feudalism, burning of the, 275.

Trials ordered to be public, 172.

Tribune, a military, advised by Marat, 215.

Tricolor worn by the king, 132.

Tuileries besieged, 286.

 Turgot (Monsieur), his appointment and career as minister of
finance, 59, 60;
his measures, how accepted, 60.

Unbelief among the courtiers, reasons for, 49.

United States, Revolution of, compared with that of France, 46.

Valmy, battle of, 306.

Valois, history of the house of, 26.

Varennes (the), king and royal family arrived at, 201;

municipality of, request the king to wait, 205.

Vaublanc (M. de), speech of, to the king, 244.

Vergniaud (Monsieur), charges of, against the king, 269;

prophetic solicitude of, 309;
sentences the king to death, 323;
spirit of the Girondists avowed by, 332;
remark of, in the prison to the son of M. Alluaud, 354.

Versailles, chateau of, commenced by Richelieu, 27;

palace of, 35.

Veto, struggle on the part of the nobility to make it absolute, 149.

Vice protected by the Church, 48.

Victims, list of the, of the Revolution, 379.

Vienne, Archbishop of, president of National Assembly, 106.

 Vincennes, brilliant festivities and spectacles at, 25.

Voltaire applies his force to assailing the corruption of the Church,

47;
unfairness of his criticisms on Christianity, 47;
befriended by Frederick II. of Prussia, 49;
revisits Paris, 62;
his reception, 62;
his death, 62;
removed to the Pantheon in Paris, 222.

Voting for the deputies in Paris, 79.

Wars, why waged by princes, 51.

Women of Paris, their march to Versailles, 159;

deputation of, to the king, 160.

Writers, revolutionary, views of, on religion, 47;

their influence in brutalizing the people, 47;
the leading, were infidels, 47.

Xavier (Louis Stanislas), letter of the king to, 242.

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