The Deputy Governor discusses the objectives of regulation in a liberalised financial world, and how far these are compatible with other aims. The broadest purpose of official intervention in the field is, he argues, to contain systemic risk. Increasingly, financial regulation has also become concerned with providing consumer protection and ensuring high standards of business conduct. And while it is right that regulators are concerned with these issues, if complete protection were the aim, then the standards that regulators would need to apply would impose large costs in terms of damage to the competitive efficiency of the financial services industry and the benefit that it can bring to the economy as a whole. The Deputy Governor suggests that the difficult balance between regulation and competition is inherently a political rather than a technical judgement, and is, perhaps necessarily, determind piecemeal. Nonetheless, he argues that it is important that legislators and consumers are aware of the nature of the trade-off between the economic benefits of free, competitive markets on the one hand, and the social benefits of protective regulation on the other.