The Governor considers the objectives of financial services regulation, and the extent to which regulation can be expected to provide protection in today’s financial markets. He notes the trade-off between the tightness of regulation and cost, not just direct costs but also the resulting constraints on competition in financial markets from tighter regulation. The Governor stresses that there will be failures of financial intermediaries under any conceivable regulatory regime, and that these need not imply a failure of regulation. In the end, it comes down to how much risk society wants to see in the financial system, although we must of course constantly strive to improve the quality of regulation. On the institutional structure of regulation, the Governor notes that it is necessarily complex, though no more so in the United Kingdom than in other developed markets. There are many variants on the structure, and no structure can be set in stone because market conditions can evolve.