The Bank of England has published Sir Mervyn King’s Mansion House speech. In his speech King commented on three themes: (i) monetary policy; (ii) macro-prudential policy and work of the new Financial Policy Committee at the Bank of England; and (iii) the new approach to banking regulation that will follow the creation of the Prudential Regulation Authority ("PRA"). King advises that the draft Financial Services Bill makes it clear that the aim of banking regulation will be to minimise the adverse impact of a failure of a firm on the stability of the financial system as a whole. As such, resolution will be at the heart of the new regulatory regime and supervisors will act in the knowledge that resolution powers can and will be deployed in the event of firm failure. However, King notes that adequate resolution procedures and sufficient loss-absorbing capital should be seen as complimentary to each other and argues that all institutions should have much higher levels of loss-absorbing capital than they did before the financial crisis and that should be in the form of common equity. Further, King states that the style of regulation will change with the PRA arguing that prudential supervision can be operated at a lower cost by reducing the burden of routine data collection and focussing on the major risks to the system.