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At a conceptual level, three arguments could be used to justify such a multi-pronged approach. First, banks are subject to multiple sources of risk or balance sheet fault-line. Historical experience suggests they fail for a variety of different reasons. To misquote Tolstoy, while sound banks tend all to be alike, unsound banks tend to be unsound in their own way. At least in principle, this could point to the need for 17  All speeches are available online at www.bankofengland.co.uk/speeches  17  different types of regulatory constraint to counter different balance sheet fault-lines: one instrument for each market failure. This is, if you like, the Tinbergen Rule as it applies to financial regulation (Tinbergen (1952)). Second, uncertainty as well as risk is pervasive in the financial system. These Knightian (1921) uncertainties have multiple sources - measurement of the risks banks face, how contagion propagates across the financial system and how regulatory actions affects behaviour, to name but three. A portfolio of regulatory tools can be seen as a means of offering insurance against these uncertainties. This is, if you like, the Brainard Rule as it applies to financial regulation (Brainard (1967)). Third, any individual regulatory constraint creates incentives for banks to respond in ways which may seek to avoid or arbitrage the rules. In the next section, we discuss how having multiple regulatory constraints might mitigate this risk. In this section, we discuss the conceptual case for multiple regulatory constraints before presenting some new empirical evidence. Table 2 summarises some of the key arguments.