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BANK OF ENGLAND (BoE) governor Mervyn King last night launched his most outspoken call yet for a regulatory revolution and a crackdown on excessive risk-taking in the City.<br /><br />In his annual Mansion House dinner speech, King called for &ldquo;instruments to prevent the size, leverage, fragility and risk of the financial system from becoming too great&rdquo;.<br /><br />His speech overshadowed Alistair Darling&rsquo;, though the chancellor still grabbed the room&rsquo;s attention when he hinted at a tax attack on the banks.<br /><br />Darling said: &ldquo;Next week I will set out a new tax code for how the banks can meet their obligations.&rdquo;<br /><br />King said the population&rsquo;s trust in the financial sector had been lost in the recession, as families and companies suffer, while the &ldquo;banking system has received financial support on an almost unimaginable scale&rdquo;. <br /><br />The governor didn&rsquo;t openly call for big banks to be broken up, though he warned that their liabilities had grown far too big as a share of GDP during the bubble. He aded that if&nbsp; institutions are &ldquo;too big to fail,&rdquo; then they are simply &ldquo;too big&rdquo;.<br /><br />In a devastating attack on Darling&rsquo;s exploding budget deficit, King demanded the government explains how it will regain control of the public finances. <br /><br />Turning to the state of the economy, King said: &ldquo;There are grounds for believing that the rapid falls in activity are coming to an end.&nbsp; But there are some equally solid reasons for believing the path to full recovery could be protracted.&rdquo;<br /><br />He added: &ldquo;When appropriate the MPC will raise&nbsp; the Bank Rate and gradually run down its portfolio of assets in a manner consistent with maintaining orderly markets&rdquo;. <br /><br />Darling was singing from a different hymn sheet. He said the solution was &ldquo;not as simple&rdquo; as limiting banks&rsquo; sizes, adding that a system to tackle failures was needed. Darling tried to defend current and possibly future tax hikes.