by Dr. Andrew D. Schmulow
Daily Post, 19 March 2015.
SOUTH Africa is well on its way to the adoption of a new financial system regime – the socalled Twin Peaks. This regime is modelled closely on Australia, and represents the most important financial system reforms since the Republic left the Gold Standard in 1932.
Twin Peaks is currently in vogue internationally. Credited as it is with Australia’s remarkable performance during the global financial crisis. Twin Peaks has been adopted in the Netherlands, New Zealand, the UK, variants in France and Germany, and is under consideration in China. Australia was first to implement it, fourteen years ago.
As the name suggests, two peak government bodies are created – one to enforce bank regulations – the Prudential Authority, and another to ensure market conduct and consumer protection – the Financial Sector Conduct Authority. Together with the SA Reserve Bank, these agencies will be charged with protecting South Africa from financial crises and international financial contagion, while ensuring that market participants behave, and do not abuse consumers.
Also published in The Star, The Pretoria News, Cape Times, Cape Argus, The Natal Mercury and Isolezwe.