Regulating the Regulator : Improving Consumer Protection under a Twin Peaks Regulatory Framework


by Dr. Andrew D. Schmulow

International Review of Financial Consumers, Vol. 3, no. 1, 2018, pp: 1-14.

Australia is in the midst of a financial regulatory crisis. Evidence of malpractice, fraud, criminality, contempt for the law, and the abuse of consumers on an industrial scale, all while Australia’s Twin Peaks regulators looked on, has come as a shocking surprise. The implications stretch well beyond Australia: they are relevant wherever the Australian ’Twin Peaks’ model has been adopted or is under consideration. This article argues that the Twin Peaks model must be analysed from the perspective of regulatory design, as well as implementation. The design – the architecture of Twin Peaks – remains optimal. However the implementation – the plumbing – requires urgent reforms. Drawing on the work of notable international scholars, this article proposes a new accountability framework for the two, peak regulators, in order to enhance their efficacy. In the process of rescuing Twin Peaks from its current inadequate plumbing, consumers may expect to enjoy levels of protection commensurate with those of a developed economy possessed of rule of law.

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Also published in SSRN Journal.