Twin Peaks: An Analysis of the Australian Architecture

by Dr. Andrew D. Schmulow

Paper presented at the 2016 Global Forum for Financial Consumers (2016 Annual Conference of the IAFICO), SungKyunKwan University, Seoul, South Korea, 2016.

This article provides an analysis of the Australian ‘Twin Peaks’ model of financial system regulation. It does so by examining the theoretical underpinnings of Twin Peaks, and investigates the crucial question of the jurisdictional location of the prudential regulator. This includes a description of how Twin Peaks functions and its strengths and weaknesses. The article argues that while Twin Peaks is the best solution to the problem of regulating for financial system stability and consumer protection, it is nonetheless imperfect to the task, and susceptible to failures.

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