THE FIRST STEPS IN INTRODUCING TWIN PEAKS
This month saw the circulation of a draft Financial Sector Regulation Bill. The Bill will be step one in introducing the Twin Peaks financial regulatory system. Under twin peaks responsibility over the financial sector is split between 2 bodies. The first being the Reserve Bank and the second, probably, the Financial Service Board (FSB).
Council of Financial Regulators
The Draft mentions the creation of a Council of Financial Regulators who will co-ordinate all Regulators. The focus of the Council will be on competition, enforcement, financial stability, market conduct and legislation.
The Draft Bill gives primary responsibility for financial stability to the Reserve Bank . Thus as planned the Reserve Bank will fill the role of one of the two “peaks” or top dogs in the regulatory model.
FSB vs NCR under Twin Peaks
Various parties will now comment on the draft Bill and then the actual Bill will eventually be produced and sent to Parliament. The process of introducing and bringing Twin Peaks to life is set to take a number of years as various pieces of Legislation need to be amended and changed to allow for the new regulatory model.