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Debate over NCR’s Future under Twin Peaks
The proposed “twin peaks” model of financial regulation may leave the NCR under the authority of the Financial Services Board (FSB)…or not.  This has left many confused over the role the NCR will play in the future.

 

BASA logoIt seems that BASA would like to see the NCR under the FSB.

In apparent back lash from BASA over VDMS and the NCRs recent go at African Bank, Cas Coovadia, MD of the Banking Association of South Africa, said that the NCR are not implementing the National Credit Act (NCA) effectively and said the regulator “could do more”, especially in the regulating of the non-banking lending space (read: leave us banks alone). He said there are a number of issues that the NCA does handle, but implementation and regulation of these matters are not fully carried out. Another banking executive also recently said that it would be “a good thing” for the NCR to fall under the Financial Services Board.

NCR logo

 

Ms Motshegare CEO of the NCR disagrees, saying that she and her team had been enforcing the act to the best of their ability. She denies that the NCR have been picking on banks. In fact, Debt Counsellors are saying that it is about time that large creditors, like the various banks, received some much needed scrutiny and that it has been a long time coming.

Twin Peaks

Two years ago, the Treasury issued a policy document for the financial reform that proposed the adoption of a “twin peaks” model of financial regulation to improve prudential and market conduct regulation.  So far indications are that Twin Peaks would remove financially and systematically important institutions from under the NCR and relocate them to the Reserve Bank.

Mr Coovadia, says that “Part of the regulation of the financial sector must include a discussion on the credit regulator,”.

fsblogoTHE FSB

The FSB has also received critisism with some saying that it is not adding any value and is in a mess and is “inactive” and “uninfluential”. Those that oppose such a change say: “The original idea was to have an independent credit regulator — so why now change all that and have it folded under the FSB?”…” why would you want to move the NCR itself and place it under the FSB, which is throwing no punches, and no effective or powerful ones at that?”

Thus far the idea seems to be to split regulatory duties between the Reserve Bank and the FSB.

Ms Motshegare said the NCR will support any decision that was taken. “It is very difficult to say what is going happen …”