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The Financial Stability Board (FSB) published today the report on the peer review of South Africa. The report examines the progress in implementing two important financial reforms for South Africa that are relevant for the broader FSB membership: interagency coordination and the regulatory structure; and regulation of over-the-counter (OTC) derivatives markets. The report also includes follow-up actions reported by the South African authorities in response to the recommendations made by the International Monetary Fund (IMF) and World Bank under the 2008 Financial Sector Assessment Program (FSAP) assessment.
The 2008 FSAP reported that South Africa’s sophisticated financial system is fundamentally sound and that the regulatory framework is modern and generally effective. However, the institutional arrangements for financial regulation and supervision are relatively complex, involving multiple government agencies as well as several advisory and oversight committees and self-regulatory organisations. In 2011, the South African National Treasury issued a policy document for financial reform that proposed the adoption of a Twin Peaks model of financial regulation in order to improve prudential and market conduct regulation and thereby create a more resilient and stable financial system.
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