Accountability in the twin peaks model of financial regulation in South Africa

The Financial Sector Regulation (FSR) Act 9 of 2017 implemented the first stage of the Twin Peaks model of financial regulation in South Africa. The Act established the Prudential Authority and the Financial Sector Conduct Authority to make the financial sector safer by using a more robust prudential and market conduct framework. The South African Reserve Bank received an enhanced mandate to promote and maintain financial stability. Since accountability is a core goal in financial regulation, this paper analyses the notion of accountability and specifically the accountability of the regulators in a Twin Peaks model of financial regulation. The legislative framework put in place by the FSR Act goes a long way in adhering to principles of accountability. The financial sector regulators are obliged to consult with various stakeholders such as the Minister of Finance and financial institutions. The regulators are subject to control measures, and Parliament holds them accountable. Nevertheless, the authors suggest that one more step is necessary. There should be more debate and engagement by the regulators with the general public to increase public knowledge of financial sector regulation in South Africa.