South Africa aims to tighten financial regulatory system

905

South Africa wants better market oversight for its retail banking sector as part of a plan to strengthen the financial regulatory system in Africa’s largest economy, the National Treasury says.

The Treasury, drawing on recommendations from the International Monetary Fund, has proposed a number of measures it hopes will help boost a regulatory system that proved robust during a global economic crisis driven by poor credit controls. “Government will strengthen market conduct regulation, particularly in retail banking and insurance,” the National Treasury, which will release a comprehensive discussion document in early November, said in a statement.

A 2008 banking enquiry by South Africa’s competition authorities set out a number of recommendations to lower banking charges and improve pricing transparency in a sector criticised for being uncompetitive and dominated by Absa, Standard, Nedbank and FirstRand



Treasury also intends introducing new laws and expand its regulatory scope to over-the-counter derivative trading, hedge funds and credit rating agencies, which currently fall beyond the regulatory framework.
“In line with our international commitments, new legislation will be released to regulate these activities… Improvements in governance in other sectors posing systemic risks like the payment system will also be considered,” the Treasury said.