Public Service Commission Act, 1997
R 385
Budget Speech 2017South Africa's growth and transformationFinancial sector transformation and regulation |
Since the global financial crisis in 2008, we together with our partners in the G-20, have been on a long journey to make the banking system safer, and prevent the type of economic crisis that systemically important banks can trigger. We responded with a series of substantial, intrusive and intensive regulatory reforms. Cabinet approved the shift to the Twin Peaks regulatory system to make the financial sector safer and serve SA better, introducing the following structural reforms to our regulatory system:
| • | In 2012, the new Financial Markets Act introduced a framework for unlisted derivatives, which caused so much damage in the 2008 global financial crisis. |
| • | In 2013, the Banks Amendment Act brought in requirements for increased capital and better liquidity management. |
| • | In 2013, Government took steps to deal with household over-indebtedness starting with abuses in emolument attachment orders, also known as garnishee orders. |
| • | In 2015, Minister Nene tabled the Financial Sector Regulation Bill to give effect the Twin Peaks system. As soon as this bill is enacted, we will be able to establish a fairly. |
| • | Earlier this year, together with Minister Davies, new restrictions on credit life insurance were implemented, preventing the sale of retrenchment insurance to people without jobs, for example. |
As an employer, National Government has investigated 135,000 emolument orders against state employees and reduced the number of deductions by 49,000. We hope all employers will assist their employees in the same way.
As we have seen recently with the Competition Commission investigation, there is evidence of a collusive culture at trading desks in banks. It is precisely to deal with such abuses that we have proposed a dedicated market conduct regulator, and we hope Parliament will pass this Bill as soon as possible. Collusion must be stamped out whether it is in banking, construction or the bread industry. But banks need tougher rules to cover financial market abuses, and the Reserve Bank and National Treasury have initiated work on a more comprehensive Financial Markets Review under the leadership of former Deputy Governor James Cross, to build on the Review conducted in 2014.
Although progress has been made in transforming the financial sector, more needs to be done to broaden access through more affordable financial services, improve market conduct, ensure employment equity at top management levels, provide procurement opportunities and transform ownership.
We live in an era of rapid technological change. Three new banks have been granted provisional licences, including the PostBank, and two new stock exchanges. Their business models are based on technological innovation with potential to bring services more cost- effectively to more people.
I am pleased to announce that we will work with partners at NEDLAC who have requested that a Financial Sector Summit take place in 2017 to consider transformation in this sector.
