SA is preparing the ground to migrate to a new way of regulating its banks and financial markets. Known as the Twin Peaks model, the decision has sparked debate, even controversy. So what is Twin Peaks? And what’s all the fuss about? The name Twin Peaks was adopted in 1995 by Michael Taylor, who at the time was an official with the Bank of England. The name was a riff on the popular US mystery horror television mini-series created by David Lynch. In a seminal paper published that year, Taylor set about unpacking the failings of the way banks and the financial markets were regulated in the UK. Regulation was based on a sectoral model — that is on the assumption that banks should be regulated separately from other kinds of financial institutions such as insurers. This model was used in most countries in the world at the time. It was applied in SA until April 1 2018. Twenty-three years ago Taylor argued that the sectoral model was no longer fit for purpose. It was an anachronism. A thr...

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