Page 164 - SARB: 100-Year Journey

Parliament and the SARB
The national legislature became a strategic and powerful means towards greater transparency and public account- ability on the part of the SARB. These are two essential components that give the central bank credibility. Collectively, these – transparency and accountability, and essentially credibility – are the pillars that sustain the SARB’s independence in deploying monetary policy instruments and fulfilling its mandate without fear or favour.
Between 1999 and 2004, Barbara Hogan was the Chairperson of Parliament’s Portfolio Committee on Finance, to which the SARB accounts about the central bank’s operations and policy decisions.
Mboweni and Marcus, then Governor and Deputy Governor respectively, made a formidable pairing and helped stimulate policy debates within Parliament’s finance committee.
Said Hogan: “When Gill and Tito came, a lot of debates emerged. That was primarily related to the supervisory role, bank supervision. We did a huge amount of work, and we were encouraged by Gill and Tito.”
The work included investigating new, emerging models of bank supervision, “where the bank supervisor separates from the central bank – as [with] the financial services authority in the UK. We put energy [into] ... understanding bank supervision and where it should ideally be placed,” Hogan said.
“I am pleased that we went slowly on that. As time would tell, in 2008, the regulation of banks in South Africa was of such a high standard that our banking system, unlike everywhere else, was not that deeply impacted,” added Hogan.
Ian Plenderleith, who had a brief stint as a Deputy Governor at the SARB between 2002 and 2005, said: “Bank supervision was the responsibility of ... Gill Marcus. She took the lead on that, and it was already well established and managed. She made it a rigorous and professional operation. We were supportive of what she was doing, and I thought it was well run. Of course, the benefit was felt a few years later when the great financial crisis swept around the world and South Africa suffered little damage due to how well regulated our financial systems were.”
During her time as a Member of Parliament, Hogan also chaired the Portfolio Committee on Finance between 1999 and 2004. /Gallo Images
The debate about which model of financial sector regulation was best suited for South Africa gathered momentum in the years that followed, and culminated in the Red Book – the precursor to the Financial Sector Regulation Bill. The Bill was adopted as an Act of Parliament and assented to by the President in 2017. The Financial Sector Regulation Act 9 of 2017 (FSR Act) established the Twin Peaks – the Prudential Authority and the Financial Sector Conduct Authority. The FSR Act represents a joint policy effort by the SARB and the National Treasury. Furthermore, the FSR Act formally allocates the financial stability mandate to the SARB, in addition to its constitutionally defined mandate of price stability.
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