Cape Town - Not one single shareholder has any influence on monetary policy or the South African Reserve Bank's (Sarb) mandate, said Ismail Momoniat, deputy director general of tax and financial sector policy at National Treasury.
Momoniat was part of a delegation that listened to public hearings on the financial sector regulation bill that currently serves before parliament.
His comments came after Cosatu and a group of civil society organisations under the Financial Sector Campaign Coalition (FSCC) called for the nationalisation of and stricter control over the Sarb.
In his response to their respective submissions, Momoniat took the two organisations to task for making “vague statements” suggesting that shareholders have undue influence over the Reserve Bank.
“The Constitution outlines what the Reserve Bank does and in whose interest it acts,” said Momoniat. “We can say with all the confidence in the world that no shareholder has any influence on the bank. The shareholders are only involved as a prudential regulator.”
Although the financial sector regulation bill doesn’t extend to the Sarb, Cosatu said in its submission it had to raise the issue as it “doesn’t often get the chance to do so”.
“Cosatu strongly believes that the Sarb belongs to the nation and is charged with protecting its financial stability. It thus needs to belong to the public and not its shareholders. It is long overdue that it simply be nationalised by government.”
The bill, also called the twin peaks bill, was tabled last year and will eventually pave the way for the financial services sector to be regulated by two centres of power, namely the Sarb and a newly established Financial Sector Conduct Authority.
A similar “twin peaks” regulatory regime has been established in the UK. Lawmakers hope that the new legislation will help to harmonise South Africa’s fragmented financial services regulation.