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Letter: Towards a fiscal cliff

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FM Edition:

Over two pages of your magazine the Financial Services Board (FSB) claims nauseatingly and repetitively throughout their article (Corporate Report, August 25-31) that the following seven ill-defined miracles will be achieved by their new Financial Sector Regulation legislation, better known as the "Twin Peaks" Bill:

* Improved access to financial services and products by the poor;

* Improved "inclusiveness";

* Improved consumer education and protection;

* Improved customer "outcomes";

* Improved fairness in treating customers;

* Improved industry innovation and growth; and

* Elimination of "unnecessary" barriers to entry.

Not one word is offered about why current legislation does not permit precisely the same extraordinary achievements.

Indeed, every one of these marvellous aims was previously claimed for existing legislation when it, too, was introduced. Moreover, the Retail Distribution Review and Treating Customers Fairly regimes are already in place and not in the least bit inhibited by current legislation.

Why, merely by dropping responsibility for solvency issues, will the FSB wondrously become so transformed as to be able to perform these miracles?

The reality is that under current legislation they have more than enough power to achieve these aims to the full extent that they are achievable. They know it and therefore avoid the above question.

"Twin Peaks" is little less than a huge power grab, creating a state within the state. Destroying the FSB as an independent quango, putting it directly under the control of certain treasury bureaucrats, and removing it from parliamentary oversight is what this is all about — nothing more.

Why not admit it and be done with it? The FSB could then save thousands of rand with which to pay even greater executive salaries, by stopping their expenditure on all the PR and advertising they have been doing to promote this squalid bit of subterfuge.

Garth Zietsman,
Sun Valley, Cape Town