Die problematiek rondom die regulering van banke

English: The important role of banks in the economy necessitates their regulation. The functions exercised by banks put them at risk of failure. The regulators of banks have to decide to pursue either the stability of the financial system or the efficiency of the financial system. The regulator can pursue more stability by actively regulating the banks in the financial system. The problem is that this has certain cost implications for the economy and the taxpayers. The proponents of free banking promote the regulation of banks by the market forces of supply and demand. The government or central bank should try to attain stability in the financial system, without compromising the stability of the financial system. Despite the fact that the majority of countries have actively regulated banks many countries have experienced systemic bank crises. These bank crises have been caused mainly by macro economic, micro economic and endemic factors. Since 1991 the regulators showed a preference to rateher use prompt corrective action than regulatory forbearance as solution to bank crises. In spite of the fact that banks are obliged according to the Basel Accord of 1988 to keep a minimum level of risk-based capital, the recent developments in the international financial markets have necessitated the Basel Committee for Banking Supervision to make new proposals for the regulation of the capital adequacy levels of banks. The aim of the Basel II proposals is to make the regulation of banks more market orientated. The new proposals mutually support the alignment of the regulation of the capital adequacy of banks with the risk management practices at banks. The proposals consist of three sections are sections which comprises the regulation of capital adequacy, regulatory review and disclosure of information. In terms of the first part of the Basel II proposals the capital adequacy of banks can be determined via the standardized approach or the Internal Rating-based approach. The problems of pro-cyclicality and the geographical spread of ratings will hamper the implementation of the standardized approach. The Internal Rating-based approach has been critized for the possible high cost of implementation. The data requirements, negative incentive effects and the problem of regulatory arbitrage have been identified as possible problem. One way of solving the problems of negative incentive effects for banks is to prescribe a minimum level of subordinated debt to be held by all banks. The holders of subordinated debt have an incentive to monitor the banks, due to the fact that they are last in the line of creditors in the case of insolvency. The implementation of an integrated supervisor in South Africa was then also investigated. The proposal was made to implement the Twin Peaks model. Under this approach bank supervision will still be a function of the South African Reserve Bank. The findings of the study were then tested by means of a questionnaire that was administered at all the major banking groups in South Africa. The respondents supported the findings of the study.