Cape Town – South Africa has taken a significant stride in financial regulation with the launch of the Corporation for Deposit Insurance (CODI), as stated by Finance Minister Enoch Godongwana.
CODI, the Deposit Insurance Scheme (DIS), safeguards bank depositors by providing up to R100,000 protection in the event of bank failure.
Godongwana said that CODI advances the Twin Peaks model, enhancing financial safety and consumer protection by dividing regulatory responsibilities into two focused areas.
He said the corporation will advance the Twin Peaks model.
“The establishment of CODI underpins the consumer protection pillar, securing depositors by guaranteeing access to up to R100 000 of their deposits in case of a bank failure – an essential safety net in our rapidly evolving financial landscape and advancing the Twin Peaks model,” the minister said on Thursday while addressing the CODI launch in Johannesburg.
[In Pictures] South African Reserve Bank Governor @KganyagoLesetja and Finance Minister Enoch Godongwana launched South Africa’s deposit insurance scheme, the Corporation for Deposit Insurance (CODI). #CODI is a subsidiary of the SARB and part of the country’s financial sector… pic.twitter.com/JPvF4FEnvY
— SA Reserve Bank (@SAReserveBank) April 26, 2024
Godongwana added: “The Twin Peaks model revolutionises financial safety and consumer protection by splitting regulatory duties into two focused areas. One ensures financial institutions are robust and secure, and the other safeguards consumer interests.
“This model not only enhances the system’s stability but also bolsters consumer confidence by offering clearer oversight and reducing financial crisis risks.”
This model, introduced in 2011 after the global financial crisis, features the Financial Sector Conduct Authority and the Prudential Authority, bolstering oversight and stability.
Godongwana highlighted the importance of the Conduct of Financial Institutions (COFI) Bill in solidifying this framework, aiming to prevent crises and build trust in financial regulation through proactive measures and public engagement.
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Compiled by Betha Madhomu
