The banking supervision function in the Reserve Bank has caused many problems and frustrations, and the temptation to pass the responsibility on to another agency is great. However, the capacity to perform effective banking supervision is crucial to price and financial stability.
After careful consideration of the issue, I am therefore convinced that it is in the best interests of the South African economy that banking supervision should remain in the Bank. At the same time, I also realise that close co-operation should exist between the different regulatory authorities to address the need for consolidated supervision.