|**South Africa**<br>**(2011)**|Sustainable and inclusive economic growth and development will be aided by improving access<br>to financial services for the poor, vulnerable and those in rural communities. [...] These<br>priorities, however, interact with one another, often generating difficult decisions for the<br>policymaker. In particular, there are multiple trade-offs and competing objectives which must be<br>balanced. [...] While unrestrained credit growth might appear desirable (for example, to allow<br>broader access to housing), the financial crisis demonstrated that excessive household lending<br>creates financial stability risks, with disastrous economic consequences. A careful balance needs<br>to be struck between these competing objectives. [...] Arguably, a highly profitable and<br>concentrated financial services sector is a stable one but, often, profits might be considered<br>excessive and due to unreasonably high fees. Again, a balance is required.|
|---|---|
|**Switzerland**<br>**(2009)**|These four objectives of financial market policy are, to a certain extent, both interdependent and<br>conflicting. Thus, measures taken to attain one objective may affect the attainment of another<br>either positively (harmony of objectives) or negatively (conflict of objectives) or may have no<br>impact whatsoever on it (neutrality of objectives). For example, extremely competitive business<br>conditions allow for not only a broad range of high-quality services for companies and<br>consumers but also create employment in the financial sector. On the other hand, overly<br>restrictive regulation in an effort to prevent systemic or reputational risks may jeopardize jobs<br>and value creation in the financial sector and result in an inadequate offering of high-quality,<br>reasonably priced financial services for the business sector. [...]Effective and efficient financial<br>market regulation, together with effective supervision, creates competitive advantages for the<br>financial centre. Formulating a legislative framework that allows for competitiveness is,<br>however, something of a balancing act, resulting from various trade-offs and the search for<br>equilibrium between different interests. Adverse economic repercussions of market failures<br>should be minimized through appropriate financial market regulation. This should safeguard the<br>profitable functioning of the financial sector and the allocative efficiency of the economy as a<br>whole. [...] As a basic principle in the creation of regulation, the overall economic benefit of a<br>regulatory measure should be greater than the associated overall economic costs. The need for<br>regulation must be clarified in detail in advance and the impact of individual courses of action<br>determined. Such research should determine whether regulation is necessary at all and, if so,<br>which legal form [...] is best suited.|

_Source:_ Authors’ review of selected national financial sector strategies.

Overall, the findings of Laftey et al. (2012) that conventional strategic planning is not actually strategic will resonate with our assessment in relation to the drafting of strategies. They find that, although the process of preparing a strategy involves a lot of scientific analysis of data, it lacks the creation of novel hypotheses and careful generation of custom-tailored tests of those hypotheses. They stress that conventional strategies are focused on isolated _issues_ rather than on making _choices_ , an approach that would naturally lead to a discussion of trade-offs. Generally, the approach to formulating a financial sector strategy does not naturally lend itself to the formulation of choices but rather to the aggregation of issues into an all-inclusive reform program. Typically, the process starts with sequencing reforms that incorporate a country’s specific national priorities, such as existing national development plans, subsector development strategies, or other donor assistance strategies, as well as setting out new priorities for financial sector development. Once the recommendations are prioritized and discussed with the authorities, expert consultants conduct additional analytical work as necessary and then work directly with national steering committees, subcommittees, and other stakeholders to prepare a cohesive, comprehensive sector development strategy. For the strategy to be concrete and implementable, it must

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