a consumer protection point of view, including through remuneration arrangements. failure to manage conduct risks can expose a financial institution to a variety of other risks which, if not managed properly, can threaten its solvency and sustainability. the regulatory regime for market conduct therefore provides a framework for the identification and management of conduct risk as a complementary framework to prudential regulation. this is part of the motivation for rigorous coordination and cooperation arrangements between the pa and the fsca envisaged by the financial sector regulation bill aimed at ensuring that all risks are holistically managed within an overarching financial stability policy framework. strengthening conduct in wholesale otc markets another initiative has been the development of a code of conduct for south african wholesale over - the - counter ( otc ) financial markets in a collaborative effort between regulators and key market participants. i will return to this aspect later. against the background of various investigations undertaken in many foreign jurisdictions in relation to foreign exchange market manipulation, the sarb and the fsb launched a review bis central bankers ’ speeches of the foreign exchange trading operations of south african authorised dealers in october 2014. as the rand is a globally traded currency, the aim of the review was to establish whether there may have been any spillover into our markets in relation to any misconduct or malpractice. it is important to note that, unlike in other jurisdictions, the south african review was not informed by whistle - blowing or any allegations – or indeed concrete evidence – of any misconduct. we had no evidence of widespread malpractice in the south african foreign exchange market but felt that, given the broad - based nature of investigations in other jurisdictions ( which also involved trading in emerging market currencies ), it would be prudent to obtain comfort that our foreign exchange trading practices were in line with best practice. it was therefore a proactive step on the part of south african regulators. the foreign exchange review committee established for this purpose – chaired by former senior deputy governor james cross, who is with us today – released its report in october 2015. the committee reported that it had found no evidence of manipulation or serious misconduct in the domestic foreign exchange market during the period covered by the review, but that there was scope for improvement in relation to governance and conduct. the committee also recommended that legislation be enhanced to give market conduct regulators wider powers to strengthen enforcement. south african regulators are in conversation with each other on how best to give effect to the implementation of the recommendations. there was also the recommendation

daniel mminele : conduct and culture in the banking and financial sectors opening address by mr daniel mminele, deputy governor of the south african reserve bank, at the g - 30 forum on banking conduct and culture, pretoria, 18 february 2016. * * * governor kganyago ( sarb ), governor sithole ( central bank of swaziland ), deputy governor mlambo ( reserve bank of zimbabwe ), deputy governors, groepe and naidoo ( sarb ), second deputy governor sullivan ( central bank of seychelles ), sir david walker ( vice chair of the group of thirty steering committee ), dr stuart mackintosh ( executive director of the g30 ), ms maria ramos ( chief executive officer of barclays africa ), the leadership of banks and other financial institutions, panel members, and esteemed delegates. it is a privilege and an honour for me to welcome you, on behalf of south african reserve bank ( sarb ), to this forum on banking conduct and culture, which we are co - hosting with the g30 and barclays africa. the g - 30 has, over the years, played a significant role in bringing together members of the banking, financial and regulatory community to discuss issues of common concern and examine the choices available to market practitioners and policymakers. given the enormous trust deficit that has built up since the global financial crisis, the topic of conduct and culture is of great importance and highly relevant to the global banking and financial sector. bankers have always had a delicate relationship with the societies they serve. it would appear that, at any point in time, it is almost a national sport across the globe to take a swipe at bankers. mark twain famously said : “ a banker is a fellow who lends you his umbrella when the sun is shining and wants it back the minute it begins to rain. ” and j m keynes asked : “ how long will it take to pay city men so entirely out of proportion to what other servants of society commonly received for performing social services not less useful or difficult? ” we would be terribly misguided to treat the current wave of discontent and deep mistrust as just another wave that will eventually subside. the most recent global financial crisis, from which almost nine years later we are still struggling to recover, shook the very foundations of our financial system and almost caused its total meltdown. in a nutshell, the crisis was about failures in conduct, culture, and supervisory practices. the consequences