success and credibility of these efforts, which have resulted in near - term risks to global financial markets at least subsiding somewhat, is critically dependent on timeous activation and effective implementation. but, let me not divert too much and turn to the topic i have been asked to speak on, namely, the importance of inter - regulatory harmonisation in the financial markets including cooperation at the industry level. 2. the importance of cooperation and collaboration the global financial crisis has brought to the fore and encouraged an environment of increased cooperation and coordination among regulatory authorities, with the view of preventing or at least minimising the impact of possible market disruptions arising out of financial crises. in the wake of the global financial crisis, the international community embarked on various initiatives aimed at improving the regulation of the financial sector, and by so doing, creating an environment that fosters financial stability, in support of growth and development. in addition, a number of changes are also envisaged in the areas of market bis central bankers ’ speeches conduct, consumer protection and financial inclusion. south africa participates in various international fora ( such as the g20, the basel committee for banking supervision, the financial stability board ) and standard setting bodies where these initiatives are being undertaken, and thereby contributes towards building a safer and more efficient global financial system. the g20 in particular has been at forefront of international efforts to harmonise regulation. g20 leaders have endorsed the broadening of the regulatory net to all markets, institutions, and infrastructures that are systemic ( like hedge funds, credit rating agencies, otc derivatives, and the catch - all phrase of “ shadow banking ” ), thereby encouraging agreed international standards in this regard to be translated into domestic environments. while south africa ’ s financial sector may have come through the crisis relatively unscathed, we are part of the global community and are also undertaking various regulatory reforms to ensure that our financial sector is further strengthened. to this end, in early 2011, the national treasury published a document entitled “ a safer financial sector to serve south africa better ”, which is the guiding document in migrating south africa towards a twin - peak approach to financial regulation, addressing both prudential regulation and market conduct. collaborative engagements are underway among various south african regulators and stakeholders to ensure the successful implementation of these regulatory reforms in the near future. a safe and effective financial system supports the regulators ’ objective of ensuring financial stability. systemic and prominent market participants and infrastructures ( such as the national payments system, which

saa simulation exercise. the purpose of this exercise is to re - engineer the full value chain of the saa through a simulated but abbreviated saa process to ensure that the process itself is appropriately structured and meets the right governance standards. this value chain page 10 of 13 starts with the formulation of the investment policy and runs through a review of market identification, asset optimisation, the expression of risk appetite in investment guidelines, and the ultimate roll - out of the portfolios. among other things, the simulation aims to ensure that each subcomponent of the greater saa exercise is owned, that timelines are accurate and effective, and that each procedure is well documented by owners in a complete and up - to - date procedure manual. in doing this, we hope to create a separate environment and process where we can focus solely on the saa process itself, removed from the overarching deadlines which are present in real - life saas. in this way, we aim to create a more robust operational framework for future saas. governance as i approach the end of my speech, i would like to take a moment to discuss the role of governance. not only do reserve managers have to contend with the challenges and complexities of managing foreign exchange reserves efficiently ; it is also imperative that we do so with an appropriate level of transparency and with accountability. sound governance structures go a long way to ensuring that we meet these high standards. the governor briefly touched on this in his opening remarks yesterday. the governance structure surrounding foreign exchange reserves management at the sarb is separated at different levels. at the highest level, the governors ’ executive committee ( gec ), which is responsible for overall risk tolerance at the sarb, approves the investment policy, the financial risk management policy and saa. the risk management committee plays another vital role in the sarb ’ s governance structure. the committee, which reports to the gec, oversees the risk management process in the sarb and reviews the financial risk management policy to ensure its relevance to current business activities. furthermore, the risk and ethics committee of the sarb ’ s board of directors also reviews the status of risk management in the sarb as well as the effectiveness of risk management activities, key risks, and the mitigating measures to address them. page 11 of 13 certain elements of the risk oversight role, however, are delegated to the reserves management committee ( resmanco ), which is chaired at deputy governor level. res