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Financial Regulation

Financial Regulation and Supervision in Zimbabwe: An Evaluation of Adequacy and Options

  • File Details
  • Size: 25MB
  • Creator / Author: Joan Addedis
  • Resource Type: Africa Capacity Report
  • # Download: 254
  • Access: Open to Download

Basic Information
Creator / Author
Nhavira, John D. G., Mudzonga, Evengelista, Mugocha, Everisto
Source / Publisher
Zimbabwe Economic Policy Analysis and Research Unit (ZEPARU)
Resource Type
Geographic & Audience Details
Classification & Domains
Subject
Financial Development
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Abstract

The purpose of this working paper is to critically review the financial regulation and its supervisory architecture in Zimbabwe and settle the question of whether it is still relevant and appropriate for Zimbabwe. In this regard the study is focused on systemic, prudential and market conduct regulation. Regulation refers to the rules that govern the conduct of intermediaries, whilst supervision is the monitoring aspect undertaken by one or more public authorities in order to ensure compliance with regulations. In Zimbabwe there are five principal agencies charged with the responsibility of financial regulation and supervision. These are the Reserve Bank of Zimbabwe (RBZ), The Ministry of Finance, The Deposit Protection Corporation, The Securities Exchange Commission (SEC) and The Insurance and Pensions Commission. Regulation is necessary to ensure consumers confidence in the financial industry. There are three main reasons for financial system regulation: (i) to ensure system stability i.e. the safety and soundness of the financial system; (ii) to provide smaller (individuals), retail clients with protection. Caveat emptor does not apply to financial contracts due to their complex and opaque nature, and; (iii) to protect consumers against monopolistic exploitation. The deregulation of the financial sector and emergence of new financial instruments and services offered by financial institutions has blurred boundaries between different types of financial institutions such as banking, insurance and securities.
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Keywords

Financial Regulation, Financial Supervision, Banks and Banking
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