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TWIN PEAKS: A THEORETICAL ANALYSIS
1
Advocate of the High Court of South Africa,
Senior Research Associate in the School of Law, University of Melbourne,
Visiting Researcher, Oliver Schreiner School of Law, University of the
Witwatersrand, Johannesburg and
Principal: Clarity Prudential Regulatory Consulting Pty Ltd.
This paper provides a theoretical analysis of the twin peaks method of financial system
regulation, with particular reference to the Australian iteration of the model. This includes a
description of how twin peaks functions, its historical development, and its strengths and
weaknesses. An analysis is also provided of an important bifurcation in the Australian model,
as it as has been emulated elsewhere in the world, namely the jurisdictional location of the
bank regulator.
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have identified many billions of dollars of fraudulent loans originated by Countrywide
that were sold fraudulently to Fannie and Freddie through false representations and
warranties. … 97% of the Countrywide loans reviewed by Ambac … had false reps and
warranties. Countrywide also engaged in widespread foreclosure fraud. … examined by
a truly independent body has found widespread fraud — in loan origination, loan sales,
appraisals, and foreclosures. … one financially sophisticated entity after another found
21'('*'(5Financial Sector Regulation Bill, Comments Received on the
First Draft Bill Published by National Treasury for Comments in December 2013 (Comment Period from 13
December 2013 - 07 March 2014)5('$2'*$$+;%/&'
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widespread fraud by Countrywide in the entire gamut of its operations, the
administration, the industry … Countrywide made hundreds of thousands of fraudulent
loans … It fraudulently foreclosed on large numbers of loans. It victimized hundreds of
thousands of people and hundreds of financial institutions, causing hundreds of billions
of dollars of losses. It has defrauded more people, at a greater cost, than any entity in
history ... The financial media treats Bank of America as if it were a legitimate bank
rather than a “vector” spreading the mortgage fraud epidemic throughout much of the
Western world.28
(e) Separate but equal
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