REUTERS, Pretoria | Tuesday
THE South African Reserve Bank (SARB) could well establish a financial stability unit to boost confidence and transparency in the country’s financial system.
“The purpose of the proposed financial stability unit could be said to be to support the financial stability mission of the SARB and…monitoring the overall stability of the financial system,” Christo Wiese, the SARB’s Registrar of Banks, told a banking sector seminar.
“The aim is to enhance confidence in the financial system, increase South Africa’s attractiveness as a regional financial sentre, attract foreign investments and respond to recent international trends…focusing specifically on overall financial stability,” the statement said.
Wiese said recent financial crises and liquidity pressures experienced by smaller banks last year underscored the need for such a unit.
South Africa’s banking and financial sectors are widely regarded as the cream of the emerging market crop but were hard hit two years ago during a global crisis of confidence in developing economies sparked by the east Asian collapse.
That crisis saw interest rates lifted to decade-high levels and the rand go into a steep slide against the U.S. dollar and other major currencies.