François Groepe: The South African Reserve Bank's assessment of systemic risk in the domestic financial system

Introductory remarks by Mr François Groepe, Deputy Governor of the South African Reserve Bank, at the Financial Stability Forum and release of the first edition of the Financial Stability Review for 2018, South African Reserve Bank, Pretoria, 25 April 2018.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Members of the press, guests and colleagues, ladies and gentlemen.

Welcome to the release of the first edition of the Financial Stability Review (FSR) for 2018. The FSR has been published twice a year since 2004. Through this publication, the South African Reserve Bank (SARB) communicates its assessment of systemic risk in the domestic financial system.

Your presence at this Financial Stability Forum is appreciated, as the forum intends to encourage informed debate on, and therefore to enhance the understanding of, the complex and challenging matters related to financial stability. Consensus is growing globally that regulatory frameworks should focus more on mitigating the risks to the financial system as a whole, as significant risks can build up and threaten the stability of the financial system while individual financial institutions seem stable and sound. In pursuing this goal, the Financial Sector Regulation Act 9 of 2017 (FSR Act) confers on the SARB an explicit statutory mandate to protect and enhance financial stability.

The SARB and National Treasury have consequently developed new legislation that will facilitate the orderly resolution of systemically important financial institutions that are failing, which is an important pillar of the SARB's expanded mandate. This legislation will be effected through amendments to the FSR Act. A key component of the resolution framework is the establishment of an explicit deposit insurance scheme for banks in order to protect depositors from losses in the event of a bank failure.