South African Reserve Bank announces "macroprudential" policy

Apr 30, 2010

South Africa's Reserve Bank has outlined a new policy that will help protect the country from another financial crisis.

In its latest Financial Stability Review, the central bank, which was formed in 1921, said its exposure to the global economic downturn has been relatively limited. However, it also announced a new "macroprudential" policy that will fall in line with worldwide efforts to improve the banking sector.

It will "smooth out the impact of the economic cycle on the financial system", the body said in a statement. Head of the Financial Stability Department Andre Bezuidenhout said details of the proposals are still being finalised, but added it is unlikely South African banks will have any difficulty complying with the changes.

The only exception to this could be alterations to liquidity rules, Bloomberg reported him as saying. Mr Bezuidenhout added the bank is also conducing studies in order to assess the potential impact the changes will have on the banking sector in the country.