Reserve Bank Governor Lesetja Kganyago Says SA’s Financial System Remains Resilient Despite COVID-19

INSIDE POLITCS REPORTER

THE South African financial system remains resilient despite the impact of the lockdown caused by the COVID-19 pandemic, South African Reserve Bank Governor Lesetja Kganyago said during a webinar of the launch of the bank’s semi-annual Financial Stability Review (FSR).

“The banks are stronger and more resilient than they were in 2008 as their liquidity and solvency ratios are better than they were then,” Kganyago said in reference to the 2008 Global Financial Crisis, which triggered the great recession.

Over the past decade, financial regulation has been enhanced, which has meant that banks have significant buffers in place to absorb shocks. For example, the total capital adequacy ratio (CAR) of the banking sector has increased by more than a third since 2008. In the period since, South Africa has since adopted the Basel III regulatory framework.

The regulations are also enhanced by regular stress tests that check