SOUTH Africa is revamping its processes for placing troubled financial institutions under administration, with the central bank playing a pivotal role.
Under an amendment to financial sector legislation, which was signed into law in January, the South African Reserve Bank assumes overarching authority over failing financial institutions, and has the power to transfer their assets and liabilities, assume control of their management and restructure banks.
In the event of an institution being wound up, the central bank can also apply for its assets to be liquidated.
The new regime “should replace curatorship,” and will enable faster intervention when firms are struggling, Jacques Botes, the central bank’s divisional head for resolution planning, told reporters on Wednesday at the release of its financial stability review.
“There won’t be a situation where the Reserve Bank can take certain resolution actions and if those actions aren’t successful,” businesses are then placed into curatorship, because
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