SARB issued directive (D4/2021) to all banks, branches of foreign institutions, controlling companies, eligible institutions, and auditors of banks or controlling companies regarding the requirements and frequency of conducting externally facilitated liquidity stress simulations. A liquidity simulation focuses not only on the solvency of an individual bank but also on the collective behavior of institutions in response to a shock, with the aim to minimize systemic risk. SARB also proposed requirements for designated institutions to estimate, assess, and develop ex-ante funding arrangements to finance their liquidity needs and preserve the critical functions in a resolution; this consultation, which closes on May 03, 2021, also sets out arrangements to be put in place by SARB as a participant in the financial safety net.
In yet another development, SARB published the revised the Code of Conduct and Operating Rules (Code) for Johannesburg Interbank Average Rate (JIBAR). The revisions came into effect on April 12, 2021. The reform agenda includes, among other things, strengthening the JIBAR governance framework as an interim measure while an alternative reference rate is being developed. The revisions made to the Code pertain to increase in pricing commitments of contributing banks, inclusion of operating rules regarding adjustment of pricing commitments in the event of abnormal market conditions, and incorporation of obligations of publishing agent of JIBAR reference rate data. As a further step to enhance the credibility of JIBAR, SARB will implement a post-trade disclosure framework for all JIBAR-linked money market transactions. It is envisaged that this framework will include the publication of post-trade primary and secondary transaction data as well as information pertaining to redemption profiles of bank negotiable certificates of deposit and floating-rate notes. The effective date of this disclosure framework will be announced at a later date.
- Directive on Liquidity Stress Simulations
- Notification on Proposal for Funding in Resolution
- Proposal for Funding in Resolution (PDF)
- Press Release on Revised Code for JIBAR (PDF)
- Code and Operating Rules for JIBAR (PDF)
Comment Due Date: May 03, 2021 (Liquidity Directive)
Effective Date: April 12, 2021 (JIBAR code)
Keywords: Middle East and Africa, South Africa, Banking, Securities, Stress Testing, Systemic Risk, Resolution Framework, Interest Rate Benchmark, JIBAR, Liquidity Risk, D-SIBs, Benchmark Reforms, SARB
Previous ArticlePRA Finalizes Supervisory Approach for Non-Systemic Banks in UK
The European Commission (EC) published the Delegated Regulation 2022/786 with regard to the liquidity coverage requirements for credit institutions under the Capital Requirements Regulation (CRR).
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying the criteria to identify shadow banking entities for the purposes of reporting large exposures.
The European Insurance and Occupational Pensions Authority (EIOPA) published a report assessing insurers' exposure to physical climate change risks
The European Commission (EC) published the results of a public consultation, held in October 2021, on the review of the Web Accessibility Directive.
The Network for Greening the Financial System (NGFS) published two reports to aid central banks and regulators in their oversight of the financial sector and in their central bank operations
The Monetary Authority of Singapore (MAS) and the SC-STS are jointly consulting, until June 10, 2022, on setting adjustment spreads for the conversion of legacy SOR contracts to SORA reference rate.
The Office of the Superintendent of Financial Institutions (OSFI) published the strategic plan for 2022-2025 and the departmental plan for 2022-23.
The European Banking Authority (EBA) is consulting, until August 31, 2022, on the draft implementing technical standards specifying requirements for the information that sellers of non-performing loans (NPLs) shall provide to prospective buyers.
The European Council and the Parliament reached an agreement on the revised Directive on security of network and information systems (NIS2 Directive).
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying information that crowdfunding service providers shall provide to investors on the calculation of credit scores and prices of crowdfunding offers.