Featured Product

    SARB Consults on Its Intended Approach to Bank Resolution

    July 23, 2019

    SARB published a discussion paper that sets out its intended approach to planning for, and conducting, an open-bank resolution. The discussion paper provides an overview of how the SARB intends to perform its functions as the resolution authority and sets out certain requirements that may be imposed on designated institutions after the promulgation of the Financial Sector Laws Amendment Bill, 2018 (FSLAB). SARB and designated institutions will have to develop clearly defined strategies and take preemptive measures to make the legal provisions in the FSLAB effective and to make the orderly resolution of large and complex financial institutions feasible. The closing date for comments is August 31, 2019 and the comments received will inform the process to develop the resolution planning standard, which is to be issued once the FSLAB is promulgated.

    The paper first provides an overview of the elements of the resolution framework that will be introduced by the FSLAB, and how the powers assigned to the SARB may be applied in practice. The paper then sets out the key elements of planning for an open-bank resolution strategy, which will most likely be followed in the unlikely event of the failure of a bank that has been designated as a systemically important financial institution in terms of the Financial Sector Regulation Act, 9 of 2017 (FSRA). This also includes an overview of the requirements that designated institutions may have to meet. Finally, the paper describes the process that will most likely be followed leading up to, and during, a resolution.

    The FSLAB contains proposed amendments to the FSRA, including the addition of a chapter with provisions for the orderly resolution of designated institutions, which will include all banks as well as non-bank systemically important financial institutions and their holding companies. The FSLAB also contains a chapter that will introduce an explicit deposit insurance scheme to provide protection to covered depositors in the event of a bank failure. The FSLAB amends a number of other acts that are required to make the resolution framework effective. The views expressed in the paper are based on the assumption that the FSLAB will be passed by Parliament in its current form. To the extent that amendments are made to the FSLAB, SARB will, where necessary, update the approach set out in the paper. This discussion paper should be seen as a first iteration, likely to be revised and expanded in future as experience is gained by both the SARB and the designated institutions and as the focus expands to all designated institutions. The intention is also to publish more detailed guidance on certain aspects of resolution planning in future, as the work progresses.


    Related Link: Discussion Paper

    Comment Due Date: August 31, 2019

    Keywords: Middle East and Africa, South Africa, Banking, Resolution Planning, Resolution Framework, Open-Bank Resolution, SIFI, Too Big to Fail, Systemic Risk, SARB

    Featured Experts
    Related Articles
    News

    BoE Consults on Approach to Setting MREL, Publishes Bail-In Guidance

    The Bank of England (BoE) published a consultation paper on approach to setting minimum requirement for own funds and eligible liabilities (MREL), an operational guide on executing bail-in, and a statement from the Deputy Governor Dave Ramsden.

    July 22, 2021 WebPage Regulatory News
    News

    EBA Seeks Views on Proportionality Assessment Methodology

    The European Banking Authority (EBA) is seeking preliminary input on standardization of the proportionality assessment methodology for credit institutions and investment firms.

    July 22, 2021 WebPage Regulatory News
    News

    US Agencies Propose Changes to Call Reports and Instructions

    Certain regulatory authorities in the US are extending period for completion of the review of certain residential mortgage provisions and for publication of notice disclosing the determination of this review until December 20, 2021.

    July 22, 2021 WebPage Regulatory News
    News

    PRA Finalizes Rulebook Definition of Higher Paid Material Risk-Taker

    The Prudential Regulation Authority (PRA) published the policy statement PS18/21, which introduces an amendment in the definition of "higher paid material risk taker" in the Remuneration Part of the PRA Rulebook.

    July 21, 2021 WebPage Regulatory News
    News

    EBA Examines Asset Encumbrance in Banking Sector

    The European Banking Authority (EBA) published its annual report on asset encumbrance in banking sector.

    July 21, 2021 WebPage Regulatory News
    News

    EBA Publishes Methodological Guide to Mystery Shopping

    The European Banking Authority (EBA) published a methodological guide to mystery shopping.

    July 21, 2021 WebPage Regulatory News
    News

    APRA Issues Update on Capital Reform Policy Settings for Banks

    The Australian Prudential Regulation Authority (APRA) released a letter to authorized deposit-taking institutions to provide an update on key policy settings for the capital framework reforms, which will come into effect from January 01, 2023.

    July 21, 2021 WebPage Regulatory News
    News

    CPMI-IOSCO Assess Continuity Planning of Market Infrastructures

    The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) published a report that assesses the business continuity planning activities of financial market infrastructures or FMIs.

    July 21, 2021 WebPage Regulatory News
    News

    BoE Announces Changes to Validation Rules for Form BTL

    The Bank of England (BoE) published questions and answers (Q&A) on OSCA to BEEDS migration for statistical reporting as well a presentation from the project overview session held with statistical reporters.

    July 20, 2021 WebPage Regulatory News
    News

    BCBS Proposes Changes to Process for Reviewing G-SIB Methodology

    The Basel Committee on Banking Supervision (BCBS) is consulting on a technical amendment to the Basel Framework to reflect a new process reviewing the global systemically important bank (G-SIB) assessment methodology.

    July 20, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7281