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

    APRA Decides to Standardize Submission Date for Quarterly Reporting

    APRA announced the standardization of quarterly reporting due dates for authorized deposit-taking institutions.

    May 11, 2021 WebPage Regulatory News
    News

    Bundesbank Publishes Supporting Documentation for Reporting by Banks

    Bundesbank published a list of "EntryPoints" that are accepted in its reporting system; the list provides taxonomy version and name of the module against each EntryPoint.

    May 11, 2021 WebPage Regulatory News
    News

    ECB Working Group Publishes Recommendations on EURIBOR Fallbacks

    The private sector working group of ECB on euro risk-free rates published the recommendations to address events that would trigger fallbacks in the Euro Interbank Offered Rate (EURIBOR)-related contracts, along with the €STR-based EURIBOR fallback rates (rates that could be used if a fallback is triggered).

    May 11, 2021 WebPage Regulatory News
    News

    EBA Publishes Phase 1 of Reporting Framework 3.1

    EBA published the phase 1 of its reporting framework 3.1, with the technical package covering the new reporting requirements for investment firms (under the implementing technical standards on investment firms reporting).

    May 10, 2021 WebPage Regulatory News
    News

    APRA to Finalize Capital Adequacy Standard Revisions by January 2022

    Asia Pacific Australia Banking APS 111 Capital Adequacy Regulatory Capital Basel RBNZ APRA

    May 10, 2021 WebPage Regulatory News
    News

    ESMA Issues Guidelines on Outsourcing to Cloud Service Providers

    ESMA published the final guidelines on outsourcing to cloud service providers.

    May 10, 2021 WebPage Regulatory News
    News

    EBA Publishes Data on Deposit Guarantee Schemes

    EBA published annual data for two key concepts and indicators in the Deposit Guarantee Schemes (DGS) Directive—available financial means and covered deposits.

    May 10, 2021 WebPage Regulatory News
    News

    OSFI Sets Out Plan for Future Guidance on Managing Technology Risk

    OSFI has set out the schedule for release of draft guidance on the management of technology risks by federally regulated financial institutions and private pension plans.

    May 10, 2021 WebPage Regulatory News
    News

    MAS Updates Housing Loan Rules, Proposes Corporate Governance Guidance

    MAS updated rules for new housing loans by banks and finance companies.

    May 10, 2021 WebPage Regulatory News
    News

    HKMA Publishes Guideline on Sustainable Finance Grant Scheme

    HKMA published a statement on the 100% Personal Loan Guarantee Scheme and a guideline on the Green and Sustainable Finance Grant Scheme (GSF Grant Scheme) as announced in the 2021-22 Budget.

    May 09, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 6959