STUART THEOBALD: Global banking crisis unlikely to affect SA

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STUART THEOBALD: Global banking crisis unlikely to affect SA
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The Reserve Bank’s stress testing of interest rate risk is stringent and universal

There is a global banking crisis under way the likes of which we have not seen since the global financial crisis. Could it affect SA’s banks? In a word, “no”.

The issues plaguing US banks and Credit Suisse in Europe are unique. The US mid-tier banking system crisis is reminiscent of the small banks crisis in SA that raged in the early 2000s. There are two principle causes of the US crisis: an outdated accounting treatment for those banks’ portfolios of government bonds, and an astoundingly light-touch regulatory approach that exempted banks with less than $250bn in assets from the stress tests that would have revealed the problems.

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