Bulletin: South Africa's Bank Resolution Framework Will Reduce Systemic Risk

JOHANNESBURG (S&P Global Ratings) March 11, 2025--S&P Global Ratings today said that it will consider the South Africa resolution framework as effective under its financial institutions methodology, once the prudential standards for loss-absorbing capacity become effective in January 2026. South Africa will join the U.S., Canada, Hong Kong, and most European jurisdictions in having this designation. This development follows the country's decade-long progress in amending and adopting legislation and setting up institutions that allow and support open-bank resolution of domestic systemically important banks (DSIBs) in stress scenarios. The South Africa Reserve Bank (SARB) designated six financial institutions as DSIBs: Absa Bank Ltd., Capitec Bank Ltd., FirstRand Bank, Investec, Nedbank, and Standard Bank of South Africa. The resolution powers include general

...JOHANNESBURG (S&P Global Ratings) March 11, 2025--S&P Global Ratings today said that it will consider the South Africa resolution framework as effective under its financial institutions methodology, once the prudential standards for loss-absorbing capacity become effective in January 2026. South Africa will join the U.S., Canada, Hong Kong, and most European jurisdictions in having this designation. This development follows the country's decade-long progress in amending and adopting legislation and setting up institutions that allow and support open-bank resolution of domestic systemically important banks (DSIBs) in stress scenarios. The South Africa Reserve Bank (SARB) designated six financial institutions as DSIBs: Absa Bank Ltd., Capitec Bank Ltd., FirstRand Bank, Investec, Nedbank, and Standard Bank of South Africa. The resolution powers include general power to support an orderly resolution, and more specifically, establish a bridge institution, asset and liability transfers and bail-in,...

Bulletin