South Africa - Financial Sector Assessment
The South African financial system has weathered the shock of COVID-19 but faces growing risks emanating from a weak macroeconomic outlook. The pandemic crisis hit South Africa hard, with nonresident capital outflows accelerating and the domestic a...
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| Format: | Financial Sector Assessment Program (FSAP) |
| Language: | English |
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Washington, DC: World Bank
2022
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| Online Access: | http://documents.worldbank.org/curated/en/102601645128957641/South-Africa-Financial-Sector-Assessment http://hdl.handle.net/10986/37079 |
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okr-10986-370792022-03-05T05:10:48Z South Africa - Financial Sector Assessment World Bank COVID-19 CORONAVIRUS PANDEMIC ECONOMIC RECOVERY INSURANCE The South African financial system has weathered the shock of COVID-19 but faces growing risks emanating from a weak macroeconomic outlook. The pandemic crisis hit South Africa hard, with nonresident capital outflows accelerating and the domestic and global slowdown precipitating a6.4 percent GDP contraction in 2020. A brief period of liquidity stress was managed with new central bank facilities and a lowering of liquidity requirements; and banks proved resilient thanks to sound capital and liquidity buffers. Asset management and pension assets saw falling valuations, but redemption pressures quickly dissipated as markets stabilized. The intensification of the sovereign financial system nexus emerging from the crisis poses risks going forward, and a resurgence of the pandemic could deteriorate asset quality. Banks are resilient in the FSAP’s baseline; however, amedium-term adverse stress scenario would cause a significant decline in capital although most banks would remain sufficiently capitalized. Under stress, banks could face some liquidity gaps, particularly at very short maturities, highlighting the importance of continued close monitoring. The impact of COVID-19 on insurers has thus far been contained, but prudential rules should be strengthened to ensure the measure of capital is sufficiently robust. 2022-03-04T15:25:13Z 2022-03-04T15:25:13Z 2022-01-01 http://documents.worldbank.org/curated/en/102601645128957641/South-Africa-Financial-Sector-Assessment http://hdl.handle.net/10986/37079 English CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank Washington, DC: World Bank Financial Sector Assessment Program (FSAP) Economic & Sector Work Africa Africa Eastern and Southern (AFE) South Africa |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
COVID-19 CORONAVIRUS PANDEMIC ECONOMIC RECOVERY INSURANCE |
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COVID-19 CORONAVIRUS PANDEMIC ECONOMIC RECOVERY INSURANCE World Bank South Africa - Financial Sector Assessment |
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Africa Africa Eastern and Southern (AFE) South Africa |
| description |
The South African financial system
has weathered the shock of COVID-19 but faces growing risks
emanating from a weak macroeconomic outlook. The pandemic
crisis hit South Africa hard, with nonresident capital
outflows accelerating and the domestic and global slowdown
precipitating a6.4 percent GDP contraction in 2020. A brief
period of liquidity stress was managed with new central bank
facilities and a lowering of liquidity requirements; and
banks proved resilient thanks to sound capital and liquidity
buffers. Asset management and pension assets saw falling
valuations, but redemption pressures quickly dissipated as
markets stabilized. The intensification of the sovereign
financial system nexus emerging from the crisis poses risks
going forward, and a resurgence of the pandemic could
deteriorate asset quality. Banks are resilient in the FSAP’s
baseline; however, amedium-term adverse stress scenario
would cause a significant decline in capital although most
banks would remain sufficiently capitalized. Under stress,
banks could face some liquidity gaps, particularly at very
short maturities, highlighting the importance of continued
close monitoring. The impact of COVID-19 on insurers has
thus far been contained, but prudential rules should be
strengthened to ensure the measure of capital is
sufficiently robust. |
| format |
Financial Sector Assessment Program (FSAP) |
| author |
World Bank |
| author_facet |
World Bank |
| author_sort |
World Bank |
| title |
South Africa - Financial Sector Assessment |
| title_short |
South Africa - Financial Sector Assessment |
| title_full |
South Africa - Financial Sector Assessment |
| title_fullStr |
South Africa - Financial Sector Assessment |
| title_full_unstemmed |
South Africa - Financial Sector Assessment |
| title_sort |
south africa - financial sector assessment |
| publisher |
Washington, DC: World Bank |
| publishDate |
2022 |
| url |
http://documents.worldbank.org/curated/en/102601645128957641/South-Africa-Financial-Sector-Assessment http://hdl.handle.net/10986/37079 |
| _version_ |
1764486548620836864 |