Providing funds is a risk – albeit calculated – at the best of times. It is unlikely that any institutions foresaw a world in lockdown, with an already stuttering economy facing an increasingly uncertain future, Fitch's GDP forecast of minus 5.5% for South Africa is a concern for all, not least the financial institutions.
I am very grateful to the writers of the most interesting articles published in this year's Banking & Finance in Africa feature. The feature is a snapshot of a wide range of topics that fall into banking and finance – those lenders of money 'that makes the world to go round'. The articles include routes taken by criminals to launder money; the legality of freezing accounts; banking systems, including 'stokvels'; the demand for sustainable and green lending and, of course, what needs to be put in place during and post COVID-19.
The 2008 financial crisis spawned new regulations through the capital and liquidity standards in Basel III. While the world has never truly recovered from that crisis, in the current environment, these requirements are likely to ensure that both institutions and clients are protected. A BDO Financial Services Report states, 'The measures implemented by the PA in South Africa are in line with the measures that have been taken by major regulators globally, and is an indicator that the appropriate measures were implemented swiftly to try and minimise the impact that Covid-19 will have on the local economy'.
The feature carries two articles on the proposed regulations for crypto assets – a sector that is obscure for many and makes more than a few of us feel, perhaps, as people did hundreds of years ago when 'under the mattress' was a good place to keep money.
The impact of the Coronavirus pandemic cannot be underestimated; it is to be hoped that the outcome of high-level stress testing done as part of post-graduate research by Corné Conradie, actuary and partner with PwC, in collaboration with Professor Conrad Beyers, Absa chairperson in Actuarial Science at the University of Pretoria, is correct. The outcome of the research indicates that while banks will experience 'significant strain', they are 'sufficiently capitalised to withstand the shocks' of the pandemic.
without prejudice's sub-editor, Gail Schimmel, commented, 'In Leigh Bardugo's well-received first adult novel,
Ninth House, the future of the economy is divined by a secret society at Yale rooting around in a living person's entrails. Let us hope that the economists of South Africa have slightly better tools at their disposal as we go forth into the ubiquitous "new normal". I concur.