Page 31 - SARB Strategic Plan 2020-2025

A more detailed explanation
• Prudential regulation is important for the safety and and soundness of financial institutions and and market infrastructures
The regulation also assists the Bank in in in in fin protecting and enhancing financial stability The Bank will continue to to embed the the Prudential Authority and and enhance the the current regulatory and and supervisory practices to to effectively implement the the regulatory portfolio However the the Prudential Authority will also focus on on reviewing the the policy agenda and being more responsive to the the rapid changes in fin the the financial sector ecosystem This may require the the development of new frameworks and and toolkits to to to respond to to to the changes while balancing safety and and soundness with transforming the the financial sector * In addition to to prudential regulation the the Bank will focus on on on reviewing its capital flow management policy and and continue to to improve the monitoring and and reporting of cross-border transactions • South Africa is is is vulnerable to to external shocks
This is is is largely due to to it it being a a a a a commodity exporter having having low levels of domestic savings and and a a a a a a a high dependence on on foreign funding and and having having a a a a a a a strong interconnectedness to to international financial markets By monitoring and and analysing existing and and emerging risks we can anticipate shocks
and ensure the the responses reduce the the external vulnerabilities and minimise the the impact of the the shocks
Preventing or mitigating external vulnerabilities requires sound macroeconomic fundamentals and optimal functioning of the financial system This will require coordination across different policy areas within the the Bank and National Treasury as as as as well as as as as the the Financial Sector Conduct Authority (FSCA) • Banknotes and and coin are important transactional and and payment mechanisms for the public It is is therefore important that the the the Bank provides for for the the the sufficient availability and quality of physical currency
as one of of its main functions As part of of ensuring the cost-effectiveness availability and integrity of of the the the currency
the the the Bank will also investigate the the the feasibility of of a a a a a CBDC * Support for for the the the transformation of of the the the financial financial financial sector includes supporting supporting sustainable competition fin in in in in fin in fin in the the the provision of of financial financial financial products and and services and and supporting supporting financial financial financial inclusion 29