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Cape Town - Emergency measures to rescue South African banks from extreme financial straits “within hours” may be tabled in parliament next year.
National Treasury deputy director general Ismail Momoniat said it was necessary to launch plans like these as soon as possible, with the deepening of the global debt crisis.
“If one of South Africa’s four commercial banks were to go under, such a systemic collapse would cause the country’s entire banking system to give way – as evidenced by the European debt crisis,” he told the standing committee on finance.
Momoniat said the Treasury hoped to finalise most of the work on new financial legislation by next year. The law-writing process was expected to be fully complete within the next three years.
The purpose was to hone financial sector regulation and offer consumers sorely-needed protection.
Parts of the legislation being proposed relate to financial markets, credit rating agencies, a general review of the Financial Services Act and the draft banks amendment bill.
One of the proposed emergency measures to be contained in the legislation would be the recapitalisation of a bank “within hours”.
“It would be like Section 6 of the Terrorism Act, in terms of which a ‘state of emergency’ for banks is declared.
“Accountability would be established only after implementing such a decision,” explained Momoniat.
Momoniat said it was evident that the eurozone financial crisis was “spreading like a cancer”.
National Treasury deputy director general Ismail Momoniat said it was necessary to launch plans like these as soon as possible, with the deepening of the global debt crisis.
“If one of South Africa’s four commercial banks were to go under, such a systemic collapse would cause the country’s entire banking system to give way – as evidenced by the European debt crisis,” he told the standing committee on finance.
Momoniat said the Treasury hoped to finalise most of the work on new financial legislation by next year. The law-writing process was expected to be fully complete within the next three years.
The purpose was to hone financial sector regulation and offer consumers sorely-needed protection.
Parts of the legislation being proposed relate to financial markets, credit rating agencies, a general review of the Financial Services Act and the draft banks amendment bill.
One of the proposed emergency measures to be contained in the legislation would be the recapitalisation of a bank “within hours”.
“It would be like Section 6 of the Terrorism Act, in terms of which a ‘state of emergency’ for banks is declared.
“Accountability would be established only after implementing such a decision,” explained Momoniat.
Momoniat said it was evident that the eurozone financial crisis was “spreading like a cancer”.
