Gordhan to look at bankers' pay

Cape Town - Finance Minister Pravin Gordhan will be engaging with the CEOs of SA's major banking groups - but he stressed at a pre-Budget press conference that there would be no "big bang" in terms of regulatory issues in SA.

Gordhan said local financial institutions had weathered the global financial crisis of 2008 well, and - in most instances - local banks were already ahead of the new capital adequacy ratios being touted for global institutions.

"We started taking action after the 2000/01 small banking crisis in SA. By and large SA institutions have already achieved the new capital adequacy ratios."

He said banks should look at what lessons could be learned in risk management.

In the Budget speech, he outlined several new initiatives to improve SA's financial regulatory system. These are:

• The framework for accountability, coordination and performance of financial regulators needed to be strengthened - possibly with the formation of a formal council of regulators;
• Adherence to global regulatory standards in banking,insurance and securities markets would be reviewed;
• Various changes to the Basel II framework would be made once the impact assessment was completed;
• The scope of regulation would be expanded to include hedge funds,private equity and credit rating agencies;
• Crisis contingency plans would be improved; and
• Enforcement mechanisms to counter abuse would be strengthened.

Gordhan said he would be engaging with the CEOs of SA's major banks on recommendations made by the Banking Enquiry Panel into bank charges.

"This is something we want to take further," he said.

He said he would also be looking at the remuneration of executives in the banking sector. "We want to see how we can manage this differently...we don't want to find ourselves in the same situation as the rest of the world."

- Fin24.com