This issue of the Financial Stability Review focuses on the six-month period ended December 2011, but is updated with more recent information where available, and comprises two main sections, namely (i) financial stability developments and trends, and (ii) infrastructure and regulation.

The first section starts with an overview of current international macrofinancial conditions. It contains a discussion of the major developments in the international, emerging-market and regional environments that may influence financial stability in South Africa. This section concludes with an analysis of the main developments in the South African financial system, focusing specifically on the sectors that have a significant bearing on the stability of the domestic financial system.

The second section focuses on the financial system infrastructure and regulation, and starts with an update on financial policy, followed by an overview of legislative and infrastructural developments affecting the South African financial system. This is followed by an update on South Africa’s implementation of the SAM project for the insurance sector and an update regarding the progress made in implementing the Treating Customers Fairly (TCF) initiative. An assessment of the progress made in implementing the proposed twin peaks model of financial regulation for South Africa is also provided. This section concludes with a discussion of issues pertaining to strengthening South Africa’s financial-sector crisis resolution framework.

Report by the South African Reserve Bank