Our financial sector is the jewel in South Africas crown.
We dont tend to talk much about the disasters avoided compared to the disasters we plunge into, but over the past few years, it is remarkable how well our financial system has coped with the ravages of Covid, natural disasters like the floods in KwaZulu-Natal and the many economic slings and arrows we have endured.
The resilience of the sector doesnt happen by accident.
Last week, BLSA hosted the International Monetary Fund team responsible for the Financial Sector Assessment Programme (FSAP) it undertook in South Africa over the last few years.
The FSAP is a voluntary process that countries can go through in which the IMF undertakes a detailed assessment of the financial systems.
This was the third done on South Africa in the last 20 years and it provides an important external judgment.
Of course, the sector and its regulators focus extensively on ensuring the appropriate regulation and infrastructure is in place to support the system.
When you delve into it, the plumbing that ensures banks and other key institutions work effectively, from how they lend money to each other to the role the Reserve Bank plays to ensure liquidity and manage through crises, is a remarkable achievement.
It is constantly developing as we learn from each experience.
The Covid crisis was completely unexpected no one modelled a scenario in which the entire economy would shut for an extended period yet the toolbox that was assembled following the Global Financial Crisis provided a critical set of capabilities for regulators to intervene and manage the Covid disaster.
Capital buffers and liquidity windows that were developed after the lessons of that crisis a decade earlier were very important in the beginning of this crisis.
Of course, not everything was perfect, so the industry and its regulators are working on improving various details of it.
Overall, though, the financial system passed the Covid test with flying colours.
The IMF team was full of praise for the quality of regulation of the system, though they have made several recommendations on areas that could be improved.
What made last weeks meeting with the IMF so important is the wider engagement with the real economy.
The financial system is not important for its own sake what matters is how it works in conjunction with the rest of the business world, as well as all South Africans.
What did come through clearly in the IMFs assessment is that the financial system faces risks from outside of it too, and these need attention.
Risks can arise not only from economic shocks and problems with the plumbing of the system itself, but from how companies manage their assets and liabilities into the financial system.
That is an important conversation and I thought it was particularly appropriate that BLSA could work with the IMF to share insights with the wider business community.
We cannot take our financial sector for granted.
The linkages with the wider economy need to be understood and factored into how the system manages risk.
Thank you to the IMF team for the engagement the external assessment of the quality of our financial system supports wider confidence in our economy.
And business stands ready to play a key part in developing it further.
BLSA believes that, using the JET Investment Plan as a starting point and presenting detailed plans on solutions to the blockages, progress can be made to mobilise funding at scale, I write in News24 Business.
Implementing Chief Justice Raymond Zondos recommendations to prevent corruption will have little effect if we dont address the rise of organised crime in SA as well, I write in Business Day. Crime syndicates are causing extreme economic damage while threatening human life.
The inaction by our law enforcement is intolerable, and extremely damaging. South Africans deserve maintenance of law and order: that is the most basic task of any government.
The corrupt elements in our law enforcement agencies must be expunged from the system.
*This article was first published in the Business Leadership South Africa (BLSA) weekly newsletter on 14 November 2022. The author Busisiwe Busi Mavuso, is the CEO of BLSA
