Francois Groepe delivers special lecture
Prof Francois Groepe, Deputy Governor of the South African Reserve Bank (SARB) and honorary professor in the Department of Economics, delivered a special lecture in the department on Thursday, 22 February. His talk was on 'The special case of banks and the promotion of financial system-wide stability.'
Prof Groepe explained how mob psychology and mass hysteria could lead to a bankcrisis. Although some people believe this could happen randomly, there are empirical studies that suggest that these panics are related to the business cycle. “If depositors believe there is an impending downturn, they will anticipate difficulties in the banking sector and try to withdraw their funds which precipitates a crisis.
He mentioned, though, that the aggregate capital levels of South African banks – the total amount of capital that banks have available – are quite high, standing at 15/16% compared to a global average of 8%.
“Our banking system is quite resilient," said Prof Groepe.
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BER Weekly
14 October 2019While incoming data on the global economy remains downbeat, the mood was lifted last week after progress was made on US-China trade talks and Brexit negotiations. On the domestic data front, mining and manufacturing data for August added to growing evidence that real GDP growth likely slowed significantly in 2019Q3 after the nice rebound recorded in...
Read the full issue