Lessons from South African bank failures 2002 to 2014
| dc.contributor.advisor | Du Plessis, S. A. | en_ZA |
| dc.contributor.advisor | Fourie, J. | en_ZA |
| dc.contributor.author | Havemann, Roy Charles | en_ZA |
| dc.contributor.other | Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Economics. | en_ZA |
| dc.date.accessioned | 2019-03-03T19:03:43Z | |
| dc.date.accessioned | 2019-04-17T08:18:55Z | |
| dc.date.available | 2019-03-03T19:03:43Z | |
| dc.date.available | 2019-04-17T08:18:55Z | |
| dc.date.issued | 2019-04 | |
| dc.description | Thesis (PhD)--Stellenbosch University, 2019. | en_ZA |
| dc.description.abstract | ENGLISH SUMMARY : This study draws lessons from recent South African financial history. The period covers the 2002/3 small bank crisis, the 2008 global financial crisis and the collapse of African Bank in 2014. During the small bank crisis, twelve banks experienced runs and a further ten deregistered. In chapter 2, I use a monthly bank-level data set to show that the failing banks were all solvent, but that their funding structure made them fragile and susceptible to a confidence shock. The central bank did not intervene to provide liquidity to the affected banks, worsening the crisis. The lessons are that bank failures can impose both short- and long-term economic costs, monetary policy can have financial stability implications, and that a credible and clear bank resolution strategy is critical. South Africa did not experience any bank failures during the 2008 global financial crisis period. In chapter 3, I show that this is partly because the banking regulator increased capital adequacy ratios during the pre-crisis period, in response to rapid credit growth. The lesson is that macroprudential tools can reduce credit growth and dampen overheating financial cycles. In chapter 4, the successful bail-in of creditors in African Bank during 2014 provides lessons on the intended and unintended consequences of post-global financial crisis bank resolution tools. Money-market funds ‘broke the buck’, triggering significant redemptions and some financial spillovers. The authorities required discretionary liquidity restrictions and market-making facilities. The lesson is that – correctly applied – new resolution tools can support the sustainable restructuring of a failing bank, reduce financial spillovers, and minimise taxpayers losses. The conclusion points to broader lessons from the whole period, particularly the primary importance of a coordinated monetary and financial stability policy framework. | en_ZA |
| dc.description.abstract | AFRIKAANSE OPSOMMING : In hierdie studie word lesse uit Suid-Afrika se onlange finansiële geskiedenis ondersoek. Die studie dek die tydperk vanaf die ineenstorting van Saambou in 2002, en die gevolglike kleinbankkrisis, tot die mislukking van African Bank in 2014. Tydens die kleinbankkrisis het twaalf banke banklope ervaar en nog tien is gederegistreer. In hoofstuk twee wys ek, met behulp van ’n maandelikse bankvlakdatastel, dat dié mislukte banke almal solvent was maar dat hul befondsingstrukture hulle oop gelaat het vir ’n geloofwaardigheidskrisis. Die sentrale bank het nie ingetree om likwiditeit aan hulle te verleen nie, wat die krisis vererger het. Die lesse is dat bankmislukkings kort- én langtermyn ekonomiese gevolge inhou, dat monetêre beleid finansiële stabiliteit kan beïnvloed, en dat geloofwaardige en duidelike strategieë vir bankresolusies onmisbaar is. Tydens die wêreldwye finansiële krisis van 2008 het Suid-Afrika geen bankmislukkings ervaar nie. Hoofstuk drie wys dat dit deels daaraan toe te skryf is dat die bankreguleerder in die tydperk voor die krisis kapitaaltoereikendheidsverhoudings verhoog het in antwoord op vinnige kredietgroei. Die les is dat makroomsigtigheidsmaatreëls kreditgroei kan beperk en oorverhittende ekonomiese siklusse kan demp. In hoofstuk 4 verskaf die suksesvolle ‘in-redding’ (‘bail-in’) van krediteure van African Bank in 2014 lesse aangaande die bedoelde en onbedoelde gevolge van bankresolusiemaatreëls wat ontwikkel is na die wêreldwye finansiële krisis. Geldmarkfondse het noodontrekkings ervaar, wat beduidende aflossings en finansiële uitkringeffekte tot gevolg gehad het. Die owerhede het diskresionêre likwiditeitsbeperkings en mark-maak fasiliteite vereis. Dit les is dat – korrek toegepas – nuwe bankresolusiemaatreëls die volhoubare herstrukturering van ’n bank kan bevorder, end die finansiële uitkringeffekte en die kostes vir belastingbetalers verminder. Die slothoofstuk trek breër lesse uit die hele periode, veral die primêre belang van ’n gekoördineerde monetêre en finansiële stabiliteitsbeleidsraamwerk. | af_ZA |
| dc.format.extent | xii, 153 pages ; illustrations, includes annexures | |
| dc.identifier.uri | http://hdl.handle.net/10019.1/105919 | |
| dc.language.iso | en_ZA | en_ZA |
| dc.publisher | Stellenbosch : Stellenbosch University | |
| dc.rights.holder | Stellenbosch University | |
| dc.subject | South Africa -- Economic conditions -- 2002-2014 | en_ZA |
| dc.subject | Bank failures -- South Africa -- 2002-2014 | en_ZA |
| dc.subject | African Development Bank Group -- South Africa | en_ZA |
| dc.subject | Global Financial Crisis, 2008-2009 | en_ZA |
| dc.subject | UCTD | |
| dc.title | Lessons from South African bank failures 2002 to 2014 | en_ZA |
| dc.type | Thesis | en_ZA |