NEWS ANALYSIS: Central bank committee fears SA will fall into a ‘doom loop’
Danger lies in the interconnection between banks’ large holdings of sovereign debt, and the tendency of governments to bail them out
01 June 2020 - 05:05
The “worry committee” is how the Reserve Bank’s financial stability committee is sometimes described. It is their job to ask: “What have we missed?”, as deputy governor Rashad Cassim put it at the release of the Bank’s Financial Stability Review.
The “worry committee” is ill at ease about the banking-sovereign nexus. In fact it views this, alongside issues that include the Covid-19 crisis and the worsening of economic conditions, as risks to the local financial system that have a high likelihood of materialising...
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