Business Day reported recently on an academic study that the Reserve Bank commissioned to look at SA banks’ exposure to climate-related transition risks. It was not just academic: the Bank has a mandate to safeguard SA’s financial stability. It has to be alert to factors that could put that stability at risk.

That means careful and constant monitoring and measuring of such risks. That in turn enables the Bank to use the macroprudential tools it has, or develop new ones to manage those risks, in partnership with SA’s financial sector, to try to prevent it from materialising. As was pointed out by bankers and the Bank itself at its AGM this week, SA has a good record of financial stability. It can boast an impressive record too on the soundness and stability of its banking system...

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