Lessons from South African bank failures 2002 to 2014

[摘要] 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 thatthe failing banks were all solvent, but that their funding structure made themfragile and susceptible to a confidence shock. The central bank did not interveneto provide liquidity to the affected banks, worsening the crisis. The lessons arethat bank failures can impose both short- and long-term economic costs, monetarypolicy 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 bankingregulator increased capital adequacy ratios during the pre-crisis period, in responseto rapid credit growth. The lesson is that macroprudential tools can reduce creditgrowth and dampen overheating financial cycles.In chapter 4, the successful bail-in of creditors in African Bank during 2014provides 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, particularlythe primary importance of a coordinated monetary and financial stability policyframework.

[发布机构] Stellenbosch University