These disciplines, tested by world-wide experience, amply reward successes, but severely punish failures. With its economic policies of the past few years, South Africa has already proved that it is determined to stand up to this challenge.
If financial institutions become more conscious of taking credit risk and all financial institutions take the same action simultaneously, the adverse feedback loop between the finance and the economy may intensify through financial institutions’ restraining from accumulating their assets, leading to the fallacy of composition, although the action is judged as rational for each individual institution.