In South Africa, this objective was mainly pursued through the regulation and supervision of banks, which has been the responsibility of the Bank Supervision Department within the Bank. It soon became clear, however, that sound and profitable individual banks did not guarantee a sound banking and financial system.
Firstly, it meant households became less inclined to hold their savings as bank deposits, and second, the pool of funds created by superannuation increased demand for securities such as bank securities. Within this trend away from deposits to funding through securities markets, there were also forces that resulted in banks increasing their use of offshore funding.