Non-performing loans currently pose little risk to the health of financial institutions. This is not surprising in an environment where the unemployment rate is low and interest rates have been declining. Nonetheless, the arrears rates have been increasing steadily over recent years to the highest it has been for around a decade, and so warrants some scrutiny.
Good things it is said, like Rome, are seldom designed, built and functioning in a day. The SARB, National Treasury and the Financial Services Board are engaged in thorough preparation and look forward to robust implementation of the new regulatory architecture.