The South African economy will not be immune to these developments. The economy has made a fragile and uneven recovery from the recession, but the future growth prospects will be affected significantly by global developments.
There is a debate as to whether the reduction has gone too far, but the fact that market-making activity is lower than it was pre-crisis is a desirable outcome given liquidity risk was under-priced pre-crisis. Rather than describing it as a reduction in market-making, I think it is more useful to think of it as a reduction in the risk-absorption capacity of intermediaries.