Work is ongoing to determine the appropriate policy instruments. To date, while counter-cyclical measures have been introduced to address the fallout of the ongoing global economic crisis, South Africa’s banking system has emerged largely unscathed. While there is no room for complacency, no policy decisions have had to be taken in respect of financial stability.
One area of potential concern for financial stability is the acceleration in the growth of unsecured lending by the banking sector, although unsecured lending is not restricted to the banking sector only. This form of lending has been growing at rates in excess of 30 per cent and, at face value, anything growing at such elevated rates must be a cause for concern.