SARB’s Tshazibana: SA banks well capitalized

The US is currently facing what some analysts call a crisis confidence in its mid-tier banks. This as the recent fall of major banks stirred concerns that the US is on the brink of a financial catastrophe, one that could resemble the 2008 crisis that led to the Great Recession. Deputy Governor and CEO of the Prudential Authority at the South African Reserve Bank Fundi Tshazibana caught up with CNBC Africa’s Palesa Mofokeng to give an update on the conditions of South Africa's banking sector. Tshazibana shared insights on the impact of the global economic environment on South African banks, liquidity concerns, and the factors that play a role in the South African Reserve Bank's decision-making process amid external influences. When asked about the recent crisis in the US and its effects on South African banks, Tshazibana acknowledged that there was initially some impact due to market interconnections. However, she noted that South African banks have not struggled to access funding and that the jitters in the market have largely settled. Despite liquidity drying up for emerging markets as the US continues to raise rates, she expressed confidence in the ability of South African banks to weather the storm, citing their continued access to funding as non-residents exit the market. Tshazibana also addressed the potential impact of the Federal Reserve's rate hikes on South Africa, emphasizing that the South African Reserve Bank considers various factors, including inflation risks and global economic trends, in its decision-making process. Regarding the health of South African banks, Tshazibana reassured that they remain well capitalized overall, with appropriate actions taken at the individual level where needed to ensure financial stability. However, she expressed concerns about the low growth of the economy, highlighting the importance of sustainable growth, job creation, and production. Tshazibana emphasized the impact of external factors such as load shedding on the country's growth prospects, signaling a cautious approach to risk management and the safeguarding of depositors' funds.