scholarly journals AN ANALYSIS OF ASPECTS OF THE PROPOSED REFORM OF THE FINANCIAL CONSUMER COMPLAINT RESOLUTION MECHANISMS IN THE SOUTH AFRICAN BANKING SECTOR

Obiter ◽  
2021 ◽  
Vol 42 (2) ◽  
Author(s):  
Michel M Koekemoer
Keyword(s):  
Dispute Resolution ◽  
South African ◽  
Financial Institutions ◽  
Banking Sector ◽  
Financial Sector ◽  
Regulatory Framework ◽  
Consumer Complaint ◽  
Market Conduct ◽  
Fair Treatment ◽  
Resolution Structure

One objective of the revised South African market conduct regulatory framework for the financial sector is to introduce an effective dispute resolution framework. The Financial Sector Regulation Act, and the Act to follow the Draft Conduct of Financial Institutions Bill, potentially address some of the deficiencies associated with the old dispute resolution framework. This article makes a distinction between the old and new regulatory provisions concerning internal dispute resolution and external dispute resolution structures in the banking sector. This research highlights the changes involved in the new regulatory framework and identifies which aspects of the amended regulatory framework aim to address a particular issue associated with the old dispute resolution framework. It is not argued whether this legislation will achieve the fair treatment and protection of financial customers in the banking sector, as only time will tell. However, it is acknowledged that the new structure will improve consistency and efficacy in this dispute resolution structure.

scholarly journals Measuring the systemic risk in the South African banking sector

2017 ◽  
Vol 20 (1) ◽  
Author(s):  
Gregory M. Foggitt ◽  
Andre Heymans ◽  
Gary W. Van Vuuren ◽  
Anmar Pretorius
Keyword(s):  
Financial Crisis ◽  
South African ◽  
Systemic Risk ◽  
Banking Sector ◽  
Risk Index ◽  
Financial Sector ◽  
Ethical Behaviour ◽  
The South ◽  
Case Scenario ◽  
Worst Case

Background: In the aftermath of the sub-prime crisis, systemic risk has become a greater priority for regulators, with the National Treasury (2011) stating that regulators should proactively monitor changes in systemic risk.Aim: The aim is to quantify systemic risk as the capital shortfall an institution is likely to experience, conditional to the entire financial sector being undercapitalised.Setting: We measure the systemic risk index (SRISK) of the South African (SA) banking sector between 2001 and 2013.Methods: Systemic risk is measured with the SRISK.Results: Although the results indicated only moderate systemic risk in the SA financial sector over this period, there were significant spikes in the levels of systemic risk during periods of financial turmoil in other countries. Especially the stock market crash in 2002 and the subprime crisis in 2008. Based on our results, the largest contributor to systemic risk during quiet periods was Investec, the bank in our sample which had the lowest market capitalisation. However, during periods of financial turmoil, the contributions of other larger banks increased markedly.Conclusion: The implication of these spikes is that systemic risk levels may also be highly dependent on external economic factors, in addition to internal banking characteristics. The results indicate that the economic fundamentals of SA itself seem to have little effect on the amount of systemic risk present in the financial sector. A more significant relationship seems to exist with the stability of the financial sectors in foreign countries. The implication therefore is that complying with individual banking regulations, such as Basel, and corporate governance regulations promoting ethical behaviour, such as King III, may not be adequate. It is therefore proposed that banks should always have sufficient capital reserves in order to mitigate the effects of a financial crisis in a foreign country. The use of worst-case scenario analyses (such as those in this study) could aid in determining exactly how much capital banks could need in order to be considered sufficiently capitalised during a financial crisis, and therefore safe from systemic risk.

Selected challenges associated with the reliance on customer due diligence measures to curb money laundering in South African banks and related financial institutions

2021 ◽  
Vol 8 (1) ◽  
pp. 42-66
Author(s):  
Howard Chitimira ◽  
Sharon Munedzi
Keyword(s):  
South Africa ◽  
South African ◽  
Money Laundering ◽  
Financial Institutions ◽  
Financial Institution ◽  
Financial Sector ◽  
Due Diligence ◽  
Role Players ◽  
Customer Due Diligence ◽  
Combat Money Laundering

Customer due diligence is a means of ensuring that financial institutions know their customers well through know-your-customer (KYC) tools and related measures. Notably, customer due diligence measures include the identification and verification of customer identity, keeping records of transactions concluded between a customer and the financial institution, ongoing monitoring of customer account activities, reporting unusual and suspicious transactions, and risk assessment programmes. Accordingly, financial institutions should ensure that their customers are risk assessed before concluding any transactions with them. The regulation of money laundering is crucial to the economic growth of many countries, including South Africa. However, there are still numerous challenges affecting the banks and other role players’ reliance on customer due diligence measures to combat money laundering in South Africa. Therefore, a qualitative research methodology is employed in this article to unpack such challenges. The challenges include the failure to meet the identification and verification requirements by some South African citizens, onerous documentation requirements giving rise to other persons being denied access to the formal financial sector, and the lack of express provisions to regulate the informal financial sector in South Africa. Given this background, the article discusses the challenges associated with the regulation and implementation of customer due diligence measures to enhance the combating of money laundering in South African banks and related financial institutions. It is hoped that the recommendations provided in this article will be utilised by the relevant authorities to enhance customer due diligence and effectively combat money laundering activities in South African banks and related financial institutions.

Financial Market in Nepal

2020 ◽  
pp. 794-842
Author(s):  
Narayan Prasad Paudel
Keyword(s):  
Private Sector ◽  
Financial Market ◽  
Financial Institutions ◽  
Banking Sector ◽  
Financial Sector ◽  
Legal Framework ◽  
Capital Gains ◽  
Individual Investors ◽  
Infrastructure Development ◽  
Private Sector Development

The Nepalese financial sector is attributed of banking sector and non-banking sector. There is exponential growth in the number of financial institutions in Nepal in the last decade. The existing legal framework and institutional setup in Nepal is not conducive to the overall financial sector and private sector development and thus there is an urgent need for reformation in these sectors. The major impediments to private sector involvement in infrastructure development projects include the political and administrative instability; lack of consistent planning; lack of effective institutional support in designing and development of private sector infrastructure projects. Talking about the capital market and capital gains In Nepal, capital gains on securities transactions are taxed as ordinary income to corporations and individual investors while in most of the emerging markets capital gains on investments in stocks and bonds are not taxed, which need to be reformed as per the international practices.

Polish banking scandal may lead to more consolidation

2018 ◽  
Keyword(s):  
Interest Rates ◽  
Financial Institutions ◽  
Banking Sector ◽  
Financial Sector ◽  
Household Consumption ◽  
Financial Supervision ◽  
External Shocks ◽  
Content Type ◽  
Near Term ◽  
Loan Growth

Significance Allegations of bribery and corruption against the former chairman of Poland’s Financial Supervision Authority (KNF), the financial sector regulator, have stoked both political and regulatory tensions. Impacts The banking sector is resilient to domestic and external shocks, but a slowdown in GDP could dampen household loan growth next year. Further sector consolidation is likely and would further underline the dominance of large, state-backed financial institutions. Interest rates are unlikely to be raised before end-2019 at the earliest, providing some support to household consumption in the near term.

scholarly journals Qualitative Analysis of Consumer Redressal Practices in Indian Regulated Sectors

2020 ◽  
Vol 9 (4) ◽  
pp. 361-370
Keyword(s):  
Decision Making ◽  
Qualitative Analysis ◽  
Dispute Resolution ◽  
Consumer Complaint ◽  
Regulatory Data ◽  
Dispute Resolution Mechanism ◽  
Telecom Sector ◽  
Resolution Structure

This paper aims to study and analyseconsumer complaint resolution mechanisms and ombudsman frameworks in three Indian regulated sectors and tries to compare it with that of telecom sector. Here an analysis of regulatory data is carried out. The paper is both theoretical and analytical in nature.This research sheds light on complaint resolution frameworks in Indian regulated sectors such as “Banking, Insurance, Electricity and telecom. Role of Ombudsman and alternates dispute resolution mechanism in the sector is also studied. It is necessary for Ombudsman to perform its duties and responsibilities for overall growth of the sector.Visible, sharp complaint resolution structure and noticeable, orderly decision making entity are truly necessary component of complaint solving mechanism. This Paper also analyses statistics, facts of complaint resolution rates etc. Consumer complaint solving framework is a regulatory vehicle for discarding of grievances. This research is indicator of eight principles of effective consumer resolution mechanism.

Financial Market in Nepal

2016 ◽  
pp. 146-194
Author(s):  
Narayan Prasad Paudel
Keyword(s):  
Private Sector ◽  
Financial Market ◽  
Financial Institutions ◽  
Banking Sector ◽  
Financial Sector ◽  
Legal Framework ◽  
Capital Gains ◽  
Individual Investors ◽  
Infrastructure Development ◽  
Private Sector Development

The Nepalese financial sector is attributed of banking sector and non-banking sector. There is exponential growth in the number of financial institutions in Nepal in the last decade. The existing legal framework and institutional setup in Nepal is not conducive to the overall financial sector and private sector development and thus there is an urgent need for reformation in these sectors. The major impediments to private sector involvement in infrastructure development projects include the political and administrative instability; lack of consistent planning; lack of effective institutional support in designing and development of private sector infrastructure projects. Talking about the capital market and capital gains In Nepal, capital gains on securities transactions are taxed as ordinary income to corporations and individual investors while in most of the emerging markets capital gains on investments in stocks and bonds are not taxed, which need to be reformed as per the international practices.

scholarly journals Bank stability in South Africa: what matters?

2019 ◽  
Vol 14 (1) ◽  
pp. 122-136
Author(s):  
Syden Mishi ◽  
Sibanisezwe Alwyn Khumalo
Keyword(s):  
South African ◽  
Business Models ◽  
Banking Sector ◽  
Financial Sector ◽  
The South ◽  
Bank Stability ◽  
Panel Data Estimation ◽  
Panel Data Estimation Techniques ◽  
Lending Activity ◽  
Data Estimation

The study examined the determinants of bank stability within the South African banking sector. By controlling for individual bank characteristics and market characteristics, the study determined possible determinants of solvency, a proxy for bank stability, measured by z-score within the South African financial sector. The South African financial sector is highly concentrated but with a significantly large number of banks, the greater portion being foreign owned banks. The business models of some of the financial intermediaries differ from the big four and therefore the influence of the type of business model is of great interest in this study, as it highlights a unique feature of the South African financial sector. The study’s investigation used panel data estimation techniques and found that among the specific bank characteristics, lending activity and capitalization do significantly affect solvency of banks and at sector level concentration was significant. The crisis dummy also revealed that the presence of a financial crisis heightened insolvency. The results have implications for financial institutions and therefore are of interest to regulators, bank management and researchers. Policy prescription in the form of Prompt Corrective Action framework is made to ensure proactive reaction to trends likely to cause instability.

scholarly journals THE PROBLEMS AND PROSPECTS FOR FINANCIAL INTERMEDIATION DEVELOPMENT IN UKRAINE

2019 ◽  
pp. 92-100
Author(s):  
Iryna PRIKHNO ◽  
Igor CHASTOKOLENKO ◽  
Artem MARCHENKO
Keyword(s):  
Financial Market ◽  
Financial Institutions ◽  
Banking Sector ◽  
Financial Intermediation ◽  
Financial Sector ◽  
Financial Resources ◽  
Financial Intermediaries ◽  
Banking Institutions ◽  
Business Entities ◽  
State Pension

In today's global economy, financial intermediation is an extremely powerful source of financial resources that can be used for investment purposes, since financial intermediaries can combine temporarily free (unused in the economy) financial resources of different business entities and direct them to those sectors of the economy that need investment. At the same time, financial intermediaries simultaneously provide the movement of financial assets and contribute to the development of the economy. It is proved that the objective need for a study of financial intermediation in Ukraine is to establish such a mechanism for the redistribution of financial resources in the country in order to achieve the maximum level of development of the economy both at the micro level and at the macro level. In Ukraine, the process of reforming the economy continues, including the financial market. The main participants in the financial market are financial intermediaries, which bring together buyers and sellers of financial assets. Activities of financial intermediaries in the financial market can be characterized by the fulfillment of the following main functions: accumulation of savings of economic entities; placing of attracted financial resources in the branches of economy; obtaining profit (own, as well as other economic entities); ensuring economic development. We believe that the main purpose of financial intermediaries is to create a balance in the financial market by matching interests and needs of all participants in the financial market and balancing demand and supply on financial resources. The most common is the division of financial intermediaries into banking institutions (banking sector) and non-bank financial institutions (non-banking financial sector). Currently, in Ukraine, banking institutions are represented by universal and specialized commercial banks of Ukraine, and non-bank financial institutions are represented by insurance and financial companies, credit unions and pawnshops, non-state pension funds and trust companies. According to statistics, the banking sector is larger in terms of assets, while the number of financial market participants is dominated by the non-banking financial sector. The analysis carried out shows an increase in the role of non-bank financial institutions in the financial market. Non-financial sector entities are dominated by financial companies. The article outlines the following main problems of the development of financial intermediation entities in Ukraine: the inconsistency of the financial system of Ukraine with the real sector of the economy, as a result of which the non-banking sector of the economy is not able to fully perform its main functions; the presence in the financial market of institutions that practically do not perform the functions assigned to them, thus creating significant risks for the normal functioning of the market; Ineffective legislation and an ineffective system for overseeing the activities of financial intermediaries, which gives rise to distrust of financial institutions; low level of financial literacy of the population. In order to overcome the problems identified and to provide an effective mechanism for the functioning of financial intermediary institutions in Ukraine, it is proposed to: introduce common rules of conduct in the financial market for banks and non-bank financial institutions, but taking into account the specifics of each type of financial intermediary; to intensify activity in the financial market of investment funds, insurance companies and non-state pension funds; Maximize the attraction of the non-banking financial sector to the development of the real sector of the economy; introduce a reliable mechanism for protecting the funds of the population and business entities; to create a service consulting center for the provision of services by non-bank financial institutions. We believe that the outlined directions for solving the problems of the development of financial intermediation create the basis for its further improvement and promote the activation of their effective activity.

scholarly journals The safety network system and prospects for the appearance of a financial crisis in Bosnia and Herzegovina

2008 ◽  
Vol 53 (178-179) ◽  
pp. 198-229
Author(s):  
Novo Plakalovic
Keyword(s):  
Financial Crisis ◽  
Bosnia And Herzegovina ◽  
Financial Institutions ◽  
Banking Sector ◽  
Financial Sector ◽  
Bank Capital ◽  
Stress Tests ◽  
Foreign Countries ◽  
Potential Risks ◽  
High Level

The article is on the system of the safety network of the financial sector in Bosnia and Herzegovina (BH) and potential causes of possible financial instability. The network of protection of financial institutions in BH is to a certain extent incomplete but a high level of regulatory and supervisory activities has been present so far, which effects the expressed stability of financial institutions. Potential risks and the vulnerability of the financial system arise from a range of features which are characteristic of the local financial institutions, their activities, the condition of the BH economy, and macroeconomic stability and flows of goods and capital between the country and foreign countries. The sector of financial institutions has been privatized and it is in foreign ownership. Foreign exposure of domestic economy and financial markets is limited to only a small number of countries (Austria, Germany). There are pressures in respect of the increased rates of return on bank capital and there is a very high dynamic of credit growth. Possible unfavourable scenarios could bring about problems in the banking sector, which is shown by stress tests. The deterioration of the macroeconomic imbalance could also be a significant cause of serious problems in the local financial sector. There are no certain indicators that this could happen in the near future and influence the appearance of a financial crisis; however, such a situation cannot be ruled out.

scholarly journals The principles of the corporate governance in banks and legislation of Republic of Serbia

2020 ◽  
Vol 37 (3) ◽  
pp. 13-26
Author(s):  
Nevena Jolović ◽  
Marijana Dukić-Mijatović
Keyword(s):  
Corporate Governance ◽  
Financial Institutions ◽  
Banking Sector ◽  
Regulatory Framework ◽  
International Governance ◽  
Control Functions ◽  
Corporate Governance Mechanisms ◽  
Analysis And Synthesis ◽  
And Control ◽  
Descriptive Method

Complex relations, a frequent separation of ownership, management, and control functions in banks, as well as turbulent and changeable market conditions make responsible, fair, and transparent corporate governance mechanisms extremely important for these financial institutions. "the culture" of the corporate governance is incorporated into the banking sector of Republic of Serbia and it is based on the national legislation and international governance standards. The aim of the research is to analyze the level of the implementation of international principles of corporate governance in the Serbian banking sector and to assess the adequacy and strength of the national legal and regulatory framework to enable and support such an act. The descriptive method, an analysis and synthesis technique, as well as the analysis of the content of laws, reports, and available national and foreign literature in the field of corporate governance, were used for the preparation of this paper. The result of the research implies the confirmed assumption that the legal and regulatory framework of corporate governance in the banking sector of Republic of Serbia makes the implementation of the international principles of corporate governance possible and sufficiently supports it.

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