placed under curatorship on 11 march 2018 in order to maintain the functioning of the bank and to promote the safety of depositors ’ funds. this intervention was deemed necessary to, among other objectives, preserve depositors ’ confidence and trust in the south african banking system. after a thorough assessment of vbs, the curator recommended that an independent review of vbs ’ s business conduct be undertaken, after which the sarb commissioned a forensic investigation into the affairs of the bank. other potentially systemic events that occurred during the reporting period included two settlement failures at domestic financial market infrastructures causing certain trades to either fail or remain in an unsettled state in the securities market. these events were reported via the financial sector contingency forum and then managed by the sarb through its interaction with market participants. a review of these settlement disruptions has been commissioned, and they will be addressed and monitored in future. globally, economic conditions continued to improve during the second half of 2017, and it appears that a broad - based cyclical recovery is underway. in january 2018, the international monetary fund ( imf ) revised upwards most countries ’ economic growth outlooks for 2018 and 2019, but also warned against possible risks to economic growth recovery, including subdued productivity, increased protectionism, higher geopolitical page 3 of 5 pressures, and the possibility of sharp financial market corrections in cases where asset valuations were overextended. institutional soundness remains a feature of the financial system in south africa. the analysis presented in this fsr confirms that banks are well - capitalised and profitable, and that they hold sufficient levels of liquidity. although impaired advances and credit impairments increased in january 2018, this was largely a result of the implementation of international financial reporting standard 9 ( ifrs 9 ). it inter alia specifies how an entity should classify and measure financial assets and liabilities and one of the fundamental changes that ifrs 9 introduces is the concept of expected credit loss ( ecl ) provisioning. this new principle replaces the current incurred losses model and has materially changed the way in which companies, and in particular banks, are required to account for impairments for credit losses. similarly, the insurance sector seems to be sound. a selection of indicators commonly used to identify macroprudential risks in the industry did not reveal any significant concerns from a systemic risk perspective despite the subdued level of economic growth and which impacts negatively on the insurance industry ’ s premium income, lapses and surrenders. pension funds

/ 2016 / sdn1606. pdf united states ( of america ) page 6 of 10 the second issue i would like to touch on has to do with innovations in the digital economy. africa in particular shows enormous potential in this area as the broader population gains increasingly more access to the internet. developments such as mobile money and e - wallets, p2p lending, alternative credit scoring, cross - border remittances as well as payment technologies leveraging digital platforms support real economic activity and contribute towards the common goal of financial inclusion. quite rightly, the t - 20 summit in beijing last year highlighted the importance of innovation as a key driver of sustained economic growth. the g - 20 has emphasised the potential role of digital finance in promoting financial inclusion in the g - 20 highlevel principles for digital financial inclusion, released in september 2016. there is widespread recognition that the fourth industrial revolution is evolving at an exponential pace, touching almost every fabric of society, with potentially significant implications for almost every sector and industry. this fourth industrial revolution and developments in digital finance hold huge potential for job creation and the promotion of small business development in emerging market and developing economies. according to the global information technology report 2016, the future of countries, businesses and indeed individuals will depend more than ever on digital technologies. this would apply equally to african countries and businesses, with the added challenge that many of those who stand to gain the most are not yet connected to the web. if we consider that africa is expected to have a population of 2 billion by 2050, with a significant proportion being young people who will need employment, it is important that we reap the economic and social benefits that the digital economy can provide. 11 the latest networked readiness index, which assesses countries ’ preparedness to reap the benefits of emerging technologies and to capitalise thereon, reports that seven countries stand out in terms of economic and digital innovation impact : finland, israel, the netherlands, singapore, sweden, switzerland and the united states. compared to 2015, south africa ’ s digital economy has jumped ten places to 65th out of 139 countries surveyed. this makes south africa one of the ten most11 baller, s., s. dutta and b. lavin ( eds. ) ( 2016 ), global information technology report 2016 : innovating in the digital economy. geneva : world economic forum page 7 of 10 improved countries, alongside italy and slovakia. but south africa is not the only