work still ahead. compounding the problem further are the implementation and monitoring processes, such as fsaps and related peer reviews to assess progress made with the implementation of internationally agreed regulatory standards by member jurisdictions. given the extensive range of regulatory reforms currently under way, south africa has since last year been calling for a consolidation phase where emphasis should be placed on the adoption and implementation of agreed international regulatory standards and greater understanding of the impact of new regulatory reforms on emerging market and developing economies ( emdes ). this call was firstly made to avoid unacceptable, uneven, and differing implementation of these new standards, thereby creating regulatory arbitrage opportunities globally, and secondly out of concern for the impact of the cost of new regulatory developments on emdes. also, given the nature of “ tenth bcbs - fsi high - level meeting for africa ” meeting, we need to alert global regulatory authorities and standard setters that there is a possibility of a widening gap between regulatory standards in advanced economies and those in sub - sahara africa, where a number of countries are only now implementing basel ii. south africa, as a member of the g - 20 and the fsb, is able to participate and, hopefully, influence formulation of policy, but unfortunately a number of our peers on the continent are not as fortunate as us and hence are denied this opportunity. south africa, therefore, welcomes the recent decision by the fsb to allow opportunities for non - fsb members to contribute to this process and it supports the monitoring processes that have been put in place. we furthermore welcome the decision not only for the reasons highlighted above, but also so that we can obtain an independent assessment of the progress that south africa has made in this regard. recent domestic developments on 1 january 2013 south africa implemented the basel iii framework. the implementation period for several of the basel iii requirements that were incorporated into the domestic banking regulations commenced on 1 january 2013 and includes transitional arrangements, bis central bankers ’ speeches which will be phased in until 1 january 2019. the purpose of the transitional arrangements is to afford banks sufficient time to meet the higher standards while still supporting lending to the real economy. south africa underwent an fsb peer and thematic review in 2013 and recently participated in an imf / world bank financial sector assessment program ( fsap ), which was finalised towards the end of 2014. the purpose of fsaps is to assess the stability of member jurisdictions ’ financial systems as a whole, and not that of individual institutions. fsaps

the us. already, denmark and canada have cut interest rates, while the proponents of interest rate increases in the uk are retreating. subsequent to the ecb ’ s announcement to fend off deflation threats through an asset - purchase programme, the swiss franc appreciated strongly, increasing the risk of falling exports and a possible contraction. in asia, the advent of abenomics raised concerns that china could respond in an effort to protect its exports market share and with its growth easing to 7, 4 per cent for the fourth quarter in 2014, the lowest in 24 years, devaluation of the chinese yuan may be considered a possible policy option. bis central bankers ’ speeches in summary, the further quantitative easing may in the short term increase global liquidity and lead to capital inflows to emerging market economies, but this may be accompanied by increased currency volatility on the back of dollar strength and in some countries weaker growth. currency devaluations flowing from quantitative easing in external markets may also have a negative impact on countries that export to those countries. currency risk, sovereign and corporate downgrades for the sub - saharan african region, the past five years of highly accommodative monetary policies in the us, europe and japan have stoked the currency risk associated with the increase in sovereign debt issuance. the persistent search for high - yielding securities presents an additional dimension of risk for african countries. backed in recent years by comparatively stronger regional growth, african nations are now able to issue billions of dollars in sovereign bonds, prompting the imf to issue a warning that too much debt in the region could derail the best economic period observed in this generation. the uptick in borrowing in the region lifted public debt to a ten - year high of 35 per cent of gdp in 2014. although such debt levels are much lower than in europe and some asian countries, the associated currency risk is significant. the cost of servicing a us dollar - denominated eurobond, issued by an african state may look cheaper than that of a debt issue in local markets, but if the relevant country ’ s currency declines, the cost of foreign borrowing could increase, thereby exerting unwelcome pressure on national budgets. this risk is more pronounced in oil - exporting countries that draw a significant portion of government revenue from their energy sectors. as an illustration, russia ’ s credit rating has been downgraded to below investment rate for the first time in a decade. a number of oil