an address by francois groepe, deputy governor of the south african reserve bank, at the actuarial society banking seminar the maslow hotel, sandton 2 august 2017 bank - wide stress testing as a risk management tool members of the actuarial society, ladies and gentlemen. thank you for the invitation to address you at this third actuarial society banking seminar. the south african reserve bank ( sarb ) would like to congratulate the actuarial society of south africa on its efforts to build expertise in banking – and on becoming a world leader in this regard. your initiative to introduce a banking fellowship coupled with allowing actuaries to qualify as banking actuaries is commendable and could make important contributions to improving the resilience and stability of the domestic banking sector. my address today will focus on stress testing and how it is being applied as a risk management tool. i would also like to share the progress the sarb has made and the methodologies it has applied in its approach to stress testing the south african banking sector. stress testing forms part of the macroprudential monitoring framework applied by the sarb in fulfilling its now - expanded mandate of protecting and enhancing financial stability, in addition to its price stability mandate. as you are all aware, the mandate of the sarb, specifically its primary objective and independence, as entrenched in the constitution, has come into sharp focus recently. the primary objective of the sarb is stated in the constitution : “ protect the value of the currency in the interest of balanced and sustainable economic growth. ” this objective and the independence page 1 of 9 provided to the sarb in the constitution can only be changed by a two - thirds majority of the members of parliament ; thereafter any such change would need to be ratified by the constitutional court. in this way, the courts protect the sarb against any unlawful encroachment of its independence. furthermore, the notion of a central bank as a public institution, with the goal of promoting monetary and financial stability in the interest of the general public, is remote from the traditional concept of a commercial company with a profit motive. central banks have been structured by their respective governments to suit publicinterest ends. the shareholding structures have been retained in some cases, including by the sarb and in various others, such as the central banks of belgium and switzerland. but the inconsistencies with the shareholding of private companies necessitated a realignment of the rights and powers of shareholders

to explore the areas where we can work together to build a stronger nation. but actions speak louder than words. we call on the philippine business community to take a bigger stake in the country ’ s development. … build on the reform platform and favorable economic environment that we have worked hard with the government to create by taking the next steps where entrepreneurial dynamism drives greater economic gains. in summary, economic and fiscal achievements in 2006 have created a positive momentum for our country. a consistent implementation of reform measures by the government, particularly in the area of revenue generation and debt and expenditure management, coupled with a stable monetary environment and healthy banking sector, will support the government ’ s fiscal, growth and other macro and microeconomic targets for 2007. the tide is rising and i believe it will continue to do so for some time. now we must all row together in the same direction to ensure steady progress and a forward direction, even if the currents try to move us in a different direction or hinder our forward progress. we have a unique opportunity to make sure the tipping point lifts the boat, not tips it over. i am confident we are sailing in the right direction. thank you.