global financial sector are of a macroeconomic nature. these relate to the potential effects of higher interest rates, a turn in the credit cycle and, possibly, associated declines in real estate prices and aggregate expenditure. the current global environment places a premium on system - wide risk management. the report highlights the importance of making available information about risk as well as the interplay, and need for consistency, between financial reporting standards, risk management practices and the overall prudential framework. the south african financial sector is also exposed to these risks and the planned implementation of basel ii by south african banks will strengthen reporting standards and market discipline. 6. the south african banking industry the south african banking system is sound and stable. banks are well capitalised, and the average risk - weighted capital - adequacy ratio for the banking system as a whole was 12, 3 per cent at the end of july 2006. growth in the total balance sheet of banks remained strong during the past year and by the end of july 2006, the total assets of banks – comprising, amongst other things, money, loans and advances, investment and trading position and non - financial assets – had increased by 20 per cent year - on - year, to a level of r1 939, 5 billion. by the end of july 2006, the south african banking sector had recorded year - on - year mortgagelending growth of 30, 8 per cent to a level of r608, 9 billion. this growth was due to a number of factors including lower mortgage - interest rates, a lower level of inflation, lower income - tax rates and an increase in the real disposable income of households. there was also an increase in speculative buying, known as the ‘ buy - to - let ’ boom. real estate prices are currently experiencing a slow - down in growth, which suggests some strong resistance from consumers. consumer spending through credit card lending has recorded year - on - year growth of 38, 6 per cent to a level of r36, 9 billion at the end of july 2006, while the growth in installment - sales debtors has also continued unabated, growing by 18, 8 per cent, to a level of r201, 6 billion over the same period. as the regulator of banks, the bank supervision department of the south african reserve bank will continue to ensure that banks ’ risk - management processes are appropriate for monitoring these activities in the light of increasing household sector indebtedness and the increasing cost

out differences in living conditions. germany has this in the form of horizontal financial equalisation among the federal states [ landerfinanzausgleich ], as well as transfer payments to the states of former east germany, which are financed by the solidarity surcharge [ solidaritatszuschlag ]. it may well be that one day the political will considers fiscal transfers between the member states of the euro area necessary and desirable. however, that would then require a change conclusions of the presidency, european council in copenhagen, http : / / www. consilium. europa. eu / uedocs / cms _ data / docs / pressdata / en / ec / 72921. pdf. see the opinion of advocate general cruz villalon on case c - 62 / 14, peter gauweiler, et al. and fraktion die linke im deutschen bundestag v deutscher bundestag ( request for a preliminary ruling from the bundesverfassungsgericht ( germany ) ) delivered on 14 january 2015, paragraph 38 ff. bis central bankers ’ speeches 21 – 22 june 1993, to the european treaties. there is no provision for a transfer union in the current treaty. and whether you like it or not, that applies to the front door as well as the back door. this is something which those who call for more ( financial ) solidarity must realise. more solidarity within europe in this sense would also require more european control. but we don ’ t yet have a “ euro area parliament ” with the democratic legitimation for this, or a supranational budget worthy of this name. at the moment i see correspondingly little willingness from national parliaments to relinquish their budgetary powers in order to centralise them at the european level. the flipside of this coin, however, is that member states, with their own national budgets, have disproportionately more individual responsibility. even without financial transfers, there must be reasons why it is more attractive for member states to be part of the monetary union than to stay outside it. in addition, they must be better off in the euro area than out. in concrete terms, membership of the euro should bring more stability and prosperity. in this respect, the monetary union has already taken considerable steps towards integration. but a common internal market and a single monetary policy alone is not enough to achieve this in the long run. with strict