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

may also be problematic for several reasons. the riksbank ’ s repo rate is and should preferably be a blunt instrument that affects the entire economy, that is the households, the companies and the financial markets. it is not desirable for monetary policy to have a disproportionally large impact on a limited part of the economy, in this case on the indebted households. one should not expect that monetary policy will always be designed so that it is well balanced for just this particular part of the economy. this is exemplified by the monetary policy of recent years in which the repo rate has been set lower than justified by developments on the mortgage market. in the future, we may well end up in the opposite situation with the repo rate being set higher than justified by this particular part of the economy. longer fixed - rate periods desirable it is difficult to determine how large a proportion of variable interest rates is desirable in an economy, but i suspect that we have gone too far in that direction in sweden. and by this i mean from the point of view of systemic risk. for an individual household there may be good reasons for choosing a variable interest rate, but for the economy as a whole it would probably be good if we could limit the proportion of variable rates. this can be achieved in different ways. in some countries, regulations have been used to either limit how large a proportion of the mortgage may have a variable interest rate or how much a variable interest rate may increase during the maturity of a mortgage. in other countries, long fixed - rate periods have become the norm without the need for regulations. the fact that this has not happened in sweden indicates that the financial markets are not working well enough for some reason. this may, for example, be due to the lack of a market for mortgage bonds at really long maturities, or of regulations concerning how mortgages with long fixed - rate periods can be paid off prematurely. limit the build - up of debt despite the need to stimulate the economy i would also like to say something about the interplay between current monetary policy and measures to mitigate the risk factors i have mentioned. is it really justified to introduce measures that may dampen household consumption or activity on the housing market when the riksbank is at the same time trying to stimulate the economy in order to increase several studies based on household data from the financial crisis of recent years show that highly - indebted households reduced their consumption more than households with low debts (