the first time, effectively deal with management deficiencies in banks. the proposed legislation will, among other things, provide for the removal by the regulator of directors and managers of banks who are not considered to be fit and proper to perform such appointments. these improvements to the regulation of banking are being undertaken to safeguard the funds of depositors and to ensure that south africa maintains a recognised, stable banking system. however, the bank is also aware of the need to broaden the access of individuals and small and medium - sized enterprises to basic banking services and funding. to this end, the approach in the past was to encourage registered banks to provide such services and to exempt certain approved non - bank financial institutions, such as stokvels, credit unions and village financial services co - operatives, from the requirements of the banks act provided that these institutions comply with certain specified conditions. work is now in progress to reform the mutual banks act by making provision for different classes of banks. this would create a more appropriate regulatory framework and give broader access to finance. the bank also supports all initiatives aimed at finding a balance between facilitating socially responsible behaviour by banks and protecting the stability of the banking sector. internal administration in view of the importance of maintaining an overall stable financial environment, a financial stability department was established in the reserve bank. the primary aim of this department is to assess and promote the stability of the banking and financial system in south africa. the main functions of the new department are to identify, analyse and research any potential threats to and weaknesses in the financial system, and to make policy proposals on and encourage changes that will support the stability and effectiveness of the financial system. another administrative change arose from the majority decision by shareholders to delist the bank from the jse securities exchange sa, with effect from 2 may 2002. the new listing requirements of the jse securities exchange sa as well as the unique role and structure conferred on the south african reserve bank in terms of its act, made it evident that the bank would no longer be able to trade its shares on this exchange. the shareholders ’ decision led to the establishment of an over - the - counter share transfer facility on 3 june 2002, to provide for trading in the bank ’ s shares. this facility operates as a closed auction and is administered by the bank. satisfactory progress has been made with a process of bank - wide business continuity planning to ensure that the bank can continue functioning and meeting its obligations in the event of any interruption or disaster. all the bank

the financial system that could result from problems with an fmi, an operator of an fmi, or a participant of an fmi that threaten the stability of, or confidence in, the whole or a significant part of the financial system ; and c. promote the confident and informed participation of businesses, investors, and consumers in the financial markets ; and d. promote and facilitate the development of fair, efficient, and transparent financial markets. resilience as a pathway to prosperity unclassified unclassified 2. those purposes are to be achieved by — a. establishing a system for designating systemically important fmis and fmis that apply for designation ; and b. imposing regulatory requirements on designated fmis ; and c. providing for the supervision of compliance with those requirements by the reserve bank of new zealand and the financial markets authority ( acting as the regulator ) ; and d. conferring certain powers on the regulator to gather information ; and e. conferring certain powers on the regulator to act in respect of distressed fmis. 3. see also section 77 ( which sets out the purposes for which the regulator ’ s powers under part 4 may be exercised ). resilience as a pathway to prosperity unclassified unclassified appendix b – definitions of financial stability across the world bank of korea [UNK] europe central bank ( ecb ) [UNK] “ financial system stability refers to a state in which the financial system functions properly, and participants, such as firms and individuals, have confidence in the system. ” deutsch bundesbank [UNK] “ financial stability is a key prerequisite for the functioning of a national economy and for the effective implementation of monetary policy. a stable financial system can be defined as a system whose individual components — financial intermediaries and the financial market infrastructure — fulfil their respective functions and prove resistant to potential shocks. ” bank of japan [UNK] “ a stable financial system is one in which financial intermediaries, markets and market infrastructure facilitate the smooth flow of funds between savers and investors and, by doing so, help promote growth in economic activity. ” swiss national bank [UNK] “ a stable financial system is one that has sufficient resilience to be able to facilitate and supply vital services by financial institutions, markets and market infrastructure to households and businesses, in a manner that absorbs rather than amplifies shocks. ” reserve bank of australia ( in line with the australia ’ s council of financial regulators ) [UNK] “ a financial system is considered stable when