South African Regulator to Issue Basel Guidance Within Two Weeks

South Africa’s banking regulator will issue a guidance note to lenders within the next two weeks after global central bank chiefs gave four more years to meet international liquidity requirements.

Financial regulators meeting in Basel, Switzerland, on Jan. 6 delayed the full implementation of the so-called liquidity coverage ratio, or LCR, intended to curb excessive risk in the banking sector. They also expanded the list of what can be classed as high-quality liquid assets to include equities and securitized mortgage debt.

South Africa will probably follow the revised timeline, under which banks will have to meet 60 percent of the LCR obligations by 2015 with the full rule phased in annually through 2019, the Registrar of Banks Rene van Wyk said today in an e-mailed response to questions from Bloomberg.

The banking regulator will still assess the liquidity of the additional assets included under the amendments, he said. “I don’t see major benefits or issues as far as the additional high-quality liquid assets are concerned,” Van Wyk said. “Some of them may even be irrelevant in our market, but we must still assess it.”

To contact the reporter on this story: Stephen Gunnion in Johannesburg at sgunnion@bloomberg.net

To contact the editor responsible for this story: Vernon Wessels at vwessels@bloomberg.net

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