Workshop on Global Financial Reform and its effect on SACU Trade in Financial Services

The workshop examined how global financial regulatory shifts following the 2008 crisis affect Southern Africa. While South Africa dominates the regional financial services market, the adoption of Basel III—driven by South Africa's G20 membership—may create new barriers to trade by increasing capital requirements for riskier assets, potentially reducing funding for infrastructure and cross-border lending in the region. Discussants highlighted regulatory failures at national, governance, and global levels, noting that while some reforms are irrelevant to smaller SADC nations, the dominance of South African banks ensures these global standards are transmitted regionally. The report suggests that SADC countries face significant capacity gaps in macro-prudential supervision and non-bank regulation, proposing regional cooperation or a common regulator as a viable alternative to individual national efforts.

• The global financial crisis was driven by macro-economic imbalances, loose monetary policy leading to asset price bubbles, excessive leveraging via pro-cyclical regulation, and a non-transparent derivatives market.
• Basel III reforms aim to strengthen capital and liquidity requirements, create a safer framework for subprime assets, and supervise OTC derivatives and financial conglomerates to prevent regulatory arbitrage.
• Basel III is expected to make long-term infrastructure loans, mortgage loans, and equity-related exposures more expensive for banks to hold, potentially shifting investment bank focus toward short-term financing.
• The financial crisis significantly impacted regional growth; Botswana's real GDP growth fell to 2.9% by the end of 2008 from a previous high of 10%, and South Africa entered a recession in 2009 with exports dropping 24% in Q1.
• South Africa is a net exporter of financial services in the region, with banking assets representing 120% of GDP and insurance penetration at 16% of GDP, the highest globally as of 2007.
• G20-driven reforms may create trade barriers in Africa by increasing capital requirements for riskier prospects, reducing the appetite for infrastructure financing, and favoring better-rated countries.
• SADC countries face a heavy supervisory burden due to the shift toward macro-prudential regulation, for which central banks often lack the necessary skills, such as performing stress tests.
• There is a lack of formal mechanisms for information sharing regarding cross-border financial conglomerates; for instance, while South African banks operate in 17 African countries, the South African Reserve Bank (SARB) has MOUs with only two.

APA

Thomas, R. (2010). Workshop on Global Financial Reform and its effect on SACU Trade in Financial Services. South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2010/08/dttp_workshop_report_global_financial_crisis_and_sacu_20100831.pdf

Chicago

Thomas, Ros. Workshop on Global Financial Reform and its effect on SACU Trade in Financial Services. South African Institute of International Affairs, 2010. https://saiia.org.za/wp-content/uploads/2010/08/dttp_workshop_report_global_financial_crisis_and_sacu_20100831.pdf.

Wikipedia

{{cite report |last1=Thomas |first1=Ros |title=Workshop on Global Financial Reform and its effect on SACU Trade in Financial Services |publisher=South African Institute of International Affairs |date=31 August 2010 |url=https://saiia.org.za/wp-content/uploads/2010/08/dttp_workshop_report_global_financial_crisis_and_sacu_20100831.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{thomas2010workshop, author = {Thomas, Ros}, title = {{Workshop on Global Financial Reform and its effect on SACU Trade in Financial Services}}, institution = {South African Institute of International Affairs}, year = {2010}, month = aug, url = {https://saiia.org.za/wp-content/uploads/2010/08/dttp_workshop_report_global_financial_crisis_and_sacu_20100831.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }