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Prudential Authority


The Prudential Authority is tasked, amongst other things, with the promotion of the safety of depositors’ funds and the interests of members and beneficiaries of financial institutions.  This function is essential in ensuring that confidence and trust in the South African financial system is retained.
Certain measures are necessary for maintaining continuity of the vital economic functions of financial institutions, which is often in the interests of financial stability. The tools that the Prudential Authority has at its disposal through the applicable financial sector laws include early intervention of problem financial institutions. These regulatory interventions may, amongst other things, result in increased capital requirements or agreed restructuring arrangements. In some instances, however, it may be necessary to place a financial institution under curatorship.
The process of establishing and refining the legislation, policies and other legal instruments necessary to effectively manage a financial crisis as well as to affect the orderly resolution of failing financial institutions is on-going. Current developments in this regard include the design of a resolution framework and the establishment of a deposit insurance scheme for South Africa.
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