‘AnewmacroprudentialpolicyframeworkforSouthAfrica’TheSouthAfricanReserveBank(SARB)hastoday,9November2016,published forpubliccommentadiscussiondocument, AnewmacroprudentialpolicyframeworkforSouthAfrica.The discussion paper outlines the SARB’s proposed approach to executing its financial stability policy mandate. It discusses the institutional structure, the objectives of macroprudential policy, and the decision-making process to be applied in the process of activating macroprudential instruments. It also describes a range of possible instruments to be used in mitigating systemic risk.Correspondence regardingtheconsultationshouldbeaddressedto:Head: FinancialStabilityDepartmentSouthAfrican Reserve BankP OBox427Pretoria 0001Tel.+27123133601E-mail:SARB-MacroPru@resbank.co.zaThe closing date for enquiries, suggestions or comments on this document is 31 January 2017.Whenresponding,pleasestateyouraffiliationorwhetheryouaredoingsoinyour personalcapacity.Pleasenotethatasummaryofresponsesmaybepublished unless respondents explicitlyrequest otherwise. BackgroundSouthAfricalaunchedaformalreviewofitsfinancialregulatorysystemin2007, resultinginanumberofpolicypapersandculminatinginseveraldraftsofthe FinancialSectorRegulationBill(FSRBill)beingpublished.TheFSRBill assignsprimaryresponsibilitytotheSARBforprotectingandenhancingfinancial stability,andseekstoensurecooperationbetweenregulatorsinpursuingthe stabilityof thefinancialsystem.                   Macroprudential policy refers to policies aimed at mitigating risks to the financial system as a whole (systemic risk). Systemic risk refers to the risk of the disruption to the provision of financial services with serious consequences for economic activity. Systemic risks can be cyclical or structural. Cyclical risks are those that build up over time, for example a boom in the availability of credit and asset price bubbles, and bursts at a certain point. Structural risks refer to those risks that arise from the interconnectedness of the financial sector companies and the resultant spread of risks across the financial system as a whole.  Financial stability is not an end in itself but, like price stability, is generally regarded as an important precondition for sustainable economic growth, development and employment creation. Financial stability refers to a financial system that is resilient to systemic shocks, facilitates efficient financial intermediation and mitigates the macroeconomic costs of disruptions in such a way that confidence in the system is maintained.