The Financial Stability Department gives effect to the SARB’s financial stability mandate by (i) identifying and monitoring existing and emerging risks (both domestically and internationally) that could negatively impact domestic financial stability; (ii) developing and recommending policy options for mitigating these risks; and (iii) minimising the impact of disruptions. In doing so, the Financial Stability Department conducts research on financial stability issues to, among other objectives, (i) better understand the build‑up of imbalances in the domestic financial system; (ii) understand exactly how such imbalances could lead to systemic disruption if acted upon by a shock; (iii) inform macroprudential policymaking; and (iv) effectively communicate the results of ongoing research to internal and external stakeholders.

The Financial Stability Department supports macroprudential policymaking by tabling policy proposals at FSC meetings that are aimed at mitigating vulnerabilities in the domestic financial system. However, any policy recommendations made to the FSC must be strongly grounded in robust research that clearly sets out the rationale and supporting evidence for the relevant policy recommendation. Members of the FSC, Financial Stability Oversight Committee (FSOC) and/or Financial Sector Contingency Forum (FSCF) may also identify areas of risk or vulnerability that require deeper research to appropriately inform a policy response. From a communications perspective, the FSR draws on discussions in FSC, FSOC and FSCF meetings, as well as insights from financial stability‑related research conducted by the Financial Stability Department.