Category Archives: USA Financial Crisis

SA Statement on US credit downgrade

 

The Minister of Finance Mr Pravin Gordhan, the Governor of the South African Reserve Bank Ms Gill Marcus and members of the Financial Stability Oversight Committee recently held discussions about the possible impact of the USA credit rating down and the on-going sovereign debt concerns in Europe on South Africa’s financial stability.

 

Their joint statement, reaffirmed that “South Africa has deep and liquid financial markets which continue to function even during this difficult time of global financial turmoil. All rating agencies rate South Africa at an investment grade. Standard and Poor’s in particular, affirmed South Africa’s sovereign rating and even revised the rating outlook from negative to stable. These ratings are a testimony to our sound management of the economy, and public finances and demonstrate confidence in our fiscal consolidation measures. Our financial system remains strong, with adequately capitalised financial institutions, supported by a robust regulatory framework.”

They have sought to reassure markets, investors, the business community and economic actors that “The National Treasury and the Reserve Bank will continue to actively monitor the situation to mitigate any financial stability risks and any adverse short term and long term effects on the broader economy. We remain confident in the growth forecast and fiscal projections outlined at the time of the Budget. These will be updated in October at the time of the Medium Term Budget Policy Statement. Government will continue to implement measures to accelerate economic growth and stimulate faster job creation.” says the joint statement.

For media queries please contact Lindani Mbunyuza at National Treasury on Tel +27 (0) 12 315 5645 and Hlengani Mathebula at the SARB on +27 (0) 12 313 4210.

Download the full statement here: SA reation to US downgrade

USA Financial Crisis Inquiry Report

USA Financial Crisis Inquiry Commission Releases Report on the Causes of the Financial Crisis: This Crisis was Avoidable – a Result of Human Actions, Inactions and Misjudgments; Warning Signs Were Ignored

 

As the World Economic Forum gathers in Davos, Switzerland (26 – 30 January 2011) under the theme Shared Norms for the New Reality (reflecting  a world that is becoming increasingly complex and interconnected but also experiencing an erosion of common values and principles) in the aftermath of the global economic crisis and financial meltdown, the United States Financial Inquiry Commission (FCIC) has released and delivered the results of its investigations into the causes of the financial and economic crisis.

The Commission concluded that the crisis was avoidable and was caused by:

  • Widespread failures in financial regulation, including the Federal Reserve’s failure to stem thetide of toxic mortgages;
  • Dramatic breakdowns in corporate governance including too many financial firms acting recklessly and taking on too much risk;
  • An explosive mix of excessive borrowing and risk by households and Wall Street that put the financial system on a collision course with crisis;
  • Key policy makers ill prepared for the crisis, lacking a full understanding of the financial system they oversaw;
  • And systemic breaches in accountability and ethics at all levels.

Download the Commission’s full investigation report, summary and conclusions here:

USA Financial Crisis Inquiry Report

http://www.fcic.gov/report

USA Financial Crisis Inquiry Commission: Report Release Summary

USA Financial Crisis Inquiry Commission: Report Conclusions