Original Research

Implementing the countercyclical capital buffer in South Africa: Practical considerations

Pravin Burra, Pieter Juriaan de Jongh, Helgard Raubenheimer, Gary van Vuuren, Henco Wiid
South African Journal of Economic and Management Sciences | Vol 18, No 1 | a956 | DOI: https://doi.org/10.4102/sajems.v18i1.956 | © 2015 Pravin Burra, Pieter Juriaan de Jongh, Helgard Raubenheimer, Gary van Vuuren, Henco Wiid | This work is licensed under CC Attribution 4.0
Submitted: 11 March 2014 | Published: 04 March 2015

About the author(s)

Pravin Burra, Deloitte and Touche, South Africa
Pieter Juriaan de Jongh, North-West University, South Africa
Helgard Raubenheimer, NWU, South Africa
Gary van Vuuren, NWU and Fitch Ratings, South Africa
Henco Wiid, Deloitte and Touche, South Africa

Full Text:


Share this article

Bookmark and Share


The Basel II regulatory framework significantly increased the resilience of the banking system, but proved ineffective in preventing the 2008/9 financial crisis. The subsequent introduction of Basel III aimed, inter alia, to supplement bank capital using buffers. The countercyclical buffer boosts existing minimum capital requirements when systemic risk surges are detected. Bolstering capital in favourable economic conditions cushions losses in unfavourable conditions, thereby addressing capital requirement procyclicality. This paper contains an overview of the countercyclical capital buffer and a critical discussion of its implementation as proposed in Basel III. Consequences of the buffer's introduction for South African banks are explored, and in particular, potential systemic risk indicator variables are identified that may be used by the South African Reserve Bank (SARB) as early warning indicators of imminent systemic financial distress. These indicators may be of value to the SARB, which could use them in taking decisions on the build-up and release of the countercyclical buffer for South African banks.


No related keywords in the metadata.


Total abstract views: 1605
Total article views: 1712


Crossref Citations

1. A review of accounting research in internationalising journals in the South African region
Charl J. De Villiers, Pei-Chi K. Hsiao
South African Journal of Economic and Management Sciences  vol: 20  issue: 1  year: 2017  
doi: 10.4102/sajems.v20i1.1729