Iedp 2010 Action Learning Project Regional Integration of Financial Systems

Bibliography

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COMESA Programmes. (2009). Retrieved July 30, 2010, from COMESA Customes Union: http://programmes.comesa.int/index.php?option=com_content&view=article&id=119&Itemid=73&lang=en

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ANNEXURE 1
THE PESTEL MODEL GUIDING QUESTIONS
POLITICAL QUESTIONS

1. 
   What are the envisaged political and economical policy changes in SA as a result of SADC financial system integration? How could this impact the banking sector in South Africa?
   

2. 
   Is there a political willingness to integrate?
   

3. 
   What are the dynamics (positive and negative) within the SADC region that could impact the financial integration?
   

4. 
   What factors could lead to an exclusion of some of the SADC states? Including voluntary exclusion.
   

5. 
   Sovereign monetary policy vs. Domestic momentary policy, what is the impact? Will this work for SADC.
   

6. 
   How would SADC financial system integration impact on the existing trade embargos and treaties that SADC countries have entered into with other states? What could be considered as the critical success factors and prerequisites for the SADC integration from the political perspective? Other than the ones that SADC has already defined.
   

7. 
   What are countries that are most likely to meet the pre-requisite set by SADC towards financial integration?
   

8. 
   Given the current dynamics within SADC, is financial system integration a viable move for the region?
   

9. 
   Do you think South African banks have any reasons to worry about the envisaged SADC financial integration?
   

ECONOMIC QUESTIONS

1. 
   Based on the current economic growth levels in the SADC region and within individual SADC states, is financial system integration an appropriate strategy for the region? Would it lead to economic growth and development for the region and countries within the region or could it destroy values for some of the countries?
   

2. 
   What could be the envisaged political and economic policy changes in SA as a result of SADC financial system integration? How could this impact the banking sector in South Africa?
   

3. 
   Could the financial system integration call for the alignment of both the political and economic policies in the SADC states? What could be challenges or benefits towards this alignment?
   

4. 
   How will the relaxation in exchange controls amongst SADC countries impact the South African banking sector? Positive and Negative?
   

5. 
   SADC plan is to have a single currency by 2018, in your view is this achievable given that the pre-requisites could quite be a challenge for some of the SADC countries? Which countries will more likely not qualify? What could be the implications?
   

6. 
   Could there be an envisaged impact on the SA Banks’ rating as a result of the integration?
   

7. 
   Could there be an impact on the banks’ market capitalisation and asset value as a result of the integration?
   

8. 
   The SADC integration would be a costly exercise for banks? Is there a plan to engage the shareholders, particularly ICBC?
   

9. 
   Could SADC financial integration affect the bank’s global positioning & competitiveness? If yes, how?
   
10. 
    Some of the countries in SADC have a currency that is not tradable internationally, would this be a factor?
    

11. 
    The impact to the banking sector as a result of the devalued rand? Dilution of the asset base as a result of the single currency. How will the international partners respond, Barclays for ABSA? ICBC for Standard Bank?
    

12. 
    How will the big 4 banks respond to the changes on transaction clearing as there would be more clearing house to choose from?
    

13. 
    What would be the impact as a result of an increased inflation rate, which could have impact on the repo and lending rates.
    

14. 
    Who will carry the currency risk?
    

15. 
    Can banks handle/absorb the impact, comply and qualify and defined times?
    

16. 
    Is EMV part of the requirement for the integration?
    

17. 
    How involved are the banks in the SADC financial integration planning and process.
    

18. 
    How would the SADC financial integration impact on the grading of the South African banks? And possible impact on the share prices? How could the impact be minimised?
    

SOCIAL QUESTIONS

1. 
   What would be the impact on the bank due to free movement of labour in the SADC region? Do you foresee any impact on retaining skills and knowledge?
   

2. 
   Given the potential clients can now be citizens of any SADC country, who owns the customer? What will be the impact of bank location being remote from physical customer location?
   

3. 
   What will be the impact on current customers?
   
4. 
   Given the multiplicity of languages across the SADC region, what communication policy will be adapted to target new clients in the region?
   

5. 
   What will the impact of SADC integration on Social responsibility for banks? Investing local or global?
   

TECHNOLOGICAL QUESTIONS

1. 
   Single payment system, similar to that of Europe (SEPA) or are we looking a totally different model.
   

2. 
   Information security, fraud cases and forensics. Who takes ownership, responsibility?
   

3. 
   Infrastructure – readiness of level. Who determines the standard?
   

4. 
   How is the cost determined to invest in the technology?
   

5. 
   How do we get to a decision on where this would reside, country?
   

6. 
   Clearing houses. Sufficient to cater for an integrated system. Do we need country specific?
   

ENVIRONMENTAL (business)

1. 
   How will the SADC financial integration impact the business environment for SA banks?
   

2. 
   What Expansion opportunities will the SADC financial integration bring?
   

3. 
   What opportunities does the bank see in regional and domestic competitiveness? Will the bank launch an aggressive new business acquisition strategy?
   

4. 
   Are the any other banks (apart from SA banks) in the SADC region which is considered as competition?
   

5. 
   Will Banks compromise on fees – loss of cross boarder revenue
   

LEGAL / REGULATORY

1. 
   Will this impact on policies? Fiscal, Capital requirements, Consumer laws, compliance. How will this impact on the Registrar of banks.
   

2. 
   What will happen to current regulatory authorities after integration?
   

3. 
   Post integration, will exchange controls and the monetary policy be determined by SADC, or still maintained by each participating country? Will the repo rate be centrally determined?
   

ANNEXURE 2

EURO ZONE GUIDING QUESTIONS

INTERVIEW WITH NETHERLANDS CENTRAL BANK

Objective of the interview

1. 
   In understanding the journey to the Euro Zone Integration; what would you describe as the key milestones that had to be achieved for the Euro Zone Financial Integration to be a success?
   

2. 
   How many states needed to be on board for the Euro Zone Integration to be a success?
   

3. 
   What were the qualifying criteria set for the different states? Was it the same for all the states?
   

4. 
   What were the key political considerations that needed to be taken into account during the Euro Zone Integration?
   
   1. 
      Different political agenda’s may be?
      
   2. 
      Language Issues?
      
   3. 
      Labour force?
      

5. 
   Was there governance was put in place to drive the Euro Zone Integration and for arbitration? If yes what was it?
   

6. 
   The United Kingdom; what was their main reason for not being part of the integration?
   

7. 
   Did their exclusion impact the Euro Zone Integration in anyway?
   

8. 
   What governance is now in place to ensure that the member states keep to their commitments and qualifying criteria.
   

9. 
   What would be the consequences if the member states default?
   
   1. 
      How is the issue of Greece being dealt by the Euro Zone and what has been the impact thus far?
      

10. 
    How is alignment in economic and political policies driven or enforced within the Euro Zone?
    

11. 
    Did the Euro Zone financial integration change any regulations relating to the financial sector? If so, what were the changes?
    

12. 
    Are the central bank lending rates centrally determined?
    

13. 
    How did the banking sector respond in Netherlands / Euro with regards to the Euro Zone integration? Any set demands?
    
    1. 
       What were the envisaged opportunities? Have they been realised?
       
    2. 
       What were their main concerns? How were these overcome?
       

14. 
    In reality how was the banking sector impacted in terms of the Euro Integration; in terms of the
    
    1. 
       Market; did the banks take advantage of the broader market? What could be defined as impact to banks that were already broadly operating or represented in Europe?
       
    2. 
       Competition; was the competition broadened?
       
    3. 
       Did the banking sector incur any loses as a result? Did some banks lose any value as a result? Any changes on the market share?
       
    4. 
       Cost of Integration; what was the cost of integration in terms of the information systems and infrastructure (Both for the financial sector and the central banks)?
       

15. 
    In your view is the Euro Zone Integration working for the financial institutions; Netherlands in particular?
    

ANNEXURE 3

INTERVIEWS HELD

#	Interviewee	Organisation	Title
1	Mike Turner	Standard Bank Africa	Operations director
2	Joleen Young	Standard Bank Africa	Manager Payment Business Systems
3	Charl Ackerman	Standard Bank Africa	Manager Payment Business Systems
4	Brian Le Sar	Standard Bank Africa	Director Card and Payments
5	Ballim Goolam	Standard Bank Group	Group Economist
6	Arthur Cousins	Private – Former Director Standard Bank	SADC Financial Integration Consultant
7	Juliet Kanuki	South African Banking Association	General Manager Banking Financial Services
8	Stuart Grobler	South African Banking Association	Senior General Manager Banking Financial Services
9	Paul Sitotombe	Standard Bank Africa IT	Head of Solution Design
10	Michael van	Central Bank Netherlands	Director Policy Making
11	Project Manager SEPA	Central Bank Netherlands	Project Manager SEPA
12	Gops Pillay	South African Reserve Bank	Project Manager SADC Financial Integration

Glossary

#	Abbreviation	Definition
1	BIC	Bank Identifier Code
2	CMA	Common Monetary Area
3	COMESA	Common Market for East and Southern Africa
4	EAC	East African Community
5	ECB	European Central Bank
6	ECCU	Eastern Caribbean Currency Union
7	ECOWAS	Economic Community of West African States
8	EMI	European Monetary Institute
9	EMU	European Monetary Union
10	ERM II	Exchange Rate Mechanism
11	EU	European Union
12	EUN	Economic union
13	FIP	Finance and investment protocol
14	FTA	Free trade area
15	GDP	Gross Domestic Production
16	IBAN	International Bank Account Number
17	MEC	Macro-economic Convergence
18	MENA	Middle East and North Africa
19	MUN	Monetary union
20	PTA	Preferential trade agreement
21	REC	Regional Economic Community
22	RISDP	Regional Indicative Strategic Development Plan
23	SADC	Southern African Development Community
24	WAMZ	West African Monetary Zone

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