Introduction
Origin and History of Banking in South Africa
The concept of banking has existed in South Africa has existed from as far back as the 1790’s with the establishment of the Lombaard bank in Cape town. There was increased European investment as a result of the discovery of substantial mineral resources in the late 19th century. But it wasn’t until the mid 20th century that South Africa experienced a massive boom in its financial sector with total financial assets being greater than GDP. This growth was hampered by disinvestment in protest of the apartheid policy introduced in 1948. But as the economy recovered from the negative impacts of the apartheid policy, the banking sector recovered as well with banking assets accounting for 139 per cent of GDP in 2008. (Mlambo, 2011)
Overview of the Banking Industry
The South African banking sector has developed considerably since the elimination of apartheid. This has been as a result of consolidation and innovation. Investment and merchant banking remains the most competitive front in the industry. The South African Reserve bank serves as the body trusted with the regulation of banking activities in the country. It acts as a Banker to the government and is responsible for provision of liquidity, implementation of monetary policy, settlement of interbank claims and bank supervision. Established by an act of parliament, it is not an independent body and is accountable to the South African government for its duties. Currently, the SA banking industry consists of 17 registered banks, 2 mutual banks, 12 local branches of foreign banks, and 41 foreign banks with approved local representative offices. (www.banking.org.za). A large percentage of banking assets in South Africa are held by...
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... indication of increased competition within the industry. This suggests that there is a positive relationship between competition and efficiency. Thus, as competition grows, efficiency increases.
Collusion is one of the effects of having an oligopolistic market structure. Thus is because having few firms with significant market share creates an incentive for them to go into agreement to exploit the market structure and increase profits. This also decreases efficiency. There is no evidence of collusion in the South African banking industry but this does not rule out the possibility of tacit collusion, where covert cooperation between banks leads to increased profitability for all involved as a result of Nash Equilibrium. Explain?
Conclusion
In conclusion,
Structure Performance Framework
Challenges of the big four banks in reaching the poor?
Elasticities
The end.
Prior to Fuller’s transfer, management at the Carson’s location was poorly run using the classical approach. While this approach can be successful, management has to find a good middle ground between caring for the company and caring about their employees. A traditional classical approach recognizes that there are five important factors to running a successful business (Miller, 19). According to text, these factors are planning, organizing, command, coordination and control (Miller, 19-20). These factors can be seen when you look at Third Bank as a whole. In the study, the CEO saw the issues in his company and put a plan together to improve. He had meetings with management, like fuller, to organize a solution. He then commanded all locations
Petersson, Lennart. Post-Apartheid Southern Africa: Economic Challenges and Policies for the Future: Proceedings of the 16th Arne Ryde Symposium, 23-24 August 1996, Lund, Sweden. New York City: Routledge, 1998.
Oligopolists are drawn in two different directions, either to compete with each other or to collude with each other. If they collude, they end up acting as monopoly and thereby maximising the industry's profits. However they are often tempted to compete with each other inorder to gain a bigger share of the profit of the industry.
Topic A (oligopoly) - "The ' An oligopoly is defined as "a market structure in which only a few sellers offer similar or identical products" (Gans, King and Mankiw 1999, pp.-334). Since there are only a few sellers, the actions of any one firm in an oligopolistic market can have a large impact on the profits of all the other firms. Due to this, all the firms in an oligopolistic market are interdependent on one another. This relationship between the few sellers is what differentiates oligopolies from perfect competition and monopolies.
It’s mandatory for all the banks to deposit a certain determined percentage of their assets with the central bank to make sure that the banks’ customer deposits are safe. These percentages are what the central bank adjusts to reduce or increase the banking lending ...
Praxis. To me, this word means the act or process of doing something to change the way in which we see the world. In this essay, the term was associated with other key terms such as liberation and education. When I envision the word liberation, freedom comes to mind. To be liberated, is to be set free from the shackles that the banking system of education has put on students. The banking system is the exact opposite example of a praxis. Students being forced to receive, memorize, and repeat the process instead of learning is not doing anything to change the way in which we see the world. In fact, it is downright blinding society and distorting student’s true meaning of the word education. In contrast, problem posing education is the perfect
There is a constant flow of cash and funds through the financial system due to the financial institutions as they assist money movement among the borrowers and lenders (lecture notes, chapter 8, 9, 15) a financial institution is basically a firm like a bank which acts as a safe house for depositors to keep their money and also provide loan with interest to others and this how they expand the institution. This is the basic concept of the way the economics works in a country and also how a bank functions. All the banks are connected to one another and if there is a problem in one of the banks the bank looses it image in the minds of the people and if it’s a big problem it can cause disaster within the financial system of the country and this can only be caused due to shortage of liquid cash. To have a proficient system the bank has to be sure to be liquid to avoid any problems. (Chapter 1) To help avoid this problem the government lays down regulations for the banks through prudential supervision (Chapter 2). The Australian regulatory power is Australian Prudential Regulation Authority (APRA), whereas in Singapore it is Monetary Authority of Singapore (MAS). The key concept of their job is to assure the people that their money is in safe hands. Keeping the capital safe is essential as it assists the bank to expand and help them pay off any debts when needed (Chapter 2). In context to if there is an emergency as the government has some control on the banks it asks them to keep some money on the ...
Binhammer, H. H. & Peter S. Sephton. Money, Banking and the Financial System. Nelson, 2001.
To test these models in collusion, bidders interact in a three-stage game and can be of type risk neutral, strong or weak. In the first stage, the strong bidders vote for or against forming a cartel and a cartel is only formed if they all agree. When they form a cartel they incur a cost. In the second stage, if a cartel is formed the strong bidders interact in a pre-auction knock-out mechanism where all bidders submit a sealed bid and the highest bidd...
New entrants to an industry, with a desire to gain market share, will put pressure on prices, costs and capital needed to compete. It can affect the profit potential.
Marks, Shula, and Stanley Trapido. "South Africa Since 1976: A Historical Perspective." South Africa: No Turning Back (1988): 1-45. Print.
Over the past 30 years the globalisation of the economy led by the World Bank, the International Monetary Fund and transnational entities have happened at a very quick pace. These institutions have pressured governments of developing countries such as South Africa to remove barriers to the cross-border flow of capital and products.
The type of firm we are going to investigate in this assignment is an oligopolistic firm. The essence of an oligopolistic market is that here are only a few sellers. As a result, the actions of any one seller in the market can have a large impact on the profits of all the other sellers. Oligopolistic firms are interdependent in a way that competitive firms are not. The company we chose to study is Petronas.
The study is primarily designed to find out the continuous issue of the banking system in
Banks sector is playing an important role in economies. The banking industry, as the classic and the most influential of financial intermediaries, facilitates economic operations. Financial sector in the worldwide country has been changes over these years by looking the changes of financial structure environment and economic conditions. Thus, banks are a very important point to financial system and play an important role as control and contribute growth to the economic sector.