The Dubai Financial Services Authority (DFSA) today entered into a Memorandum of Understanding (MoU) with the Bank Supervision Department of the South African Reserve Bank.

The MoU was signed on behalf of the DFSA by Chief Executive, Mr Paul Koster, having been signed earlier in Pretoria by Mr Errol Kruger, the Registrar of Banks and Head of Bank Supervision at the South African Reserve Bank.

Mr Koster said, “The Reserve Bank regulates banking activity in the Republic of South Africa, which is a leader among the continent’s economies and has some of the most significant and well established centres for financial services activity in the region. The Reserve Bank is one of the oldest central banks in the world and it continues to play a respected role as a banking regulator regionally and internationally.

The attraction of the Dubai International Financial Centre (DIFC) as the domicile of choice for South African financial institutions in the Middle East should be enhanced by this regulatory relationship. This initiative reflects each agency’s commitment to co-operation in relation to prudential oversight and inspections. It adopts the model for information sharing developed by the Basel Committee on Banking Supervision and follows similar arrangements the DFSA has with other significant banking supervisors in the UK, Germany, France, the US, Singapore and China. It is also worth noting that the DFSA already enjoys a good working relationship with the Reserve Bank’s fellow financial regulator, the Financial Services Board of South Africa (FSB), having signed an MoU with the FSB in May 2008.

In these recently turbulent times the importance of effective coordination and cooperation between banking supervisors cannot be overstated. We are looking for better ways of working together to resolve current problems and prevent their repetition. Agreements such as this will make a difference.