The paper investigates the efficiency of the major banks of South Africa using the standard and alternative approaches to Data Envelopment Analysis (DEA). The standard DEA approach measures efficiency utilising linear averages of outputs and inputs while the alternative DEA approach utilises nonlinear averages. Individual bank efficiency scores are estimated over the period 2006 to 2012, a period that allows analysis of the efficiency of the banks during the global financial crisis of 2008 to 2009. Under both approaches the majority of the major South African banks were observed to be DEA efficient, with the alternative approach improving the efficiency scores of those banks that were DEA inefficient under the standard approach. The global financial crisis did not affect the efficiency of the majority of the banks. Since the banks were DEA efficient prior the crisis, it could be argued that their efficiency was one of the contributory factors for their resilience during the global financial crisis.
Retirement savings allow investors to earn income after retirement by saving while being part of the workforce. Retirement savings comprise the largest portion of retirement savings and should be safeguarded by effective regulation. To safeguard retirement savings, exposure to foreign asset investments is limited. However, in an emerging economy, limiting foreign asset investments, especially investment in developed markets, could hamper the potential investment returns due to the translation risk. To assess the effect of translation risk, a preservation provident fund was used in the present study to determine whether the returns of this preservation provident fund would be adversely affected by investment allocation regulation. The findings indicated how the translation effect affected the preservation provident fund, illustrating the adverse unintended consequences of investment regulation in emerging market economies. Consequently, regulators should reconsider the maximum allowed foreign asset investment in pension fund regulations to enhance investment returns from foreign asset investments.
nvestments, especially those in the bond market, carry a level of risk. Risks in the bond market can be mitigated by transacting in option contracts. In the developing South African economy, trading activity of over-the-counter (OTC) bond options decreased significantly. Possible deteriorating factors and interventions to enhance OTC bond options were investigated in this research. Experts in the OTC bond option market were surveyed and the quantitative data collected was analysed with descriptive statistical methods. Results indicated that three factors were positively identified as deteriorating factors in the OTC bond option market and that five different interventions were possible to possible enhance this market.
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