The Prudential Authority has released two reports into the banking and life insurance sectors, against the backdrop of South Africa's potential greylisting by the Financial Action Task Force. If the country fails to take swift action to reduce risks, it will become a pariah in the international financial system.

South Africa poses a high risk for money laundering, terrorist financing and proliferation financing (providing funds or financial services to procure nuclear, chemical or biological weapons or their components). This is the opinion of the Paris-based Financial Action Task Force (FATF), and if the country does not put urgent and substantial measures in place by October 2022, it risks being greylisted by the international money laundering and terrorist financing watchdog before February 2023.

Greylisting would place SA on a list alongside the likes of Yemen, Burkina Faso, Albania and the Cayman Islands, which are deemed to be a risk to the international financial system, and just one notch higher than blacklisted North Korea and Iran.

That's not all: if SA is greylisted, the EU, UK, US and other FATF members are likely to refuse to do business with South African entities, which will affect the country's credit rating.

On Wednesday, 27...