The Standing Committee on Finance welcomes the Competition Commission’s long-overdue investigation into possible banks’ collusion on the manipulation of currency trading and its decision to refer this to the Competition Tribunal for prosecution.

“Obviously, the banks have to be given a fair chance to respond to the allegations and the Tribunal needs the space to make an independent decision on the matter. But if the banks are found guilty of wrongdoing we hope the Tribunal will take appropriate strong action. After all, it’s the poor and low income earners who would have suffered disproportionately from any market abuse,” said Yunus Carrim, Chairperson of the Standing Committee on Finance.

Mr Carrim said if there has been wrongdoing, not just the banks, but the individuals responsible should be acted against. He said the Committee has noted the strong action taken elsewhere in the world, not least in the United States and United Kingdom, when similar actions of wrongdoing were proved.

The Committee is of the firm view that the Competition Commission’s investigation has reinforced the need for the finalisation of the Financial Regulation Bill before the National Council of Provinces at the moment, and other legislation to regulate the banks more effectively in the public interest.

Mr Carrim said that consideration may also have to be given to whether further regulation is required should the banks be found guilty.

“The investigation also highlights the concerns about four banks controlling about 90% of the market and the need to create space for new entrants, not least the Postbank. As soon as the Competition Tribunal has completed its work, the Finance Committee will consider the issue in a structured way, but in the meanwhile it is likely to emerge in the Committee’s public hearings on transformation of the financial sector that begin on 14 March,” said Mr Carrim.

The Committee acknowledges that banks are crucial to the economic growth and development goals of the country. It also understands that transformation of the financial sector is geared towards ensuring that the banks contribute effectively to the economic growth in their own and the country’s interests.

Mr Carrim emphasised that transformation does not mean a reckless populism that will ultimately undermine the interests of the poor and disadvantaged. He said it needs to be negotiated as far as possible.

Source: Parliament of the Republic of South Africa