When being greedy is what you’re paid for
No one likes banks, and there are many excellent reasons for that. Banks in South Africa have, however, become the target of a special vitriol tied to a very specific political project – unrelated to the real problems they present to the public through over-concentration and, it seems, collusion.
You may very well agree that the Big Four (among other banks) have conspired against President Jacob Zuma’s friends to serve white business. You may also believe that Absa owes us an apartheid-era debt.
On the other hand, you might be in the camp that believes the South African banking system is nearly the only thing we have been able to get right economically.
Right now, we all have to be careful not to conflate these beliefs with what we will learn as the Competition Tribunal’s hearing of its latest case drags on.
The seemingly well-grounded allegations of collusion between currency traders at local and international banks will not be resolved soon.
Codes of conduct will get drafted and, more likely than not, a settlement of some sort will be signed to avoid rival economists at the tribunal arguing about the nature of foreign exchange markets for decades to come.
Big numbers will be thrown around and disputed, but the outcome that matters is fixing the problem at its root.
Collusion is wrong, period. The allegations revealed this week underscore the fact that the impersonal markets that some believe have magical virtues are actually made up of men and women who have no magical virtues.
Already, banks are blaming the individual traders involved. But the traders have done exactly what they have been paid – handsomely – to do by chasing million-rand bonuses.