Protector mulls ‘lifeline’ decision
PUBLIC protector Busi Mkhwebane may choose not to oppose the Reserve Bank’s and Absa’s applications to set aside her remedial action for the central bank’s alleged failure to recover an apartheid-era lifeline to Bankorp.
Mkhwebane’s spokesperson, Cleopatra Mosana said: “The public protector perused the ... application and will meet the legal team and decide on whether to oppose.”
Last week, the Reserve Bank brought an urgent application to review and set aside Mkhwebane’s remedial action, in which she directed parliament to initiate a process to amend the Constitution to change the bank’s currency-protection mandate – which it conducts through inflation targeting – to one that protects the socioeconomic wellbeing of all citizens.
Mkhwebane directed Absa to pay back more than R1-billion that Bankorp, bought by Absa in 1992, received in assistance from the central bank.
On Friday, Absa CEO Maria Ramos lent her voice to the Reserve Bank’s application, saying Mkhwebane had unlawfully taken on the role of legislator in directing members of parliament. “The public protector was not authorised to do so by the constitution, or the Public Protector Act or any other law,” said Ramos.
Absa would initiate a review application of its own for the remedial action pertaining to the bank, Ramos said. The bank has 60 days to act on the public protector’s report.
Absa agreed with the contents of the Reserve Bank’s application, including its defence of the mandate to protect the value of the rand. Ramos said Absa was not told Mkhwebane was planning to change the mandate, and would have made representations to oppose such a change if it had. This would have included information similar to expert evidence it had obtained from Iraj Abedian, an independent economist.
Abedian said 26 countries had an inflation-targeting framework for their central banks, including the UK, Brazil and Canada.
It was critical for central banks to be left free of political interference to achieve their goals of credibility, predictability and accountability, he said. — TMG