Reap­point­ment of Kuben Naidoo en­sures con­ti­nu­ity

Business Day - - FRONT PAGE - Lyn­ley Don­nelly Eco­nom­ics Writer

Kuben Naidoo has been reap­pointed as a deputy gov­er­nor of the Re­serve Bank for a sec­ond term, a move praised for en­sur­ing sta­bil­ity and con­ti­nu­ity at a time of un­prece­dented cri­sis for the econ­omy.

In ad­di­tion to his role as deputy gov­er­nor and mem­ber of the in­ter­est rate set­ting mone­tary pol­icy com­mit­tee (MPC), Naidoo was also re­tained as CEO of the Pru­den­tial Au­thor­ity, which is re­spon­si­ble for reg­u­lat­ing the coun­try’s fi­nan­cial in­sti­tu­tions.

The Bank’s an­nounce­ment on Wed­nes­day that Naidoo will start a sec­ond five-year term on April 1 comes as global and lo­cal fi­nan­cial mar­kets have been thrust into tur­moil by the on­slaught of the Covid-19 pan­demic.

“It’s an ex­cel­lent ap­point­ment that helps en­sure sta­bil­ity and con­ti­nu­ity,” said Jan­nie Ros­souw, in­terim head of Wits Busi­ness School and a former of­fi­cial at the cen­tral bank.

The ap­point­ment has come dur­ing a tu­mul­tuous pe­riod for lo­cal mar­kets, with the Bank tak­ing ag­gres­sive steps to ease the pres­sure in the fi­nan­cial sys­tem, in­clud­ing a 100-ba­sis-point cut in the repo rate last Thurs­day — the first cut of this mag­ni­tude in more than a decade.

It also stepped up mea­sures to im­prove liq­uid­ity and said on Wed­nes­day that it would buy govern­ment bonds in the sec­ondary mar­ket.

Bank gov­er­nor Le­setja Kganyago and the three deputies con­sti­tute the ex­ec­u­tive man­age­ment of the Bank. The gov­er­nor and deputies are ap­pointed by the pres­i­dent, af­ter con­sul­ta­tions with the min­is­ter of fi­nance and the Bank’s board of di­rec­tors.

The Pru­den­tial Au­thor­ity is re­spon­si­ble for reg­u­lat­ing the bank­ing sys­tem, in­sur­ance com­pa­nies, fi­nan­cial con­glom­er­ates and cer­tain mar­ket in­fra­struc­tures. It came into be­ing with the launch of the “twin peaks” model of reg­u­la­tion, which was im­ple­mented to re­form over­sight of the fi­nan­cial sec­tor.

Naidoo — who was es­sen­tial to the Pru­den­tial Au­thor­ity’s es­tab­lish­ment in his former role as the regis­trar of banks — will be­gin his sec­ond term as its CEO on April 1.

In re­cent days the Bank has been in dis­cus­sions with SA’s largest lenders over the re­silience of the fi­nan­cial sys­tem, with a num­ber of large banks an­nounc­ing mea­sures such as re­pay­ment holidays for small busi­ness and stu­dent loans to aid them through the Covid-19 cri­sis.

Naidoo’s reap­point­ment fol­lows the pro­mo­tion of Fundi Ts­haz­ibana, for­merly an ad­viser to the gover­nors, and Rashad Cas­sim, who pre­vi­ously headed the re­search department, as deputy gover­nors in July 2019.

Daniel Mminele left the Bank af­ter his sec­ond term as deputy gov­er­nor ended in June 2019 and was ap­pointed Absa CEO in Jan­uary.

Naidoo has pre­vi­ously served

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