Hold currency fixers to account

THE Competition Commission’s revelation of currency fixing by major banks exposed a litany of corruption in the financial sector that eluded the Financial Services Board (FSB) for years.

It’s obvious that the banks are going to wage a protracted legal battle, challenging the findings to buy time for the storm to subside.

Of course the law allows such manoeuvring at the cost of the litigants, despite being a foolish waste of time.

For all practical reasons, with general elections around the corner, this calls for Parliament to convene a parallel process and call on the FSB to explain how the collusive arrangement slipped out of a frontier control under its watch.

It may come to light that the FSB was aware of the currency manipulation but members abdicated their fiduciary responsibilities to raise an alarm, making it possible for the fixing practice to pass scrutiny.

The practice clearly undermined the stability of the financial system and the ability of the regulator to crack the whip in the foreign exchange market.

With all of this in mind, Parliament is duty-bound to demonstrate a greater oversight role in addressing and finding solutions to the collusive dealings in the financial markets.

The aftermath of this process should also involve the implementation of more stringent regulations as well as reforms to the FSB so that it becomes a financial services commission with teeth and is brought into line with the Competition Commission.

We hope ratings agencies will review their impact analyses of South Africa’s credit outlook with nothing short of a disclaimer with regard to the banks’ undisclosed manipulation of the international currency markets.

The point is that it’s corruption.

Undermined the stability of the financial system

Vosloorus, Ekurhuleni