Confidence in banking is hard-earned and easily shocked. This makes individual banks and the banking sector susceptible to knock-on effects from other institutions.
The deliberations were characterised by disingenuous, counter-factual policy pronouncements, and de facto denials of the ANC’s culpability in causing many of the current problems facing the country.
Central banking was given to technocrats whose job is to make the difficult decisions. But there are parameters. And within these, central bankers must act independently, without fear or favour.
The challenge to deliver a persuasive speech comes firstly in the context of intense doubts as to whether President Ramaphosa is truly in charge of the ANC.
Ramaphosa’s detractors are unlikely to succeed in their rumoured bid. And, their failure will not be because they’ve suddenly become weak within the administration.
The debate about the mandate of the South African Reserve Bank must be located within a clearly articulated political vision and social compact on the kind of society South Africans aspire to.
Ramaphosa offered five simple yet bold goals for the next ten years that cut across the social and economic structural constraints that inhibit South Africa’s potential.
Most South Africans think prices are rising much faster than is actually the case. This makes the central bank’s job of managing inflation expectations much harder.
One of the main lessons from the VBS Bank collapse in South Africa is that audit reports need to be treated with a degree of circumspection. In some cases they will require independent verification.
Instead of having a separate regulator just for banks, the new system creates one to prevent financial crises, the other to ensure good market conduct and consumer protection.
A change in the ownership of the South African Reserve Bank from private shareholders to government shouldn’t impact the constitutional mandate of the central bank in any way.
Distinguished Professor and Derek Schrier and Cecily Cameron Chair in Development Economics, School of Economics and Business Sciences, University of the Witwatersrand