News Worms
News Worms


Two SA banks commit to cooperation in collusion probe

Two SA banks commit to cooperation in collusion probe

A finding by the South African antitrust regulator that more than a dozen local and global banks colluded to rig foreign-currency trades will bolster government accusations that the nation's biggest lenders are monopolizing the financial system and failing to address racial inequality.

The South African Competition Commission said in a statement that it found that from at least 2007, "the respondents had a general agreement to collude on prices for bids, offers and bid-offer spreads for the spot trades in relation to currency trading involving United States dollar/rand currency pair".

ZAR is the code for the South African rand used in financial markets.

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News24 reports that a handful of South African banks, including ABSA - as if they don't have enough to worry about already -, Standard Bank and Investec stand accused of collusion and have been referred to the Tribunal for prosecution.

Further, the Commission is seeking an order declaring that 14 of the banks - Bank of America Merrill Lynch, BNP Paribas, JP Morgan Chase & Co, JP Morgan Chase Bank, Investec, Standard New York Securities, HSBC Bank, Standard Chartered Bank, Credit Suisse Group; Standard Bank of South Africa, Commerzbank; Australia and New Zealand Banking Group, Nomura International and Macquarie Bank - are liable for the payment of an administrative penalty equal to 10% of their annual turnover. This is against the Competition Act. In particular, the foreign and local private monopoly and oligopoly structure of the banking and financial sector dominant in our country must be brought to an end, by means of, among others, strongly asserting developmental state ownership and co-operative banks and financial institutions.

Global giants Barclays, JP Morgan and HSBC are among 17 banks named as part of the two-year investigation. Upon sentencing, banks affected can appeal to South Africa's Competition Appeal Court.

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"We believe collusion around South Africa's currency is treacherous and should be treated as such". An opposition party in the ANC, the Economic Freedom Fighters, is calling for all banks involved to have their licences revoked.

"Unfortunately, at this stage we still do not have further detail with respect to the nature of the investigation and are thus not able to comment on the matter", the bank told Fin24 in an emailed statement.

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