The National Treasury has called for the 17 banks implicated in price fixing and market allocation to be punished‚ hoping to bring an end to such practices.
The Competition Commission on Wednesday referred Absa Bank‚ Investec‚ Standard Bank and 14 foreign banks to the Competition Tribunal following a review that found the banks to have manipulated the price of the rand by making fictitious orders to buy and sell rands to change the supply of currency.
It was also alleged that the guilty bankers were using trading chat rooms to coordinate times to buy and sell the rands.
"It should be noted that these allegations‚ if proved to be correct‚ point to poor market conduct practices at such offending institutions‚" said a statement issued by Treasury on Thursday.
"If proven to be true‚ it would confirm the pervasiveness of unbridled greed within the ranks of the forex trading sections of banks even after evidence that such behaviour has potential to collapse national and global financial systems and bring about immeasurable pain to ordinary people as evidenced by the deep recession of 2008-09 which was triggered by banks conducting their business recklessly‚" the statement said.
Treasury said it viewed these practices in "a very serious light" and would welcome any steps taken against financial institutions found guilty of wrong-doing.
- READ MORE: Banks guilty of price fixing face fines in the tens of billions‚ but will probably pay far less‚ say expertsStandard Bank could have to pay tens of billions of rands for its traders allegedly fixing the price they bought and sold rand at.
"These abusive market conduct practices highlighted the problems caused by the light-touch regulatory regime that characterized the financial sector before 2008‚" Treasury said.
"The National Treasury will ensure that both the Treasury and all financial sector regulators will support the Competition Commission in any way possible should it request such assistance. We are aware that the South African Reserve Bank is also ready to do so‚" it said.
In a statement released by the National Union of Metalworkers of South Africa (Numsa)‚ it said the banks had betrayed the people of South Africa.
"In other words‚ these institutions have been making money by betting against our rand. They have rigged the system in such a way that no matter how the currency fluctuates they always make money‚" said Numsa general secretary Irvin Jim on Thursday.
"Numsa condemns the corrupt activities of these banks. To describe it as collusion is to sanitize their reckless‚ immoral‚ corrupt and illegal activities."
The trade union once again called for radical economic transformation through nationalisation.
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