HILARY JOFFE: Crisis exemptions an opportunity for better competition policy

05 April 2020 - 05:03 By

There has been plenty of interaction between bankers and their regulators at the Reserve Bank and Treasury since the current crisis began, but a meeting this week was unusual - it was the first time the CEOs of SA's big banks have sat as a group with the regulators to discuss measures to assist customers and maintain the stability of the system through the crisis. And it was possible because of the block exemption signed by trade & industry minister Ebrahim Patel to enable collaboration to manage the crisis and minimise its negative impact.

Patel has signed similar "concerted conduct" exemptions for the hotel industry, retail property landlords and - most notably - in the health-care sector, to enable hospitals, laboratories, pharmacies, doctors and health-care funders to work with each other and the public health sector to co-ordinate and allocate the resources critical to containing the pandemic. It's a huge irony, and one can't imagine Patel enjoyed the signing. A few large players dominate most of these sectors. Patel's signature contribution as a minister has been his concerted effort to curb the power of dominant players and tackle the high level of concentration in the economy. But these are unprecedented times. The crisis will surely change the landscape in at least three areas, prompting fresh questions about competition and anti-trust policy...

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