President of the African Transformation Movement (ATM) Vuyo Zungula formally lodges a request for the institution of a Commission Of Inquiry Into Rand Manipulation by major banks in South Africa.
Dear President Ramaphosa,
I trust this letter finds you well. On behalf of the African Transformation Movement (ATM), we write to bring to your attention a matter of paramount importance that pertains to the economic stability and integrity of our nation.
The recent revelations by the Competition Commission regarding the collusion among 28 South African and international banks to manipulate the rand/dollar currency valuation have raised grave concerns. The implications of this misconduct, affecting various sectors of the economy, are substantial and demand immediate and thorough attention.
The impact of this misconduct extends far beyond economic indicators, reaching into the lives of ordinary South Africans. Accelerated home and car repossessions, an escalation of interest rates, cases of severe depression, and, tragically, instances of loss of life due to overwhelmed citizens engulfed in debt underscore the profoundly human toll of these manipulations.
Regrettably, the regulatory bodies, including the South African Reserve Bank (SARB), the Financial Sector Conduct Authority (FSCA), and others, seem to have fallen short in their duty to prevent and address such gross misconduct. The absence of effective oversight during the period between 2013 and now, a period that is beyond the scope of the Competition Commission’s investigation and focus, raises concerns about whether similar malpractices persist, further jeopardizing the well-being of our citizens.
Moreover, the collusion potentially violates various legislative frameworks and other crucial regulations meant to safeguard the rights and interests of South African consumers. The absence of assurance that these practices have ceased only heightens the urgency for a thorough investigation.
In addition to these concerns, the ATM wishes to draw attention to the insidious practice of racial profiling in the determination of interest rates offered to citizens. If substantiated, this discriminatory approach has severe implications, perpetuating economic disparities and hindering the financial progress of historically disadvantaged communities. Such profiling not only exacerbates existing inequalities but also violates the principles of fairness and equality enshrined in our democratic ideals.
Furthermore, it is imperative to investigate the gatekeeping practices by these oligopolistic banks, which may pose entry barriers for South African-owned banks. Such practices hinder healthy competition, limit the options available to consumers, and undermine the growth of our local financial institutions. The resultant dominance by international banks not only compromises the autonomy of our financial sector but also perpetuates economic dependency.
In light of the seriousness of these findings and their potential impact on the wellbeing of our citizens, we respectfully request that you institute a Commission of Inquiry to investigate the rand manipulation scandal. Such an inquiry is crucial to ensure a comprehensive and impartial examination of the collusion.
In light of these profound concerns, we implore you to ensure that the Commission of Inquiry thoroughly investigates these issues, scrutinizing gatekeeping practices that may hinder the entry and growth of South African-owned banks that wish to emerge and enter the market in serving their direct constituents.
We believe that a Commission of Inquiry, independent and transparent in its proceedings, is crucial to restoring public trust, ensuring accountability, and safeguarding the economic interests of our citizens.
The objectives of this proposed Commission of Inquiry should include, but not be limited to:
1. Human consequences: Investigate the tangible human consequences of the rand manipulation, including cases of accelerated home and car repossessions, an escalation of interest rates, mental health issues, and any loss of life directly attributed to the economic fallout.
2. Investigating the collusion: Uncover the extent of the collusion, the parties involved, and the specific mechanisms employed to manipulate the rand/dollar currency valuation.
3. Determining the economic impact: Assess the economic consequences of the manipulation on various sectors, including imports and exports, foreign direct investment, public and private debt, and the balance sheets of companies.
4. Identifying responsible parties: Identify and hold accountable individuals and institutions responsible for the gross misconduct, ensuring that appropriate legal actions are taken.
5. Evaluating regulatory oversight: Scrutinize the effectiveness of existing regulatory frameworks and oversight mechanisms in preventing and addressing such financial misconduct. Examine the role of regulatory bodies, particularly the South African Reserve Bank (SARB) and Financial Sector Conduct Authority (FSCA) the , in ensuring adherence to financial regulations and holding institutions accountable for their actions.
6. Ongoing misconduct: Ensure that the Commission investigates whether similar misconduct has occurred in the period between 2013 and the present and take necessary measures to address any ongoing malpractices.
7. Impact on legislation: Explore the violations of various legislations, including the Consumer Protection Act, and propose recommendations to strengthen regulatory frameworks and enforcement mechanisms.
8. Proposing remedial measures: Recommend measures to rectify the damage caused, prevent future occurrences, and strengthen the resilience of our financial systems.
We implore you to place the citizens of South Africa first through this commission, ensuring that our people can trust that there is transparency, good governance, and accountability in the leaders elected to lead this country.
We look forward to your positive response to this urgent and crucial matter.
Thank you for your attention to this request.