We have probably neglected market conduct, says Reserve Bank’s Francois Groepe
The SA Reserve Bank deputy governor now that new structures are in place, he has ‘full confidence’ market-conduct authorities will focus on these type of issues
South African regulators could have paid more attention to the conduct of companies in the financial-services sector in recent years, deputy governor at the South African Reserve Bank Francois Groepe said. Rather than fix their attention on the potential exploitation of the poorest people by a rapidly expanding unsecured lending industry, regulators instead prioritised prudential regulation, he told editors at a lunch in Johannesburg on Thursday. Prudential regulation ensures that banks are adequately capitalised and have the buffers to withstand risks. “If I am honest, I do think we have probably neglected market conduct,” Groepe said. SA has suffered two recent bank failures, both of which targeted low-income earners. African Bank Investment collapsed in August 2014 when investors of the country’s then-largest unsecured lender balked at replenishing its capital and bad debts soared. VBS Mutual Bank is being wound down after being taken over by administrators in March, with a subse...
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