Counting the cost of resuscitating VBS
Politicians want the mutual bank to be saved in the name of transformation, but the numbers don't add up
A number of commentators have called for VBS Mutual Bank to be saved on the grounds of improving transformation in the financial services industry, seemingly at any cost. “We call on all efforts to be focused on saving this bank of the black, poor and rural masses of our people. This must be done to ensure that the financial sector does not remain white-dominated and untransformed,” the EFF said in a statement last week. Similar sentiments were shared by Yunus Carrim, parliament’s chair of the standing committee on finance and an ANC member, who described the collapse of VBS as a ‘‘major setback for diversity and transformation in the financial sector’’. However, careful consideration shows that when weighed against competing alternatives, resuscitating VBS would be a poor way to advance transformation from the ashes of one of the country’s most brazen financial crimes. To start calculating the cost of reviving VBS, one should start with the amount of money believed stolen, and whic...