TWIN PEAKS
HILARY JOFFE: Bank regulators must reduce rogue risks
Banks have long been experts in modelling the risks that most obviously affect their financial soundness — such as the risks they face if interest or exchange rates go the wrong way or their customers can’t pay back loans or their funders take flight. But the risks they face if their people get up to no good are far harder to model – and just as likely to do serious damage to the financials. It has been misconduct, among the interest rate or currency traders in global banks’ dealing rooms or the salespeople selling pension products, that in the post-crisis period has tended to do the most damage to banks globally, denting their reputations, their share prices and their profits. SA, too, now has competition regulators investigating alleged misconduct by traders in the offshore rand-dollar foreign exchange market.Historically, the huge global forex market was hardly regulated. But the world has changed, here as elsewhere. And in SA’s new regime of financial regulation, conduct and the...
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