ON THE MONEY
STUART THEOBALD: Politicians must be kept away from Bank in order to maintain financial stability
Independence of the central bank undermines the will of certain politicians and, when that will is self-serving, that is exactly how it should be
Politicians and banks make for a toxic mix anywhere in the world. That is one reason why the independence of the Reserve Bank is paramount. It is also why the laws and regulations governing banks must ensure they operate to the highest global standards. The "nationalisation" of the Bank has been put back on the agenda by the EFF, although it is not clear why. It tabled a bill last week that seeks to make the state the sole shareholder of the Bank and for its directors to be appointed by the finance minister, rather than by shareholders. I doubt the EFF’s constituency cares whether the Bank has private shareholders or not, especially as it functions according to statute, not to shareholder whim. It does provide an avenue to embarrass the ANC, which adopted nationalisation of the Bank at its elective conference in December but has since done nothing about it. It also potentially creates a windfall for existing Bank shareholders who may demand a premium to be bought out. The Bank earne...