EDITORIAL: Busisiwe Mkhwebane’s reckless shot at central bank
The public protector’s proposal of how the Bank’s mandate should be revised betrays a disturbing misunderstanding of what it is that central banks can and cannot do
There are several aspects of Public Protector Busisiwe Mkhwebane’s report on the Bankorp/Absa lifeboat that are of grave concern. The most serious of these is her implicit criticism of the role of the Reserve Bank, both as a lender of last resort and as a custodian of monetary policy. In criticising the bail-out and arguing that this was money that rightfully belonged to the people of SA, Mkhwebane appears to be questioning whether the Bank should have got involved at all in saving Bankorp. But protecting the stability of the financial system is one of the things that central banks do and if the woes of a troubled bank are deemed to pose a risk to the banking system as a whole, it is appropriate to step in. Bail-outs should be directed towards protecting deposit holders rather than shareholders, who in the event of a bank failure should be the ones to take the hit. Assistance must be transparent. This did not happen in the case of Bankorp, which is one reason several investigations ...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.