LETTER: Banks cannot be blamed for countries’ financial ruin
As SA slides towards junk status, it is the government that needs to bear the consequences
Terry Crawford-Browne misses the point entirely on the cause of the 1930s depression (“Banks partly to blame for economic crisis”, February 9). Blaming Winston Churchill and attributing the turnaround to Franklin Roosevelt is simplistic, but that is a debate best left to another forum.
My bigger issue with Crawford-Browne is his pathological insistence that the banks “colluded in the funding of the ANC’s economic obsession” and should be held to account. If banks were to be held accountable for the misdeeds of their debtors, they would be out of business tomorrow. Ask the governments of Greece and those perennial defaulters the Argentinians about the consequences of their profligacy on their economies. The cost is borne by the political party responsible by being voted out when the electorate sees the real cost of irresponsible borrowing.
Banks, especially in this country, walk a tightrope between political expediency and credit risk. What we are now seeing is the final stages of a slide towards sovereign junk status, which means the banks cannot lend any money to this delinquent government. President Cyril Ramaphosa will soon have to open discussions with the IMF. What this government needs most is a big dose of reality.
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