THE BOTTOM LINE
A bit rich when banks whine about being misunderstood
Competition Commission told it’s ‘whimsical’ at tribunal hearings on alleged rigging of currency trades
“Whimsical” and “unreasonable” are terms often used in connection with banks. It’s usually what most of us think of when we contemplate our latest bank statement. As we study our latest bank charges, in particular charges for foreign exchange transactions, it’s difficult not to get a sense that it is a tad whimsical or unreasonable.
So it was almost refreshing to hear the banks complain about somebody else being “whimsical” and unreasonable” at the first day at the Competition Tribunal’s hearings relating to the alleged rigging of currency trades.This is not the tribunal’s hearing into the actual substance of the allegations, which some informed individuals suspect will actually never make it to the tribunal. This week’s hearings are devoted entirely to 23 banks whingeing about the Competition Commission’s “whimsical” and “unreasonable” attitude in alleging, back in 2015, they might have been involved in rigging foreign exchange trades.
At this stage one thing can be said with certainty: if the case ever does go to a full hearing none of the accused will have to pay the 10% fine on annual turnover that the commission is looking for. Which is a bit of a shame because with that sort of money the president could ease off on his search for $100bn of foreign investment. SA might even be able to afford Eskom.
It’s impossible to know why the commission decided to go after the foreign exchange traders; it might have been a little giddy from its success with the construction industry. It’s not that foreign exchange trading the world over isn’t regarded as susceptible to extreme manipulation, largely because the actual goods and services traded across currencies is a fraction of the daily value of currency trading.
It’s just that proving it is another matter entirely. And it does seem the commission might not have come close to proving it even with the assistance of Absa and Citibank, who have supplied information in the hope of getting leniency.