The National Treasury has noted with concern the statement issued by the Competition Commission on the completion of an investigation into alleged price-fixing and market allocation by 17 banks, including three South African banks, all of which have an international footprint.
The matter has now entered a new phase in which the banks will have an opportunity to answer for themselves at the Competition Tribunal.
“We view this matter in a very serious light and welcome any steps taken against wrongdoing by any financial institutions and will respect whatever the outcome of this process at the tribunal,” it said in a statement.
The allegations, if proved to be correct, point to poor market conduct practices at offending institutions.
Treasury stated that this was the type of abuse it had in mind in 2011 when proposing the Twin Peaks reform to put in place a new market conduct regulator to ensure that all financial institutions treat their customers fairly and operate with the highest ethical standards.
“The South African Reserve Bank is a prudential banking supervisor, not a market conduct regulator, and no market conduct supervision was in place during the period in question in 2007.”
It pointed out that South Africa’s financial sector regulatory reform process was well under way.
“Twin Peaks will create a dedicated market conduct regulator with scope of responsibility across the financial sector to cover market conduct issues in both the retail and wholesale market,” Treasury noted, adding that these regulators will support the achievement of proper competition outcomes in the sector.
Treasury added that it would ensure all financial sector regulators support the Competition Commission in any way possible, should it request such assistance.