ANC attacks banks over forex rigging charges

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February 16, 2017 5:26 PM

The party said in Johannesburg that the rigging was piling political pressure on lenders.

South Africa’s ruling ANC party on Thursday called for the toughest possible sanctions against more than a dozen local and foreign banks accused of rigging the rand currency.

The party said in Johannesburg that the rigging was piling political pressure on lenders that had become a target for public anger.

The Competition Commission on Wednesday found the banks, including U.S., European, Japanese and Australian lenders, collude and coordinate their trading activities when dealing in the rand and U.S. dollar.

The commission said from at least 2007, banks had an agreement to collude on prices for bids, offers and bid-offer spreads for spot trades involving the rand.

It said a messaging chat room called “ZAR Domination”, was used to coordinate trading activities when giving quotes to customers who buy or sell currencies.

The commission recommended fines should amount to 10 per cent of the banks’ annual revenues, without saying whether this should relate to global revenues or just their South African business.

South Africa’s banking index fell 1 per cent on Thursday as a result of revelation.

The ANC attacked the banks, which many South Africans view as a symbol of the stark racial inequality that persists 23 years after the fall of apartheid.

“The ANC takes an extremely dim view of the activities of the listed banks. These acts of corruption have crudely exposed the ethical crisis in the South African banking sector,” the party said in a statement.

“It is further an indication of how the markets are and can be manipulated by dominant oligopolies to cripple its functioning to suit their nefarious agendas.”

Financial regulators are clamping down worldwide, with dozens of traders fired and big banks fined around $10 billion in separate cases for rigging.

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