Latest news with #SimTshabalala
Daily Maverick
an hour ago
- Business
- Daily Maverick
After the Bell: Manipulating the rand — really?
There are times in life when you are so desperate to find someone else to blame for your situation that you just lash out. And you grab any chance to blame someone else. I sometimes wonder if that feeling, that horrible desperation, the feeling that our currency is so weak, is behind the very strange story about claims that a group of 28 banks, both South African and foreign, manipulated the rand. The backstory is long and complicated, but essentially, the Competition Commission says it has evidence that traders working for the banks were part of a single conspiracy. There is talk of 'rand-pairs' and secret chats on Bloomberg terminals – even phone conversations and secret agreements. Considering that the phrase 'rand-pair' is second only to watching golf in making my eyes feel somewhat weighted, it's easy to understand how this thing has such political power. It's because, like the chap on par-who-gives-a-monkey's, almost all of us have no cooking clue what is going on. And the moment I hear phrases like 'manipulation' or 'hedge' or 'rand-currency-pair', I immediately get the feeling you get when someone is trying to sell you car insurance. You just know you're being screwed. But in fact, as former Daily Maverick journalist Ray Mahlaka once clearly explained, the currency market is just too big for it to have any impact on you. Around $50-billion (about R882-billion) is traded every day. And while some of the banks involved are big, none are big enough to have played that particular game. Now obviously, some people did play games with the currency. Absa was the first to announce that it had discovered two of its traders were doing this. It told the regulators and suspended them. Standard Chartered and CitiBank have also admitted that some of their people were guilty. They've paid a fine and moved on with their lives. But some of the other banks are fighting on. As Business Live reported this morning, the Constitutional Court is finally expected to put all of this to bed one way or another in a four-day hearing next week. One hopes the coffee machine at Constitution Hill can do double-time. Four days of a hearing about currency pairs is more than we mere mortals could possibly stand. Two things have really struck me about this case. The first is that I remember speaking to the Competition Commission about it in 2017. The recording is sadly lost now, but I remember so clearly how adamant they were that first, all the named banks were involved, and second, how they would wrap up this case in a couple of months. It's 2025 now, and it's still going. The other is the language used by the banks in their defence. Take Sim Tshabalala, the CEO of Standard Bank. I think it was the first time I'd seen a CEO of one of our big banks writing an op-ed in our media, back in 2023. It was on this topic. Remember how dangerous it is for a CEO, who was not on the Bloomberg terminal or the Reuters chat or the phone conversation, to say anything dogmatic about what happened. But this is what he said in News 24 two years ago: 'We're not playing for time or looking for a deal. When we say that we are innocent of currency manipulation, we mean it. We will not settle. Where we found that our people have engaged in wrongful conduct, we will act swiftly and will work with the relevant authorities. Where we find no evidence of wrongdoing, we will protect and defend our people – our most valuable assets.' This is a person putting their entire reputation on the line. He must believe it. Firmly, utterly, unshakeably. I have a horrible feeling in my belly that the Competition Commission might feel a little silly after all of this – that the Constitutional Court, after selecting a good nine-iron, might include a few choice words about the commission's conduct in its final ruling. But that won't be the end of it. I think the damage is done. Parties such as the EFF and MK, and perhaps even the SACP, who have every incentive to attack the system, banks and institutions, will just go on attacking them. I wouldn't be surprised if we hear that phrase 'monopoly capital' again. They might even turn, again, on our judges. It's quite strange in one way. Julius Malema has mouthed off time and time again about 'currency manipulation'. It almost makes you wonder what he might know about making a profit off the manipulation of a bank. In the meantime, bankers who are innocent will probably feel pretty frustrated, too. And not just with their putting. I think they'll feel they've been dragged into something that they have nothing to do with. I'll tell you this for free, though. Like any golf tournament I've ever watched, I can't wait for the whole saga to end. DM
Mail & Guardian
4 days ago
- Business
- Mail & Guardian
G20 business leaders call for lower borrowing costs for Africa
A recent forum heard that the high cost of capital continues to undermine the continent's growth and infrastructure development Africa needs an action-oriented agenda to lower borrowing costs over the next 12 to 36 months with a focus on improved data systems, strengthened internal capacity and global finance reform, a recent G20 business summit heard. High debt service overtook financial flows to developing countries in 2022, meaning that debt service costs exceeded official development assistance, negatively affecting governments' budgets to build infrastructure. Business leaders are recommending that the G20 prioritise imbalance in risk assessment ahead of an annual heads of state summit to be hosted by South Africa in November. Corresponding working groups have made similar recommendations during South Africa's G20 presidency, with Think Tank 20 focusing on Standard Bank chief executive Sim Tshabalala, who chairs the G20 finance and infrastructure track, said a focus on the cost of capital has the potential to make a lasting and transformative impact on the economies and people of Africa. 'This is not just about building roads and bridges, it is about building opportunity, resilience and prosperity,' said Tshabalala. Africa pays some of the highest borrowing costs in the world, the G20 business leaders said, adding that a coalition of willing institutions should address the cost of capital and ensure solutions are context-specific, self-determined, and aligned with the continent's priorities. African governments pay up to 500% more for capital market loans, with external debt service reaching $89 billion in 2024. 'Affordable capital is a lifeline for Africa, not a luxury. It's time the cost of capital reflects our potential, not outdated risk narratives,' said Didi Nwuneli, chief executive of the ONE Campaign. The campaign advocates for the inclusion of the 'The human costs and the magnitude of the challenges are overwhelming, but also the opportunities to play a critical role in solving the problems, leveraging data, innovation, catalytic capital, but also the political will,' said Nwuneli. Compared with advanced economies, Africa's borrowing is considered low. Governments' net debt as a proportion of GDP stands at 69% for South Africa, 45% in Nigeria and 35% in Ethiopia, whereas that for the US is at 96%, Japan at 155%, Italy at 126%, France at 102% and the UK at 92%. When it comes to economic growth, some nations get harnesses for the ascent, while African countries must climb with weighted vests, said Marcus Courage, chief executive of advisory firm Africa Practice. 'We simply can't realise Africa's full potential — a potential that benefits the entire world — until we tackle the structural and dynamic factors that drive up its capital costs,' he said. Discussions also touched on improved government capacity with emphasis on African governments' need to invest strategically to shape markets that reward innovation, reduce reliance on debt, and increase development spending. The lack of quality data was viewed as an impediment to growth and a prerequisite for changing the narrative of a high-risk continent. Nwuneli stressed the human impact behind high debt service, with governments forced to cut domestic spending and unable to fund public administration. 'We also should not forget the magnitude of the impact because it's for the most vulnerable, the children whose school fees are being withheld because governments cannot pay their teachers, the nurses and doctors not going to their clinics because they are not getting paid,' Mwuneli said.
Mail & Guardian
25-07-2025
- Business
- Mail & Guardian
Protected: Standard Bank sweeps the board at 2025 Euromoney awards
Last week, Standard Bank Group CE, Sim Tshabalala, had the honour of accepting 26 accolades on behalf of the bank at the prestigious Euromoney Awards for Excellence 2025, including Best Bank in South Africa and Africa. This content is password protected. To view it please enter your password below.
Zawya
16-07-2025
- Business
- Zawya
B20 urges Basel III easing to unlock infrastructure investment across Africa
South Africa, through its leadership of the G20's B20 Finance and Infrastructure Taskforce, is calling for a revision of Basel III capital requirements to allow banks more room to invest in large-scale infrastructure projects across Africa. The move is seen as essential to closing the continent's infrastructure financing gap and reigniting regional economic integration. Co-chaired by Sim Tshabalala, chief executive officer of Standard Bank, the B20 SA taskforce argues that strict Basel III rules—particularly those related to risk-weighted asset calculations—discourage long-term lending to infrastructure projects due to the high capital buffers banks are required to hold. By easing these requirements for certain types of development-linked investments, banks could channel more funds into sectors critical to Africa's growth, including transport, energy, and telecommunications. Speaking at the Africa Unlocked Summit, Tshabalala highlighted the continent's vast infrastructure deficit. 'Africa needs about $170bn a year in infrastructure investment but is currently only able to raise $85bn,' he said. 'Basel III rules need to change so that the risk‑weighted assets result in banks holding less capital. If banks can hold less capital, they'll be able to fund more projects.' Reforming global finance The B20's recommendations come at a pivotal moment as global leaders prepare for the upcoming G20 summit. In a joint statement with the International Chamber of Commerce and Business at OECD, B20 South Africa called for targeted reforms that would improve capital access, reduce risk premiums on infrastructure investment, and promote more flexible banking regulations tailored to development goals. The proposals include revising prudential rules that unintentionally penalise long-term infrastructure lending, especially in emerging markets. The B20 also advocates for stronger risk-sharing mechanisms, improved project preparation support, and public-private collaboration. While critics caution against compromising financial stability, proponents argue that smarter calibration of capital requirements—rather than wholesale relaxation—could unlock billions in private-sector investment without undermining regulatory safeguards. The push reflects a broader effort to align global financial rules with sustainable development and inclusive economic growth. If successful, the reforms could mark a turning point for Africa's infrastructure ambitions—and set a precedent for regulatory reform that prioritises both financial soundness and real-world impact. All rights reserved. © 2022. Provided by SyndiGate Media Inc. (
Zawya
14-07-2025
- Business
- Zawya
South Africa roots for relaxed global bank rules to allow African lenders fund mega projects
South Africa now says it will use its position as the President of the G20 to push for the relaxation of stringent capital requirements for banks globally, in a bid to allow African banks much more wiggle room to lend to the continent's infrastructure needs. The Group of Twenty (G20) is an international forum comprising both developing and developed countries that seeks to find solutions to global economic and financial issues. South Africa assumed the presidency of the G20 on December 1, 2024, taking the mantle from Brazil, and will be hold it until November 30, 2025 under the theme 'Solidarity, Equality and Sustainability'. Sim Tshabalala, the co-chair of the Business 20's Finance and Infrastructure Taskforce, which is placed under the G20 umbrella, and chief executive of South Africa's largest lender, Standard Bank, says there is a pressing need for Africa's banks to step in and plug the continent's $85 billion infrastructural gap. Mr Tshabalala says there is a need to relax the stringent capital requirements attached to the globally recognised Basel III standards.'South Africa has the privilege to be the President of the G20 and under the G20 you have the B20 which exists to support the outcomes that will be in the communique that will be issued by the G20. Africa needs $170 billion a year for infrastructure, but can only raise $85 billion, where is the remaining $85 billion going to come from? It will come from making it easier for the private sector to lend,' he said at the second edition of the Africa Unlocked Summit in Cape Town, South Africa.'One of the recommendations we are making is that the Basel III rules need to change so that the risk weighted assets that one holds result in you holding less capital. If you are holding less capital, you will be able to do more projects.'Basel III regulations are an internationally agreed set of measures developed by the Basel Committee on Banking Supervision in response to the fragility experienced in the global banking system during the 2007-09 global financial crisis. Under the rules, banks determine how much capital they need to retain by assigning a risk weighting to every asset they hold. Risk-weighted assets essentially refer to a bank's assets adjusted to reflect their level of risk. Basel III requirements are seen as challenging the ability of African banks to lend towards infrastructure due to the increase in the minimum amount of capital that banks are required to hold based on their assets and loans. Despite the call for Basel III reform, South Africa says it will not be a blank cheque for governments to use the banking sector capital to underwrite their infrastructure needs.'The other recommendation is in reducing the cost of capital and governments need to be more transparent and improve their fiscal and monetary management as well as their investor relations,' Mr Tshabalala said.' © Copyright 2022 Nation Media Group. All Rights Reserved. Provided by SyndiGate Media Inc. (
