Nene concerned about systemic risk

Finance Minister Nhlanhla Nene. File photo: Nic Bothma

Finance Minister Nhlanhla Nene. File photo: Nic Bothma

Published May 21, 2015

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Johannesburg - Government officials will meet the South African Reserve Bank to discuss a foreign-currency trading investigation opened this week, as the finance minister said he was concerned the probe may expose risks to the banking system.

“We are very concerned,” Finance Minister Nhlanhla Nene said in an interview at a meeting between business and government leaders in Johannesburg on Thursday. “We will meet with the Reserve Bank tomorrow to understand what happened and if there’s any impact on South Africa’s financial systems.”

The country’s Competition Commission said on May 19 it suspects 11 companies of using electronic messaging software to co-ordinate foreign exchange deals when quoting prices to customers.

The central bank, which regulates South African lenders, said the antitrust agency was reacting to a complaint against “certain foreign exchange traders”.

JPMorgan Chase & Company, Citigroup, Barclays Africa Group Ltd and Standard Bank Group Ltd were among the lenders named.

The finance ministry may make a public statement about the foreign exchange investigation in time, Nene said.

Hlengani Mathebula, a spokesman for the central bank, didn’t answer calls to his phone.

Bloomberg

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