Collusion Case Strengthens Zuma's Hand in Battle With Banks

South Africa's competition watchdog has accused 17 local and worldwide banks of conspiring to fix the price of the rand over the past 10 years, and recommends fining them 10 percent of their annual in-country turnover, Newsweek reported.

It had found that, from at least 2007, the banks had a general agreement to collude on prices for bids, offers and bid-offer spreads for the spot trades in relation to currency trading involving US Dollar/Rand currency pair. It is this same neoliberal policy regime - in addition to lack of transformation - that has opened space for private banks and financial institutions to collude, wallowing in deregulated finance, capital and currency markets.

South Africa's ruling ANC party called on Thursday for the toughest possible sanctions against more than a dozen local and foreign banks accused of rigging the rand currency, piling political pressure on lenders that have become a target for public anger.

Bank of America, JPMorgan, Standard Chartered, Commerzbank, Macquarie Group, Australia & New Zealand Banking Corp, Standard Bank Group, HSBC and BNP declined to comment when contacted by Bloomberg. The SA Competition Commission today said it concluded an investigation into whether banks took part in a cartel to rig currency quotes to customers who were buying or selling its local currency. "The fact that some banks may have been partly responsible for the weak and volatile rand through currency manipulation is deeply troubling", the organisation said on Thursday.

"The profit-driven assault on the South African rand through such collusion and corruption by the banks flies in the face of efforts by the South African nation to prosperity for all". 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. The banks were said to have manipulated the bids by stepping back from certain bids and even creating fictitious bids and offers, a statement by the commission said. EFF spokesperson Mbuyiseni Ndlozi said they will write to the South African Reserve Bank to demand that the banking and operating licences of the banks be discontinued immediately.

When delivering his SONA, Zuma acknowledged that South Africa's competition authorities have done excellent work to uncover cartels and punish them for breaking the law.

A further eleven banks have been involved in the case.