I'm sitting here reading this Reserve Bank Act secrecy clause and I'm left with so many questions and I hope one of you can help me out.
• First of all, in a democracy like South Africa, why is it that the Reserve Bank can have a SecrecyClause yet they are the ones mandated by gvt [on behalf of the nation] with managing the nation's monetary wealth and economic growth by managing the currency of the nation; determining monetary policy, determining money supply, determining the price of money [interest rates], producing the currency of the nation, trading in foreign currency, managing debt, registering banks, regulating banks, regulating banking activity, storing the foreign reserves of the nation, storing gold for the gvt, selling precious metals on behalf of gvt, lending to gvt and banks, opening branches on behalf of local commercial banks overseas, ensuring the trade in negotiable instruments, facilitating foreign payments and balance of payment and many other activities of national importance.
• From who are they keeping secrets yet they are meant to be serving the public, managing the wealth of the nation and mandated to ensure the growth of the nation?
• What is it they have to hide? Is this not how $224bil of gold went missing from the bank before independence? It is said that this clause was put in in 1989 by the NP gvt to facilitate the secret sale of South African gold to Switzerland and the US (see Ciex report and Stephen Goodson's book, Inside the Reserve Bank page 101). How do we know they are still not selling the country's gold and precious minerals as their own private property even now?
• Why is the Reserve Bank not obliged to tell the
public how they arrive at the cost of money [interest rate] in relationship to other variables like keeping the economy growing and reducing unemployment?
• Is it not a conflict of interest that the vested interest of bank’s commercial bank shareholders is to have higher interest rates over other economic considerations?
• How is it that the Reserve Bank is responsible for registering banks, deciding the criteria upon which those banks are registered or permitted to operate. Yet that power and function does not appear on the powers and function of the Bank in the Reserve Bank Act?
• How is it that the Registrars of banks [four of them] are employees of the Reserve Bank but they do not appear in the appointments of the Reserve Bank in the act. Yet they are appointed by the bank in conjunction with the minister of finance?
• How is it that the Reserve Bank regulates the registration of commercial and merchant banks, determines the criteria by which banks qualify to be banks in the republic and establish the cost of money [interest rates]. Yet the Reserve Bank's shareholders are among others the five big commercial banking oligarchies [White Monopoly Capital] that have presided over a banking monopoly for 150yrs. Is that not a conflict of interest?
• How is it that the Reserve Bank regulates the activities of banks, their capital reserves, their activities and lending activities when the Bank is controlled by the five biggest commercial banks in the same banking space? In essence is this not the five big banks regulating themselves and potential competitors?
• Why is the Reserve Bank which is involved with managing national currency with the mandate to ensure economic growth is privately owned but exempt from tax for printing money and minting coins?
• Why are the biggest shareholders in the Bank only white monopoly capital institutions or individuals?
• Why is it that the Reserve Bank is self regulated by a scant act which gives it a lot of leeway to self regulate with its shareholders who are mainly the five big commercial banks? Even the minister of finance, treasury or revenue services have little or no oversight of the bank according to the act, but instead the bank seems to call the shots with them.
NOTE: The Reserve Bank is limited to issuing R2mil worth of shares and each shareholder is permitted to have only R10 000 worth of shares which reap a dividend of only 10c/annum, which is nothing.
Nevertheless, the limit of shares only came into effect in 1990, meaning those who already had more than R10 000 of shares were left with them but anyone buying shares after was limited to R10 000.
Here is the kicker: in as much as direct shareholding in the Bank is not really worth much and has a very small return to a shareholder. These shares give huge power and control over the Reserve Bank and its policies to the big banks and big business in South Africa.
These shareholders influence the Bank to make profitable policies for the big banks and big white monopoly businesses.
The shareholders of the Bank and its directors are some of the most powerful people in South Africa if not the world, arguably more powerful than the President.
How can this be in a democracy 23yrs after independence?
By Rutendo Bereza Matinyarare