Principled agents: Reflections on central bank independence
Lesetja Kganyago, Governor of the South African Reserve Bank
19th annual Stavros Niarchos Foundation lecture
Peterson Institute for International Economics, 15 April 2019
I am honoured to be here, but I am not sure if I should be happy. The
Stavros Niarchos lectures tackle major world problems. In 2016, David
Lipton discussed the backlash against globalisation. In 2017, Mervyn King
explored global macroeconomic imbalances. Last year, Tharman
Shanmugaratnam looked at wage stagnation and the decline of social
mobility. This year I have been invited to discuss central bank
independence.
There's a pattern here. Central banks must be in trouble.
Looking around the world, there are signs of this trouble in many places -
including advanced economies, where institutional stability can no longer
be taken for granted. You will all be able to think of examples. The Bank
of England has been criticised for warning about the costs of Brexit, which
just shows that giving good advice in a polarised political environment is
no way to make friends. As for the United States, everyone likes telling
the Fed what to do, and as we have seen this urge is not confined to those
without authority. Elsewhere, a conflict over the central bank's reserves
has led to a Governors' resigning. And of course in South Africa, the
independence of the Reserve Bank has also come under threat in recent
years, which must be why you think I'm the person to discuss this subject.
Tonight, I will briefly review the textbook case for central bank
independence, which centres on the well-known time-inconsistency
problem. It is an elegant analysis, but it only covers a narrow part of central
banking. In particular, it does not apply very well to financial sector
mandates, such as financial stability or banking regulation, which are core
duties for many central banks. I want to argue however that the case for
central bank independence goes further. The issue is actually another
classic economic concept: the principal-agent problem. How can societies
get their leaders to look after the public interest instead of their own short
term political interests? This is one of the fundamental difficulties of
government. In my experience, it has also been the main reason the South
African Reserve Bank has needed its independence.
Independence allowed us to deliver on our mandate, as set down in the
constitution. Independence ensured that the tremendous powers of a
central bank - such as printing money, or licensing and supervising banks
- couldn't be taken over by politically connected individuals bent on looting
the state instead of serving the citizens. I'm not sure exactly how this
should be modelled - how we could prove the point in a large empirical
study, and get a peer-reviewed article out of it - but it has been my lived
experience for some years now. There is a saying: there are no atheists
in foxholes. We've been on the frontlines lately, the place where good and
bad governance meet, and I promise you - in that situation, you really
learn to believe in central bank independence.
Let's start with the textbook. Kydland and Prescott showed that
governments suffer from a time inconsistency problem. They'd like to
promise low inflation in future, but when the future shows up, they discover
it's easier to tolerate higher inflation instead. As a result, lenders, firms
and workers start to anticipate tighter inflation, and everyone ends up
living in a world they would not choose, with a built-in bias towards higher
inflation and higher interest rates. The solution to the problem is an
independent central bank, with a clear mandate to control inflation. With
this mandate in place, governments do not have to pay higher inflation
risk premia on their debt, and society as a whole gets to enjoy a lower
level of inflation. This is why central bank independence has been
described as a free lunch.[1]
But this time-consistency argument does not cover the whole case for
independence. In particular, it says nothing about financial stability
mandate nor about narrower bank supervision duties, which occupy a lot
of central bank staff.
One response to this is to concede that these things are not like price
stability and do not require independence. By this logic, monetary policy
should have its own safe space, but not other mandates. As Ben
Bernanke has argued, for instance, and I quote:
...there should be no 'spillover' from monetary policy independence
to independence in other spheres of activity. In practice, the Federal
Reserve engages cooperatively with other agencies of the U.S.
government on a wide range of financial and supervisory issues
without compromising the independence of monetary policy.[2]
Unfortunately, it is not always and everywhere the case that the two can
be combined so harmoniously. Serious threats to central bank
independence are possible, even when the sanctity of monetary policy is
intact.
For a telling example of the problem, consider Cyprus.[3] As a member of
the euro area, Cyprus does not have an independent monetary policy. It
has a large banking sector, however - and when this sector fell into crisis,
in 2013, that also generated a serious threat to the independence of this
central bank.
Cyprus's banking crisis was the result of falling asset prices, particularly
for Greek government bonds. The banks bought these in 2009 and 2010,
and incurred haircuts as part of Greece's 2011 debt restructuring. The
result was banks that were probably insolvent, but which were also
simultaneously too big to fail and too big to bail. Tackling this problem
required several desperate measures, including emergency liquidity
assistance from the European Central Bank (ECB), strict capital controls,
a two-week shutdown of the entire banking system, and even bail-ins for
bank bondholders and uninsured depositors.[4]
The politics of this were predictably toxic, especially in a small country
where many people depended on the banks for their wealth and status.
The central bank got the job of administering much of the crisis
management and resolution process, not least because it had the trust of
international lenders. Perhaps inevitably, it then became a scapegoat,
with critics questioning its motives and patriotism.[5]
Although the independence of the central bank was secured by EU treaty,
and the position of the Governor was protected, the Bank's independence
was compromised anyway. It achieved this by expanding the Board of the
Central Bank of Cyprus (CBC) and giving it more power. The Board then
switched reporting lines away from the Governor to its own members, so
bank staff ended up answering to the Board instead. The European
Central Bank issued a legal opinion questioning these measures, but they
were adopted anyway, and the European Commission did not take legal
action in response. Sidelined and under constant, personal attack, the
Governor, Panicos Demetriades eventually resigned.[6]
I claim no great expertise about Cyprus's economy, and there are
probably people in the audience who know many interesting details of that
country's crisis that I have overlooked. I drew this account from the
memoirs of the former Governor. The point I want to make is that the
independence of a central bank can be gravely compromised without
monetary policy coming into dispute. Indeed, even without that central
bank issuing its own sovereign currency or having much control over
monetary policy - which of course was being set in Frankfurt.
One answer to this problem is to say that independent agencies like
central banks shouldn't be controlling bank bailouts and resolutions. The
distributional consequences are too large, the preferences of society are
not clear or stable, and the scope for accountability and transparency is
too limited.[7] The natural endpoint of this logic is that financial stability and
bank supervision problems should stay in the political realm, with the line
ministries and their political heads, instead of being delegated to
independent agencies. In this way, central banks can focus narrowly on
monetary policy, and have independence for that, without wading into the
mire of finance and perhaps being dragged down.
But there are two problems with this argument for narrow central banking.
First, not many central banks do narrow monetary policy. If the plan for
safeguarding central bank independence is to hive off non-monetary
mandates to other bodies, then we have lost our way. Most jurisdictions
are adding new duties for central banks, not taking them away.
This is related to the second problem: in a crisis, central banks find it hard
to stay on the side-lines or escape blame. To borrow an anecdote, recall
that in the UK it was the Financial Services Authority and not the Bank of
England which was the lead regulatory agency for the financial sector -
but when Northern Rock failed in 2007, it was Mervyn King whose picture
ended up in The Economist alongside the heading, 'The bank that
failed'.[8] The FSA doesn't exist anymore, and the Bank of England now
has responsibility for financial stability.
The lesson learned, one taken to heart in many places, was that central
banks have unique powers as the lenders of last resort. No-one else can
flood a banking system with liquidity like a central bank. As a result, a
promise to stop a bank run, or to do 'whatever it takes', has unique power
coming from a central bank. These institutions also tend to have
institutional capital, in the form of expertise, access to international
networks, especially fellow central bankers, and reputations as
responsible technocrats, which can be very helpful in coordinating
responses amongst diverse stakeholders. For these reasons, a central
bank sitting at ground zero of a financial crisis will struggle to stick to a
narrow monetary mandate. And this is even before we reflect that financial
crises are also likely to prompt big misses of inflation targets, as happened
in many advanced economies after the global financial crisis.
The implication is that financial stability is also very important for achieving
inflation targets.
So central banks probably cannot steer clear of financial stability and bank
regulation. Yet that conclusion doesn't make the space any safer for
independent central banks. I can testify to this from my own experience in
South Africa.
We are all used to thinking about attacks on central banks as demands to
cut rates for political reasons. But I never once got a call or any other
communication from the Union Buildings - the seat of the South African
executive - telling me what to do with monetary policy. Similarly, my
toughest public engagements haven't been about interest rates; they have
been about the financial system. Twice a year we have monetary policy
forums outside financial centres, but we barely talk about monetary policy.
Instead, we get questions about two things. One is a sideshow issue,
which is the fact that the Reserve Bank has private shareholders. These
shareholders don't have any policy control, they get tiny dividends (about
$14,000 per year collectively), and the private ownership isn't the basis of
our independence. Still, it sounds strange that there are private
shareholders, and people have questions, which we answer. The other
thing we get asked about is the financial sector, especially issues around
transformation, financial inclusion and development. And the financial
sector work is also where we have had the most difficult time, politically.
Let me just pause a moment to note that monetary policy has had its
problems. The South African economy has experienced a prolonged
slump, with negative per capita GDP growth since 2013. At the same time,
we have had inflation mostly at or above the top end of our target range.
We have had to raise interest rates in the midst of the downturn, to keep
inflation expectations in check and stave off worse scenarios, like the
crises that hit Turkey and Argentina last year. We are now getting inflation
where we want it, in the middle of our target range, which is a rate we
intend to maintain. But that hasn't provoked more than the usual
grumbling and op-eds - no major onslaughts. The attacks came for other
reasons. I'll describe three big ones.
The first involved banking services for politically connected people. As has
now been widely reported, some very senior figures in the South African
government developed warm relations with a family of businessmen.[9]
When it became clearer that a lot of that family's money wasn't clean,
commercial banks became unwilling to handle their accounts, for fear of
violating laws against facilitating money laundering. This made it nearly
impossible for the family to run its operations and sparked a political
fightback. We started feeling pressure to force banks to service these
accounts, in violation of the law.[10] In addition, we came under pressure
to allow this family to obtain a banking license by buying a small bank. We
even faced the threat of bank licensing being taken away from the SARB
altogether.[11] We were using our independence to uphold a law against
dirty money flows, and that made us enemies.
The second problem was over a small mutual bank. This institution had
spent most of its life quietly taking deposits from retail savers and
extending mostly mortgage loans. Frankly, we didn't realise the full extent
of what was going on until the very end.
Starting in 2013, new management took over the bank and turned it into
a crude Ponzi scheme. Their innovation was bribing public officials to
deposit municipal funds at the mutual bank in exchange for 'Christmas
presents'. They then simply spent these deposits on themselves,
accumulating fancy cars and a helicopter or two along the way.[12] When
we noted the significant growth in the business, we started engaging the
bank about converting to a commercial banking license. Ultimately, we
realised something was wrong when they failed to make a routine
payment through the national payment system, and it turned out they had
no money left. But they nearly got away with it for longer, because they
almost received a huge deposit from a public sector rail operator, which
would have kept the Ponzi scheme going. I should also note that one of
the reasons we missed what was going on was that one of the people
involved in the looting was a partner at a Big-4 accounting firm, who
signed off the accounts. We accepted audited accounts as a true
reflection of the business.[13]
When we put the mutual bank into curatorship, we came under attack from
people who said we were targeting this business because it was a black-
owned bank. We were accused of undermining black excellence and
protecting the interests of white capitalists.[14] You know the saying that
patriotism is the last refuge of scoundrels? Well, in South Africa, if you
really need somewhere to hide, it's not in patriotism but in race politics.[15]
And these guys really needed a place to hide. They had just perpetrated
a big bank robbery. Most troubling of all, they did it by stealing money sent
by government for service delivery to some of South Africa's poorest
people - and that municipal money was lost. This did not stop people
saying we should save the bank because it served the poor, even though
it was an insolvent, corrupted institution.
The third problem was the strangest. In 2011 the Public Protector, South
Africa's ombudsman, decided to investigate a bank bailout the SARB did
in 1985, for an institution called Bankorp, later taken over by ABSA, one
of our big banks. There was talk that the bank had received money
improperly, and it was argued that ABSA owed the government a refund.
When this was investigated in the 1990s nothing came of it; the allegations
were found to be baseless. Nonetheless, the Public Protector's office
decided to reopen the matter, and in June 2017, the Public Protector
issued a finding that ABSA had to pay back R1 billion (roughly US$70
million).[16] Then, to our surprise, the finding included an order that
parliament change the constitution, so that the Reserve Bank's mandate
stopped being to 'protect the value of the currency in the interest of
balanced and sustainable growth'. Instead, it should have a much more
opaque duty to look after the socio-economic well-being of South Africans.
You may be wondering how an ombuds office goes from investigating a
thirty-year-old bank bailout to changing the Constitution. We all wondered.
Ultimately the courts threw out both the findings.[17] Yet, although we were
all surprised by the attack coming like that, we had not anticipated such a
flagrant disregard of the law.
This brings me back to the point I raised at the start of my speech. When
I reflect on what the Reserve Bank was doing during this period, I cannot
say it was all about maintaining a credible commitment to sound monetary
policy. The problem we were really addressing was the principal-agent
problem. The people of South Africa were relying on their government to
look after their interests, while some people were instead using public
power to pilfer. The SARB made that more difficult, which is why the Bank
was attacked.
The terrifying thing we saw was how easy it is to flip between equilibria.
There is one equilibrium where the rule of law is upheld and corruption is
not tolerated, and most people then do their jobs honestly. And then
there's another equilibrium where people use their power to enrich
themselves, where there is impunity, and where everyone has the
incentive to take what they can before there's nothing left. Over the past
10 years we moved from the first equilibrium towards the second, slowly
at first, much faster towards the end. Many good institutions were
weakened.
It's not a surprise to me that the institutions which survived best were the
ones with independence, particularly the Reserve Bank and the judiciary.
Independence is a powerful defence. Many times during my term we have
reflected with gratitude on the foresight of our founding mothers and
fathers, who saw what could happen in the future and gave us the
constitutional tools to defend ourselves.
The writers of our Constitution were students of history. They reflected
especially closely on the African experience, where people had suffered
so many disappointments in the decades after independence, perhaps the
greatest being how leaders looted and impoverished their countries
instead of governing them in the public interest. When our constitution was
adopted the president was Nelson Mandela, and it would have been easy
to take good leadership for granted. But good laws last longer than good
leaders, and it was very helpful, twenty years down the line, to have the
constitutional protections, the checks and balances, the guarantees of
independence.
This emphasis on how independent institutions can protect democracies
from bad leadership implies a close connection between how we think
about central banks and how we think about judiciaries. I appreciate that
central banks have narrower tasks than judiciaries, and aren't peer organs
of government. They are not the fourth branch. But the comparison still
has some utility, in two ways.
First, the example of judiciaries is relevant because they too need to
honour democracy while exercising unelected power. They are also
confronted with the challenge from elected officials, "I'm elected and
you're not, so shut up and listen to me." In practice, judiciaries do not
resolve this tension through a policy of maximum deference. Rather, they
typically take direction from the rights and values embodied in their
countries' foundational laws, and they confront violations of these
principles when they see them. They appreciate that there is more to
government than having 50% plus 1 vote.
The lesson for central banks is, we can honour democracy without feeling
obliged to define it in strictly majoritarian terms, in which only directly
elected leaders have any legitimacy. Democracy ensures that
government serves the interests of the people. It does not consist of
elections only. One of the gravest threats facing any society is the ruler
who is more powerful than anyone else and therefore cannot be stopped
by anyone, even when he is acting against the interests of the principals,
the people. Not all leaders are bad - I have met many good leaders, and
some who would have behaved better in easier circumstances. But a
small portion of leaders are bad, and if you understand probability, then
you know sooner or later most countries will get a bad leader. There is
nothing undemocratic about buying some insurance against this
eventuality, and independent central banks, like judiciaries, are useful
parts of those insurance policies.
Second, like judiciaries, central banks tend to be relatively high-
performing institutions. There's a famous book about judiciaries called,
'the least dangerous branch'.[18] The idea is that all parts of government
can do terrible things, but the judiciary tends to do the least harm. I think
central banks have a parallel claim. For a start, central banks generally
maintain high standards of honesty and competence. Every now and then,
when there's a story about corruption in a central bank, people are
shocked. By contrast, when last was anyone surprised by a corruption
story in a government procurement agency or a legislative office?
Furthermore, central banks tend to be good at what they do, especially
when their performances are compared with other parts of government. In
emerging markets, inflation is at long-term lows. Many countries have
moved beyond the problem of 'original sin', the inability of emerging
markets to borrow long term in local currency, in large part because
independent central banks mean the local money can now be trusted.
Given how many financial crises have been caused by original sin, and
how pervasive it was, this is important progress.
In advanced economies, central banks can make an even grander claim
- to have been 'the only game in town' in the years after the global financial
crisis. This was not a position they desired, and it is not optimal from a
policy perspective. But aren't you glad there was a game? Central bankers
did as much as anyone to avert another Great Depression. We are now
worried about the rise of populism and reinvigorated nationalisms, but
imagine how much worse this would have been with a debt-deflation spiral
and double-digit unemployment.
This record tells us the case for independent central banks is not just
theoretical. We have tried these institutions in many countries, and the
experiments have generally succeeded. If anyone looks at this history and
concludes independent central banks should be abolished, well, we might
ask, what parts of government deserve to survive?
Of course, it's not enough to say we have a record of success and now
we must be left alone. The principal-agent problem applies to central
banks too - if there are no accountability mechanisms, what is to stop
central bankers privileging their own interests over those of society? Part
of the solution to this so far has been cultural, in the sense that there is a
community of central bankers with high standards and strong norms. This
isn't a hard or legal guarantee, but as with many professions, it is
important because it works even when people aren't watching. Even
better, however, is having nothing to hide. Modern central banks, unlike
their forebears, actively embrace transparency and communication. We
try to be clear about what we're doing, why, and what evidence we rely
upon for our decisions. This also promotes accountability, because it is
easier to assess success or failure. These values - transparency,
accountability - have served us well, and I doubt central bank
independence would be tenable without them.
We will also need new ideas for tackling new challenges. To conclude, I'd
like to address two broad problems, one to do with financial stability
mandates, and one affecting the price stability mandate.
Regarding financial stability, I opened this lecture with a problem.
Financial stability is probably an inescapable responsibility for central
banks, but it is a dangerous environment for an independent agency to
operate - more so than the monetary policy space. How best can we
navigate it? I have two suggestions.
First, we usually frame the problem in this sphere as one of independent
central banks taking decisions away from the duly elected authorities. But
sometimes independence helps ensure decisions are made in full view of
the public, by the appropriate authorities, instead of being shirked. Let me
give you an example.
In South Africa, one of the worst examples of state capture has been state
owned enterprises which pose a significant fiscal risk. State-Owned
Enterprises (SOEs) are a financial stability issue and should not the
Reserve Bank be doing a bailout?
Absolutely not. The challenge of dealing with too-big-to-fail SOEs, of
combining cash injections with conditionality measures, needs to be dealt
with by the elected authorities - as it has been in the latest budget from
National Treasury. The SARB's power to say no was greatly enhanced by
its independence.
Second, sometimes central banks face a tough choice between - on the
one hand - stretching their mandates and raising legitimacy questions,
and - on the other hand - staying in their safe spaces, but then risking bad
economic outcomes. For instance, with Lehman Brothers, I understand
there were legal problems, but I wish the Fed had found a way to prevent
its bankruptcy. Similarly, I'm glad it was possible to give other investment
banks access to Fed funds, and to prevent AIG from collapsing.
Finding the right balance here is always going to be an art. Fortunately,
we have some master-class performances to draw on for lessons in how
it's done.
When ECB had to manage the euro crisis, it did with just a few words -
doing whatever it takes. But the Council followed them with a major effort
to convince political leaders, who ultimately backed the plan in public.
They also worked to address the concerns of critics, by devising
conditionality measures for bond purchases. In policy, there is always
trade-off between how decisively you act and how widely you consult. In
a crisis, the trade-off becomes very difficult indeed, but it doesn't have to
be impossible. I think a useful term here is one we used a lot in South
Africa during the transition to democracy: 'sufficient consensus'. It meant,
given the importance of moving forward, you can't permit filibustering, but
you also can't make decisions unilaterally, and ride roughshod over
opponents. The ECB team did a masterful job of achieving sufficient
consensus, and I think that's what central banks should aim for in future
financial crises.
Finally, on monetary stability, for once I am concerned about too little
inflation. In emerging markets we still mostly worry about inflation being
high, but some advanced economies keep on missing their targets from
below. Frankly, it doesn't seem to me so terrible to have price stability.
That was the original goal with 2% inflation targets - the idea was to get
an inflation rate households and firms wouldn't notice. The problem with
winning the war on inflation, however, is that the only price movements
left tend to be temporary, from supply shocks. This makes it easy to forget
the responsibility of monetary policy for inflation. Indeed, the so-called
Modern Monetary Theorists even think you can do away with independent
central banks and tackle inflation with other tools. Well, if you build a
maximum security jail and there are no escapes, does that prove you
didn't need to build a jail? I think it proves you built it right.
The same goes for inflation. Price stability is proof of the success of
independent central banks, not an argument for their abolition. But I worry
there's a new generation coming of age in the advanced economies who
have never experienced inflation, and won't appreciate that subtlety.
Ladies and gentlemen, in conclusion, central banks may be under attack,
but they deserve to be defended. They have been principled agents,
serving the interests of their citizens, mostly with more effectiveness than
people usually get from their governments. There are any number of
institutions needing reform in this world. It would be best if the energy of
our critics, and our defenders, could be directed to those other causes
instead. Meanwhile, for central bankers, we should always bear in mind
that independence is not a birth-right, but something we need to get up
every day and earn. Our insulation from day-to-day politics creates a
special responsibility to do our jobs right, and to be transparent and
accountable so that our principals, the citizens, can see we are living up
to this privilege.
Thank you.
[1] Debelle, G. (1996) "Central bank independence: a free lunch?" IMF Working Paper 96/1; Alesina,
A., & Summers, L. (1993). Central Bank Independence and Macroeconomic Performance: Some
Comparative Evidence. Journal of Money, Credit and Banking 25 (2), 151-62.
[2] https://www.bis.org/review/r100527a.pdf
[3]
This account draws on the memoir of the central bank governor for the period 2012-2014. See
Panicos Demetriades (2017) Diary of the Euro Crisis in Cyprus
[4] The initial bail-in arrangements included insured deposits, but these were exempted when it
became clear breaking the insurance guarantee would be a major error, not least because of the
spillover risks. The deposit guarantee threshold was €100,000.
[5] For details, see Demetriades, Ibid., especially chapter 15, 'Toxic Fallout'
[6] "A blow against independence" The Economist, 10 March 2014. Available at:
https://www.economist.com/free-exchange/2014/03/10/a-blow-against-independence
[7]
This discussion draws on Paul Tucker (2018) Unelected Power, Princeton, New Jersey: Princeton
University Press
[8] "The bank that failed" The Economist, 20 September 2007. Available at:
https://www.economist.com/leaders/2007/09/20/the-bank-that-failed
[1] Kevin Granville (2017, June) "A president at war with his Fed chief, 5 decades before Trump" New
York Times, Available at: https://www.nytimes.com/2017/06/13/business/economy/a-president-at-
war-with-his-fed-chief-5-decades-before-trump.html
[2] Burton A Abrams (2006) "How Richard Nixon pressured Arthur Burns: Evidence from the Nixon
tapes" Journal of Economic Perspectives (20:4) Available at:
https://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.20.4.177
[9] For an overview, see Norimitsu Onishi & Selam Gebrekidan (2018, December 22) "In Gupta
Brother's Rise and Fall, the Tale of a Sullied A.N.C." The New York Times. Available at:
https://www.nytimes.com/2018/12/22/world/africa/gupta-zuma-south-africa-corruption.html
[10]
The banks themselves were also called in by senior government officials and accused of being
anti-transformation, of perpetuating what was called 'white monopoly capital'. Tehillah Niselow
(2018, September 24) "SARB warns of 'catastrophic' impact if banks kept Gupta accounts open"
Available at: https://www.fin24.com/Companies/Financial-Services/sarb-warns-of-catastrophic-
impact-if-banks-kept-gupta-accounts-open-20180923; "Editorial: Banks' Gupta testimony reveals
ANC's financial illiteracy" Available at: https://www.businesslive.co.za/bd/opinion/editorials/2018-
09-21-editorial-banks-shocking-gupta-testimony/ (21 September 2018)
[11] "Zwane wanted SARB's wings clipped after Gupta blacklisting" Available at:
https://www.politicsweb.co.za/news-and-analysis/zwane-wanted-sarb-role-changed-after-gupta-
blackli, 31 August 2016
[12]
See Jeff Wicks (2018, October 14) "Holidays, flashy cars & 'mansions': Lifestyle of the VBS 'heist'
rich and infamous" Available at: https://www.timeslive.co.za/sunday-times/news/2018-10-13-
lifestyles-of-the-vbs-heist-rich-and-infamous/
[13] These details are drawn from Terry Motau "The Great Bank Heist: Investigator's Report to the
Prudential Authority" Available at:
https://www.resbank.co.za/Lists/News%20and%20Publications/Attachments/8830/VBS%20Mutual
%20Bank%20-%20The%20Great%20Bank%20Heist.pdf
[14] "Editorial: VBS - a tale of vast risk not vile racism"
https://www.businesslive.co.za/fm/opinion/editorial/2018-03-15-editorial-vbs-a-tale-of-vast-risk-
not-vile-racism/ (15 March 2018)
[15] Ivo Vegter (2018, 16 October) "VBS defenders expose the intellectual poverty of the race card"
Available at: https://www.dailymaverick.co.za/opinionista/2018-10-16-vbs-defenders-expose-the-
intellectual-poverty-of-the-race-card/
[16] "ABSA, public protector in court over apartheid-era bail