the fact that south africa ’ s inflation has been below the inflation rates of the united states, the united kingdom and even germany, in recent months. perhaps more relevant, we have not seen target misses of the scale experienced by many of our peers, and unlike those countries, we have page - 6 - of 8 not had to raise rates well into restrictive territory. the sarb is not happy about our target breach, but given what is happening to the world, neither our inflation rate nor our interest rates look especially onerous. it ’ s actually a reasonable outlook, given the worst global inflation shock in a generation. my second observation is an historical comparison. a decade ago, during the global taper tantrum, south africa was one of the most - affected countries. for instance, we were included in the grouping known as the ‘ fragile five ’. in 2020, during the onset of the covid - 19 shock, south africa was once again identified as a vulnerable country. for example, adam tooze published a widely read essay in foreign policy describing the coronavirus as the ‘ biggest emerging market crisis ever ’, which included the claim that, and i quote, “ at the head of the list of vulnerable countries is south africa ”. this year ’ s financial market storm has hurt a wide range of countries. the experiences of the worst hit, like sri lanka, have reminded us once again that macroeconomic stability is precious. it ’ s striking, however, that of the fragile five from 2013, only one country, turkey, is in danger of an acute macroeconomic dislocation today. yes, south africa remains vulnerable to external shocks, and this keeps us awake at night. but south africa ’ s resilience during this stress episode is very welcome. we have benefitted from some good luck, mainly from higher commodity prices. in large part, the macroeconomic choices of the past few years have also reduced fragility. this reflects necessary fiscal policy decisions, especially around the public sector wage bill, as well as a prudent monetary policy. there are many accounts being written now of what central banks got wrong, that made the ongoing inflation surge possible. reading them, i realise that despite the criticisms – we at the sarb are sometimes attacked for not being adventurous – it is clear that when central banks do become adventurous the consequences can be even more unpopular. page - 7 - of 8 conclusion to conclude, looking back over the past – very exciting – three years

few regulators and virtually no bankers saw these limitations. beliefs in efficient, selfequilibrating markets fed a reliance on market incentives that entered the realm of faith. 6 as michael sandel has observed, we moved from a market economy towards a market society. 7 this reductionist view of the human condition is a poor foundation for ethical financial institutions needed to support long - term prosperity. to help rebuild that foundation, bankers, like all of us, need to avoid compartmentalisation or what the former chair of hsbc, stephen green, calls “ the besetting sin of human beings. ” 8 when we compartmentalise, we divide our life into different realms, each with its own set of rules. home is distinct from work ; ethics from law. in the extreme, as ed clark observed, “ bank leaders created cultures around a simple principle : if it ’ s legal and others are doing it, we should do it too if it makes money. it didn ’ t matter if it was the right thing to do for the customer, community or country. ” 9 to restore trust in banks and in the broader financial system, global financial institutions need to rediscover their values. this was the conclusion of research conducted here at western. 10 for companies, this responsibility begins with their boards and senior management. they need to define clearly the purpose of their organisations and promote a culture of ethical business throughout them. r. rajan, “ when money is the measure of all worth, ” in fault lines : how hidden fractures still threaten the world economy ( princeton, n. j. : princeton university press, 2010 ). t. padoa - schioppa, “ markets and government before, during, and after the 2007 - 20xx crisis, ” ( per jacobsson lecture, 27 june 2010, basel, switzerland ). michael j. sandel, what money can ’ t buy : the moral limits of markets ( new york : farrar, straus and giroux, 2012 ). s. green, good value : reflections on money, morality and an uncertain world ( london : allen lane 2009 ). e. clark ( remarks delivered at the bank of canada annual economic conference, “ financial intermediation and vulnerabilities, ” ottawa, 2 october 2012 ). j. gandz, m. crossan, g. seijts, and c. stephenson, “ leadership on trial : a manifesto for leadership development, ” richard ivey