banking day drew to a close, a veritable flood of vouchers descended on the “ waste department ”. and our hero – who was known to be bright, keen and energetic set to work. shred the red ones he thought ; save the green ones. this, after all, is the “ waste department ” of a major banking institution. at approximately 2 : 45 p. m. that day, nelly, the mentor arrived to assist our hero : he who was known to be bright, keen and energetic. she said : “ we must now balance the total of the debits and the total of the credits in the accounts of the depositors … and the investors …. ” he looked, with horror, at the pile of shredded pink chits in the waste - bin : “ file 13 ” ; nelly had said before leaving. he looked again at the sign above him : it still read “ waste department ” ; and he left – never to return. now, had i been trained as a banker, this would never have happened. i would have known what was expected of the “ waste department ”, independently of nelly who wouldn ’ t have mattered. but i would not have been able to laugh as loudly as i did when, thirty something years later, i received a letter from the said bank stating that : we must conclude that your account was closed in the ordinary course of business … ” they don ’ t know what i know! the south african banking industry needs an institute of bankers to protect its depositors and its young from nelly – the mentor ; and from young people who are bright, keen and energetic but prone to improvisation when bored and unrestrained. the story of john law : a second story the story about john law, as told by professor j. k. galbraith 1 runs thus : law, a scotsman, arrived in france in 1716, in flight from a murder charge in england where he had been unduly successful in a duel. having run through a considerable inheritance he had for some years made his living from gambling. in france, however, he was able to persuade the authorities to grant him – and his brother – the right to establish a bank with capital of 6 million livres or about 250 000 english pounds : banking being then virtually unknown in france. the bank was authorised to issue notes and did so – granting loans to the state. the government then used the notes to pay its expenses and pay off its creditors, whilst

and the moral of this story is this : the miracle of money creation by a bank may stimulate industry and trade – the upward phase of a business cycle in modern language – and give almost everyone a warm feeling of well being. but taken to excess, this miracle may result in a terrible day of reckoning. how to have the wonder without the reckoning? that is the question. mankind has progressed somewhat from the times of the 1720 ’ s with the creation of modern central banks whose functions typically include an element of oversight over the banking system. but the cupidity of certain people is eternal ; and requires eternal vigilance. beware of financial geniuses. this, i would like to suggest to you, provides the best firm reason for the continued existence of the iob. it must equip all those who are going to work in the banking system with the requisite set of j. k. galbraith ( 1975 ) money : whence it came, where it went, penguin books ethics with which to restrain people ’ s greed and cupidity : and protect bright, keen and energetic young men – and women – from the ways of nelly, the mentor, by providing them with the requisite training. that done, we will all proudly be able to assert as we look back on our contributions to a safe and sound banking system, “ finis coronat opus ”. thank you for your attention. ndi gqibile.