2002-05-27: Statement by the Reserve Bank on the settlement agreement between the Exchange Control Department of the South African Reserve Bank and Deutsche Bank AG, Johannesburg branch
Last Modified Date:
2020-10-08, 08:14 PM
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The Governor of the South African Reserve Bank, Mr Tito Mboweni, today said that in discussions about Deutsche Bank’s structured transactions, conducted on behalf of three South African companies, both the Reserve Bank and Deutsche Bank had agreed to keep details of the final settlement agreement confidential. Given the leakage of partial information, the Reserve Bank, Deutsche Bank and the Commission of Inquiry into the Rapid Depreciation of the Exchange Rate of the Rand are in discussions as to what information may be released. Mr Mboweni, said that the Reserve Bank had been reviewing Deutsche Bank’s structured transactions since early October last year, some months before the Commission was established. The aim of the review was to establish if the transactions and the content of the applications Deutsche Bank made on behalf of these three companies had been fully compliant with the exchange control regulations. Evidence at the Commission by various parties indicated that the timing of the structured deals meant that they were not likely to have contributed to the rapid depreciation of the Rand in the last quarter of 2001. However, given the fact that the structured transactions were a subject of discussion at the Commission, it was important for the Reserve Bank and Deutsche Bank to indicate to the Commission how the alleged contraventions of exchange control had been resolved. At the in-camera hearing, full disclosure was made to the Commission. This was done in this manner because of the perceived market and price sensitive nature of the information. In its day-to-day functioning, the Reserve Bank constantly deals with issues of confidentiality. This is standard practice for central banks the world over and is an integral part of their functioning in the interests of their clients and their economies. South Africa is no different. But given the fact that Deutsche Bank has indicated that they have no problem with the settlement agreement between them and the Reserve Bank being made public, the Governor is of the view that the matter is now in the Commission’s hands. The Governor has no objection to the settlement agreement being made public.