ADDRESS ON BEHALF OF THE FINANCIAL SECTOR
Derek Cooper (Chairman of Standard Bank Group and Liberty
Group)
20 August 2002
I represent the financial sector, comprising the banks, the life
offices and the short-term insurers. We are very glad to be here
today, and to have had the opportunity to participate in this
constructive Nedlac process.
We are fully aware of the need for the economic empowerment of
all the people of this wonderful country. It would be futile to
believe that there can be prosperity for some, without there being
a reasonable level of prosperity for most. In that context, we are
mindful and supportive of Government's determination to make
appropriate changes to the structure and function of South Africa's
economy.
The financial sector is like the oil in an engine. Without oil
the economic engine will function defectively, if at all. So all
the parts of the engine are entitled to know whether the oil is
going to play its role enthusiastically, or reluctantly. On this
auspicious occasion, we, the financial services sector, therefore
commit ourselves to working in partnership with Government, labour
and the community to bring about those changes.
Today is, for us, a watershed. All four constituencies have
effectively been involved in putting together the framework
agreement which signifies a new beginning. The next step is to use
this framework agreement as the first input for developing the
financial sector charter. We are convinced that the establishment
of such a charter will be of great benefit to the sector and all of
us in South Africa. Correctly done, it could provide an impetus for
economic growth and development.
The financial services sector plays an enabling role in the
society in which it exists. It evolves in response to the
commercial and other economic needs of that society by being a safe
haven for the savings of the people and their institutions, and by
securely investing those savings on their behalf. The role played
by the industry is, therefore, pivotal to the stability of our
society, and is a reflection of our economic needs. The high regard
in which the South African financial sector is held internationally
reflects on our entire nation, and our ability to participate in
the global economy is dependent on that confidence.
Historically it has made a major contribution to that economy,
and on an ever-increasing scale during the last decade, to the
empowerment of the previously disadvantaged. I could, in fact,
devote much of my allotted time to listing and quantifying those
contributions.
But we are not here to reflect on past achievements. The
challenge for us is to work in partnership with Government and the
other stakeholders to ensure that the considerable financial,
intellectual and infrastructural resources of the sector contribute
to a better life for all.
Obviously one partner can't "make" a partnership on its own, any
more than one spouse can make a marriage on her or his own.
Partnerships and marriages are built on trust, and we accept that
we have as much to do in building that relationship of trust as
Government and the other stakeholders do. Trust is itself heavily
dependent on open communication, and that means ongoing and
frequent access at all levels of Government, and most particularly
to the decision makers. We both commit to, and appeal for a
commitment from Government and the other social partners to build
that trust and to open the lines of communication.
Partnership also requires understanding - understanding of the
needs of the other partner. We undertake to listen and to
understand the needs of Government, and the other constituencies.
And we appeal to you to listen to us and to understand our needs in
maintaining the financial sector as a national asset.
The stable environment, in which commercial agreements are
recognised and enforced, and which is a cornerstone of the South
African constitution, needs to be extended to all areas.
Moreover, the South African and international standards and
regulations for the provision of financial services are established
to ensure the public and international confidence on which the
financial sector is totally dependent. So we have no alternative
but to comply with those standards. As much as we have no future if
we do not play our role in uplifting and empowering all the people
of this country, it is our responsibility to retain the confidence
of all South Africans and the global financial community. That will
not be achieved unless we also maintain absolute standards of
integrity, reliability and sound corporate governance in all that
we do.
What of the future? We owe it to you to give some indication of
specifically what it is that we would be putting on the table. In
addition to what has already been set out in the Framework
Agreement and supporting documents, we give the following
commitments.
Because it is so topical at the moment, we give you the
assurance that we believe in the need for community re-investment,
and are committed to it. We need to work with Government to find
the appropriate formula for addressing the housing needs of the
poor, and simultaneously maintaining the appropriate South African
and international standards of sound banking practice.
As a nation we cannot exclude people who are HIV positive from
access to finance, nor can we deprive those who are incapacitated
by an AIDS related illness, or their dependents and particularly
AIDS orphans, of their housing. We therefore commit ourselves to
working with Government to establish a scheme in terms of which
mortgage borrowers under the age of 50 would be able to purchase
appropriate life cover, regardless of their HIV status.
As reflected in the Framework Agreement and supporting
documents, new classes of deposit-taking institutions are required
to serve the poor, and an appropriate regulatory system will have
to be established to accommodate them. But, in addition to that, we
commit ourselves to work with Government and the Reserve Bank to
develop a framework that facilitates the participation of those new
institutions in the payments system.
We are delighted to find ourselves in agreement with the
Department of Trade and Industry that specific strategies are
needed to support the robust development of small and medium
enterprises. They have the potential to lift us onto a higher
growth path and create significant numbers of jobs. We commit
ourselves to working with DTI in developing strategies, products
and services that will support those small and medium enterprises.
The integration of the financial institutions with which DTI is
currently involved will be central to the development of successful
strategies, and we ask to be allowed to participate in the process.
As decided by DTI, totally different strategies and institutional
support are necessary for micro and very small businesses.
The New Plan for African Development (Nepad) is one of the most
important initiatives for the future of the continent and the
member countries. It is essential that it succeeds. The banks
probably have the most extensive South African based distribution
network throughout Africa, and they have committed to put those
distribution networks in the service of Nepad, and particularly to
be used as a platform for engagement with the business people of
Africa.
Throughout the world, the financial services sector is measured
by its stability and the level of confidence which it enjoys
amongst its domestic and the international communities. In South
Africa we would also like to be measured by the contribution that
we make to fulfilling the needs of our nation's people. So if any
of the initiatives that we have proposed don't prove to be
appropriate to South Africa's circumstances, we undertake to
listen, and to sit down with the other constituencies and design
better ones.
For us, this day is a very significant one that signals a new
beginning. We would like to express our confidence in our social
partners, and we commit ourselves to working in service of the
broad interests of the economy of which we are merely a reflection.
The time for excuses - political, practical or otherwise - has
passed, and has been replaced by an urgent need for sound decisions
and delivery in all sectors.
Contact:
The Banking Council:
Claire Gebhardt-Mann
GM Strategy & Communications
Tel (011) 370-3505 or 082-450-9193
Bob Tucker
Chief Executive Officer
Tel (011) 370-3552/3
Life Offices' Association of South Africa (LOA):
Gerhard Joubert
Executive Director
Tel (021) 423-2233 or 083-453-9810
Coenie Meyer PR
Tel (021) 419-8732 or 082-448-1796