In a developing country like South Africa, reluctance to lend, or demand for an elevated risk premium, for fear of fraudulent or information-withholding behaviour, can easily limit the ability of the general public to access credit and, in turn, impede the path to a more balanced and inclusive economic growth framework.
Yet the developments of recent years illustrate the challenges that the industry is facing. The Libor scandal of 2012, when several banks were found guilty of colluding to misprice benchmark rates, illustrates the potential ramifications of unethical behaviour in one segment of the market.