House Chairperson, the ANC has a clear view on this matter; safe to say that we agree with the broad understanding that the opposition has. We want to further clarify the premise underlying this amendment, namely that the existing remuneration structures create perverse incentives to engage in risk behaviour which may pose substantial risk to the soundness of the South African banking system.
The successes of banking institutions, like most business enterprises, rely on their capability to attract the best available talent. Generally, the primary bargaining tools employed by banks are financial incentives. This leads a bank to offer progressively aggressive remuneration packages for the executive due to the performance nature of the industry. Remuneration packages tend to rely on lofty targets, which can encourage reckless behaviour. I thank you.
Bill read a second time.