Banking in the 1970s

Abstract

Four features characterised and influenced banking in the 1970s: moderate growth in sharp contrast to the experience of the previous decade, a widening of the range of services provided, South Africanisation and persistent government interference in the operation of the market. The first of these occurred despite the poorer performance of the economy and was driven by the increase in the price of gold and the large infrastructure projects embarked upon in this decade. The second was a response, albeit a somewhat delayed one, to the growth of the previous decade. Specialised financial institutions and a money market could not emerge until the economy had expanded sufficiently to support such institutions. While a money market had begun to take shape in the 1950s, it was in the 1960s that a functioning local money market developed. The expansion of the manufacturing sector was the driving force behind the development of a wide range of specialised financial institutions. The repatriation of local businesses into South African ownership also made great progress in the 1970s. There had been pressure on the banks for many years and it was fitting that both the imperial banks, Standard Bank and Barclays DCO should be incorporated in South Africa and have some local shareholders and a portent of things to come that the small Netherlands Bank should go all the way and become a wholly owned South African bank. The new specialised institutions, merchant banks, discount houses and hire purchase banks were also likely to be locally owned, though the early years of the decade saw a number of London houses opening branches in Johannesburg.