- According to one of South Africa's biggest banks, land expropriation could lead to a banking crisis
- The CEO of Nedbank, Mike Brown, believes that expropriation could negatively affect the money of depositors when property prices are affected
- Brown says expropriation is already having negative effects on investments
According to Nedbank, one of South Africa's biggest banks, land expropriation without compensation could lead to a banking crisis.
The bank's CEO, Mike Brown, addressed the Parliament’s joint constitutional review committee that has to decide whether or not the Constitution shouldn't be changed.
Brown told the committee that it is a bad idea to use the Constitution as a "scapegoat" for the lack of land reform, according to a report by EWN.
The bank says it is fully behind the government's land reform plans but feels it has a duty to warn of the consequences.
Depositors' money could be endangered by a wide-scale land expropriation without compensation. Negative impact on the price of property could impact confidence in the banking system and this could lead to a banking crisis.
The CEO went on to say that currently, the Constitution is not hindering land reformation. Brown added that as things are now, land expropriation is already affecting the investment climate negatively.
Nedbank is a respected bank in South Africa and Brown's worries shouldn't be taken lightly.
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