Financial Intermediaries in Settler Economies: The Role of the Banking Sector Development in South Africa, 1850–2000

This chapter explores the history of banks in the British colonies, which eventually became the Union of South Africa in 1910. It presents a systematic outline of the history of the banking sector, with references to the comparative development paths of other settler societies in the British Commonwealth. The coming of union in South Africa in 1910 did not alter the strategy of the banks, but it did trigger the second stage in the amalgamation movement. Three main consequences flowed from the amalgamation movement in South African banking. First, the creation of the banking cartel, the Register of Co-operation (ROCO), that fixed interest rates and commission charges. The second was the creation of a nation-wide bank clerk’s trade union (South African Society of Bank Officials (SASBO) ) that practically reinforced the conservatism in the sector and the third consequence was that very large banks would not be allowed to fail. Keywords:amalgamation movement; banking sector development; SASBO; settler societies; South Africa