Govt utterances to blame for collapse of savings and loans – former BoG Dep Governor

A former Deputy Governor of the Bank of Ghana (BoG), Dr Johnson Asiamah thinks that some savings and loans companies have collapsed because of how the cleaning up of the banking sector was done.

In a radio interview with Accra based Joy FM on Thursday, Dr Asiamah said the utterances of some government officials were to be blamed for the collapse of some of the savings and loans companies.

"Difficulties in the banking industry impacts on even the insurance sector, and impacts on savings and loans. So what I am saying is, if we had resolved uniBank in a more careful way, it would have saved not all the savings and loans, but it would have saved some of the issues."

“Sometimes, even your utterances, remember about three months ago, we heard the Finance Minister say we are going after the savings and loans institutions. We heard the Governor says the savings and loans institutions are next. So everybody that placed money with them, suddenly goes to them and say look, even though you people are probably strong, we are hearing this and we are not sure what will happen, give us our money.”

“Now, if you have any financial institution that gets a run on them like that, can they survive,” he questioned and said there were "serious regulatory flaws."

“When you notice that there are regulatory flaws, for which they have to go, let them go immediately and don’t be issuing threats, because when you do that, you are just telling people, go and remove your money from them and that is what even sinks them more," Dr Asiamah said.