We’re building a robust financial sector — BoG assures

The Bank of Ghana (BoG) has indicated its resolve to build a robust banking sector in the country with the introduction of new measures.

The assurance, which has become necessary in the wake of liquidity challenges being faced by some financial institutions, is to reinforce the BoG’s mandate of ensuring a stable financial system to spur economic growth.

The second Deputy Governor of the BoG, Mrs Elsie Addo Awadzi explained that any financial system that failed, took a much longer time to recover and it was ,therefore, important to build a solid system based on lessons learnt from other countries.

“If you have a situation where you don’t have a strong financial system, your entire financial system is at risk. When you look at examples of financial crises in the past, it took countries sometimes 10 years to recover. “

“We have been blessed in Ghana and didn’t get hit by the global financial, but we have to learn from the lessons to know what to and what not to do,” she said while speaking at a breakfast meeting organised by the Graphic Business and Stanbic Bank on improving solvency and liquidity in the banking sector.

She noted that the BoG would not shirk its regulatory mandate but would build a stronger financial system in the country.

“We take our mandate of ensuring a stable financial system very importantly. It is critical not only to the survival of the entire financial system but to our economy. We have taken a critical look at the current financial system and how to move forward, charting a stronger financial system that works for everyone,” she said.

New measures

Mrs Awadzi highlighted some of the new measures being put in place to ensure a stronger financial system to boost public confidence and trust.

They include the increase in the minimum capital requirement which banks are supposed to meet by December 2018, the implementation of Basel II and III capital frameworks by banks which will provide a more resilient capital base for banks and protect them from risk and the introduction of good corporate governance directives.

The BoG, she also explained, would introduce new requirements that bank shareholders, directors and senior managers would be expected to comply with before having anything to do with the banking sector.

“We are also coming up with bank holding regulations so that parent companies of banks are all regulated in a way that their dealings with banks do not create problems for the banks and depositors,” she said.

Customers’ role

Mrs Awadzi also urged customers to take keen interest in the operations of their banks and ask the right questions about what was being offered to them.

“The BoG is committed to doing its part, we expect directors and managers to do their part, and we expect users of the banking system to do your part by asking the right questions,” she said.

She also urged all stakeholders to support the BoG to carry out its regulatory actions against institutions that were found to be on the wrong side of the regulations to ensure that the entire financial sector was safe.

Breakfast meeting

Organised through a collaborative effort of the Graphic Business and Stanbic Bank, the meeting, which was the second in the series for the year, was on the theme, “liquidity and solvency management – boosting the health of banking in Ghana.”

It brought together stakeholders in the financial services sector to deliberate on how to address liquidity and solvency challenges in the banking sector.