BoG reiterates commitment to effectively supervise financial institutions
The Bank of Ghana’s efforts in promoting a safe and sound banking industry have received commendations from stakeholders. The central bank has reiterated its commitment to effectively regulate and supervise regulated financial institutions (RFIs) towards promoting the safety and soundness of the institutions while ensuring the stability of the banking industry.
In line with this objective, the Bank of Ghana has continuously strengthened the regulation, supervision, and practices of regulated institutions. It has built the capacity of supervisors and the banking industry through the use of internal staff or external consultants. The central bank has also received capacity development support from the International Monetary Fund (IMF), AFRITAC West 2, Bank of England, Toronto Centre, and World Bank.
The IMF, through funding support from the Swiss State Secretariat for Economic Affairs (SECO), continues to provide long-term technical assistance aimed at building the capacity of supervisors. The Bank of Ghana has also recently engaged a long-term technical expert for banking supervision in the areas of Basel II/ III Capital Framework, Risk-Based Supervision, and Climate-Related Financial Risk.
To deal with the effects of the Covid-19 pandemic on the economy, the Bank of Ghana issued fiscal policies, supportive monetary policies, and supervisory/regulatory interventions in March 2020. These interventions ranged from capital to liquidity reliefs. The central bank also issued regulatory guidance on the application of IFRS expected credit loss (ECL) impairment model in response to the COVID-19 pandemic. These intervention measures were in line with international best practices all over the globe.
The Bank of Ghana’s engagement with external stakeholders, including the Institute of Chartered Accountants, Ghana (ICAG), and the Ghana Association of Banks (GAB), is also crucial in ensuring that bank supervisors are up-to-date with matters affecting the banking industry. The regular workshops, forums, and meetings with stakeholders provide a platform for discussions on emerging issues related to the banking industry, which is vital in promoting a stable and resilient financial sector.
The Bank of Ghana’s regulatory reliefs to the RFIs that fully participated in the Domestic Debt Exchange Programme (DDEP) are meant to alleviate the potential impact of the DDEP on RFIs. This move is in line with the central bank’s objective of promoting the safety and soundness of institutions and ensuring the stability of the banking industry.
As the ever-changing banking environment presents emerging issues, the Bank of Ghana has shown a commitment to dealing with them effectively. The central bank’s continuous efforts in promoting a safe and sound banking industry are highly commendable and should be sustained.
