The Bank of Ghana (BOG) has urged financial institutions and stakeholders within the industry to embrace regulatory requirements as they are key to a healthy financial sector.
According to the BOG, the regulatory requirements and guidelines are necessary to operate a safe and sound financial sector.
Ghana’s financial sector is governed by the Basel II and III rules, a regulatory framework designed to strengthen financial institutions by placing guidelines pertaining to leverage ratios, capital requirements and liquidity.
For investors in the banking sector, these guidelines create confidence that, some of the mistakes made by banks that caused and contributed to the financial crisis in 2007-2008 will not be repeated.
Speaking at a Risk Summit Africa 2017 held in Accra, the second deputy Governor of the Bank of Ghana, Johnson Asiama called on stakeholders especially board and management of financial institutions to ensure the implementation of these requirements and guidelines to the latter.
“We, as regulators, will pursue our regulatory and supervisory functions by encouraging banks and other financial institutions to adopt and implement the Basel II and III, which seek to minimize systemic risk in the financial sector. But the board and management members must ensure that these rules are implemented.”
“Players in the financial sector are also expected to develop proactive risk management practices that would help them compete in the global economy. And it must be made known that strengthening financial service operations with risk management in the financial sector is a shared responsibility,” he added.
Dr Asiama also disclosed that, the Bank of Ghana’s full implementation of the Basel Regulatory Framework was scheduled for 2018.
“The full implementation of the Basel Regulatory Framework vis-a-vis the existing risk-based supervision will go a long way to prepare the banking sector for risk management practices that are commensurate with the kind of financial services and products that are rolled-out in the sector,” he said.
In line with this, the Bank of Ghana has created a unit of dedicated group of staff in the supervision departments to provide technical support for the Basel II and III implementation process.
The unit has the responsibility of preparing the supervision department and the banking industry.
The International Monetary Fund (IMF), he said, had given the BoG technical assistance (TA) to complement the initiatives under the programme.
“The required Technical Assistance (TA) is to assist in building capacity for the supervisory staff of the Bank of Ghana and the banking industry and also to develop a roadmap to build the structures necessary for implementation.”
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