The Governor of the Bank of Ghana (BoG), Dr Ernest Kwamina Yedu Addison, has indicated that, the Bank has been able to clean up the banking sector within two years, through a comprehensive reform agenda the Bank embarked on.
At a press conference held in Accra on Friday, 4th January, 2019, Dr. Ernest Addison, explained that when the current Management of the Bank of Ghana took office in early 2017, they inherited a financial system which was under a considerable state of distress, with banks that were not meeting the capital adequacy requirement and others whose capital was eroded with high non-performing loans.
According to him, some of the banks were insolvent and illiquid, whereas others were solvent but illiquid. This state of affairs, Mr Addison indicated was largely as a result of poor corporate governance, false financial reporting, and insider dealings.
He intimated that, the Bank of Ghana had in the past continued to provide liquidity support to these failing banks, without addressing the underlying problems that led to the illiquidity and insolvency of these institutions.
“In short, the financial system had reached a tipping point and we could not have assumed business as usual,” he said.
On the backdrop of these challenges, the Bank of Ghana therefore embarked on a comprehensive reform agenda, with the objective of cleaning up the sector and strengthening the regulatory and supervisory framework for a more resilient banking sector.
As part of the reform exercise, the banking licences of seven (7) insolvent banks were revoked over the last sixteen months. However, Dr. Addison noted that steps were taken to ensure that they exited the market in an orderly manner.
The Banks were UT Bank, Capital Bank,
uniBank Ghana Limited, The Royal Bank Limited, Beige Bank Limited, Sovereign Bank Limited, and Construction Bank Limited
Read The Full Release Below;
INTRODUCTION
Ladies and Gentlemen, when the current Management of the Bank of Ghana took office in early 2017, the banking sector was faced with many challenges. We inherited a financial system which was under a considerable state of distress, with banks that were not meeting the capital adequacy requirement and others whose capital was eroded with high non-performing loans. Some of these banks were insolvent and illiquid, others were solvent but illiquid. This state of affairs was largely a result of poor corporate governance, false financial reporting, and insider dealings. The Bank of Ghana had in the past […]
