Financial economists have called on the Bank of Ghana to bailout struggling indigenous local banks.
Failure to, they grimly warned, will lead to a total meltdown of the country’s financial sector.
The collapse of some seven indigenous banks—five of which were merged into one entity under the name Consolidated Bank of Ghana Limited (CBG) has led to what has been described as a panic withdrawal in the financial landscape.
One of the hardest hit is GN Bank. Its owner Dr Paa Kwesi Nduom called on government and the central bank to come to the aid of local banks after embarking on a nationwide tour to allay fears of customers against panic withdrawal.
Speaking on the Business Edition, Financial Economist Collins Appiah warned failure to bail out struggling firms will spell doom for the financial sector.
“Where we have gotten to now they (indigenous banks) are helpless. That’s why I support Dr Nduom by saying that we need government intervention. From the finance house [Banks] to savings and loans and microfinance level almost all of them are complaining. The government needs to step in, they need to bail companies out,” he said.
The Director of Business Operations at Dalex Finance Joe Jackson who also spoke on the programme said a swift intervention is needed to restore confidence in the financial landscape.
“What we are seeing is not just a matter of who are the first people to get affected. It’s like Ebola. I call it financial Ebola. If you don’t stop it and you don’t protect yourself, it will spread and catch up with everybody else.
“What we should be doing is finding ways to stop it so that even the institutions that are under pressure are resourced to payout until confidence is restored into the system,” he said.