{"id":691811,"date":"2019-08-26T10:51:18","date_gmt":"2019-08-26T10:51:18","guid":{"rendered":"
\n\t\t\n

Dr. Ernest Addison<\/strong><\/p>\n\n\n\n

MANAGEMENT OF the\nBank of Ghana (BoG) has blamed former managers of the bank for supervising\ndevelopments that led to the crisis that has rocked the country\u2019s banking\nsector in recent times.<\/"},"modified":"2019-08-26T10:51:18","modified_gmt":"2019-08-26T10:51:18","slug":"bog-blames-former-management","status":"publish","type":"post","link":"https:\/\/www.ghanamma.com\/2019\/08\/26\/bog-blames-former-management\/","title":{"rendered":"BoG Blames Former Management –"},"content":{"rendered":"

<\/p>\n

\n

Dr. Ernest Addison<\/strong><\/p>\n

MANAGEMENT OF the
\nBank of Ghana (BoG) has blamed former managers of the bank for supervising
\ndevelopments that led to the crisis that has rocked the country\u2019s banking
\nsector in recent times.<\/p>\n

BoG\u2019s management was
\nreacting to certain statements made by a former Second Deputy Governor, Dr.
\nJohnson Asiama, recently on Accra-based Joy FM<\/em><\/strong> with regard to some of the
\ncollapsed banks. Dr. Asiama
\naccused the central bank of opting for an expensive offer to save ailing banks
\nwhile better offers were rejected. <\/p>\n

Reasons for blaming former management<\/strong><\/p>\n

Reacting to the
\nstatement in a press release dated August 23, 2019 the BoG stated: \u201c\u2026. The then
\nmanagement of the Bank of Ghana failed to implement these actions that would
\nhave halted the eventual collapse of a multitude of financial institutions.\u201d<\/p>\n

\u201cTo the contrary,
\nthe then management of the Bank of Ghana turned the other eye, while loading
\nthe insolvent banks with massive amounts of liquidity support including by
\npassing such liquidity support through other banks as conduits, and taking no
\nsteps to ensure that such support was used for the benefit of providing
\nliquidity to depositors,\u201d it averred.<\/p>\n

\u201cWhat Dr. Asiama
\nconveniently fails to state is that steps to hold these failed institutions
\naccountable started when Dr. Addison was appointed Governor in April 2017. The
\nfinal determination to resolve the two banks was made at the end of July 2017
\nand executed in August 2017,\u201d it added.<\/p>\n

Further insight<\/strong><\/p>\n

The BoG further
\nexplained that when wind of the Bank of Ghana\u2019s impending action became rife,
\nthree banks, namely GCB, Republic Bank Ghana Ltd. (and its parent company,
\nRepublic Bank Holdings), and a Moroccan bank, submitted bids to the Bank of
\nGhana to be allowed to acquire the good assets and deposits of the two banks
\nafter the revocation of their licences. <\/p>\n

However, \u201cThe
\nBank of Ghana\u2019s decision to accept the bid submitted by GCB Bank was based on a
\nnumber of important considerations including: (i) its indigenous ownership, so
\nthat two Ghanaian banks were not being given to foreign owners; (ii) the
\nrelatively higher values it placed on the net assets of the two banks; (iii)
\nits commitment to maintaining a relatively greater number of branches and
\nemployees of the two banks; (iv) its vast physical presence across the country to
\nensure that the customers of the two banks had access to its strong branch
\nnetwork and (v) its relatively stronger capital position which would allow it
\nto better absorb any shocks from the acquisition,\u201d it explained.<\/p>\n

No better proposals<\/strong><\/p>\n

Besides, BoG
\naverred: \u201cIt is also instructive to note that Dr. Asiama was Deputy Governor at
\nthe time when the decision was taken to revoke the licences of UT Bank and
\nCapital Bank, and had every opportunity to propose any other strategy for
\naddressing the insolvency of the said banks if he felt there was a better and
\nmore effective strategy. His approach before the new management team took over
\nwas simply to do nothing in the interest of depositors and the financial system
\nas a whole, and to rather dole out large amounts of public funds to failed
\ninstitutions whose shareholders dissipated these funds on private ventures at
\nthe expense of depositors, employees, tax payers, and other claimants. The
\nclaim that the approach to resolving the two banks resulted in the distress of
\nthe savings and loans and microfinance sectors is pathetic, to say the least.\u201d<\/p>\n

Dr Asiama\u2019s reaction<\/strong><\/p>\n

Dr Asiama has
\nexplained that there was a roadmap (or strategy) for the recapitalization banks
\nand withdrawal of liquidity and hence these should have been followed. <\/p>\n

\u201cI suggested for example that if Unibank\u2019s claims on government were paid early in 2017, we could have prevented the daily clearing failures that persisted and worsened the early redemptions and withdrawal of deposits.\u201d<\/p>\n

BY Samuel Boadi <\/strong><\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"

Dr. Ernest Addison MANAGEMENT OF the Bank of Ghana (BoG) has blamed former managers of the bank for supervising developments that led to the crisis that has rocked the country\u2019s banking sector in recent times. 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