A Financial Analyst Michael Dawson has responded to claims that the financial sector clean –up which industry players said ensured that the financial sector is solid , robust and resilient was Ken Ofori-Atta ‘s idea.
The decision to undertake the reforms in the financial sector was mooted by the International Monetary (IMF), thus, the clean-up was an IMF Conditionality.
“You remember the asset quality review which was executed during the NDC era. The asset quality review gave a sense of the state of the banks. Former Finance Minister Seth Tekper and Governors appointed by President Mahama are aware of the malfeasance which was discovered after the asset quality review of the Banks.
“During the NDC era, the IMF published several reports warning the Bank of Ghana to take some corrective measures within the banking sector, but the NDC government failed to clean up the sector.
“I think we should stop politicizing the benefits of the banking sector reforms. The reforms have led to stability and confidence in the financial sector.
“I can tell you that, some depositors were not getting back their funds from some of the financial institutions. Some of the banks had also breached several banking regulations. Indeed, the financial system at the time, was on the brink of total collapse.
“The central bank had clearly explained that the clean-up was based on poor business practices and weak capital positions of the banks and financial institutions. I am aware that the liabilities of some of the banks were more than their assets,” he said.
Mr Dawson made these comments in a write up following a statement by Mensah Thompson, the Executive Director of the Alliance for Social Equity and Public Accountability on Accra FM’s morning show that the banking sector reforms was destructive to Ghana’s economy.
“I will say that the resilience shown by the banking sector is due to the comprehensive financial sector reforms that took place before the Coronavirus pandemic. You can imagine what would have happened if the banking sector reforms wasn’t done. We would have woken up one day to see a collapse of the Ghanaian economy. The measures taken safeguarded the investments of 4.6 million depositors. There is confidence now in the sector. The exercise was crucial for stability and confidence in the financial sector” Mr Dawson said.
“I think Mensah Thompson doesn’t understand the issues in the banking space. I think we should commend the Bank of Ghana for rather being bold and courageous to undertake the banking sector reforms,” he stressed.
Source: 3news.com|Ghana