A financial analyst Michael Dawson has indicated that the banking sector reforms undertaken by government, have strengthened local banks and made them more resilient to shocks.<\/strong><\/p>\nDr. Dawson was responding to a statement by the Speaker of Parliament, Alban\u00a0 Bagbin that the Government erred in not supporting local banks to succeed.<\/p>\n
\u201cI think clearly, the Speaker doesn\u2019t understand the essence of the reforms. I will urge Government to engage the Speaker to educate him on the relevance of the reforms,\u201d he said.<\/p>\n
He added \u201cIf you assess the balance sheets of local banks currently, you will clearly see that the financial health of the Ghanaian-owned banks are stronger compared to the period before the cleanup exercise. \u201c<\/p>\n
It is better to have fewer local banks with strong financial capacity, than having many weak local banks unable to drive economic development, Dr Dawson further explained.<\/p>\n
\u201cI can tell you that, most of the local banks breached several banking regulations.They had governance issues.You had a situation where loans were given to family and friends without proper documentations.Depositors funds were diverted to build businesses of shareholders. Some depositors were not getting back their funds from some of the financial institutions.<\/p>\n
In fact the financial system at the time, was on the brink of total collapse.<\/p>\n
Poor business practices and weak capital positions of the banks and financial institutions were visibly seen. The liabilities of some of the local banks were more than their assets.<\/p>\n
You also had a situation where some of the local banks were just surviving on liquidity support from the Bank of Ghana and putting depositors\u2019 funds at risk.<\/p>\n
The Government rather intervened to ensure that customers do not lose their money.<\/p>\n
\u201cI think the Speaker is unaware of the Government\u2019s support to the local Banks.<\/p>\n
After the clean up, the Government created the Ghana Amalgamated Trust (GAT) to guarantee capital injection for five local banks. This demonstrates government\u2019s commitment in ensuring that the local banks are able to support economic development.<\/p>\n
The robustness of the banking sector is due to the financial sector reforms.<\/p>\n
The central bank indicated that the reason why most banks were able to withstand increased withdrawals and met depositors\u2019 demand for cash in the lockdown period, was due to the fact that banks were solvent and well capitalised.<\/p>\n
The remarkable resilience exhibited by the banking sector over the two-year period is due\u00a0 to\u00a0 the comprehensive financial sector reforms that took place before the Covid-19 pandemic struck in 2020.<\/p>\n
The reforms has led to the stability and resilience of the financial sector.<\/p>\n
Source: 3news.com|Ghana<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"
A financial analyst Michael Dawson has indicated that the banking sector reforms undertaken by government, have strengthened local banks and made them more resilient to shocks. Dr. Dawson was responding to a statement by the Speaker of Parliament, Alban\u00a0 Bagbin that the Government erred in not supporting local banks to succeed. \u201cI think clearly, the […]<\/p>\n","protected":false},"author":1,"featured_media":1205939,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[72],"tags":[4345,16322,1325,932,4986,1030],"class_list":["post-1243005","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-analyst","tag-cleanup","tag-financial","tag-sector","tag-speaker","tag-wrong"],"_links":{"self":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/posts\/1243005","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/comments?post=1243005"}],"version-history":[{"count":0,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/posts\/1243005\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/media?parent=1243005"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/categories?post=1243005"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/tags?post=1243005"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
![\"\"](\"http:\/\/www.ghanamma.com\/wp-content\/uploads\/2022\/11\/Speaker-Alban-Bagbin-gavel-696x461.jpg\" "\\"Speaker")