BoG moves to help banks manage risk
The Bank of Ghana (BoG) has initiated moves to help banks and specialised deposit taking institutions to develop effective risk management systems. The BoG intends to do this through revised guidelines and regulations that will strengthen its regulatory and supervisory framework.
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The Second Deputy Governor of the Bank of Ghana, Dr Johnson Asiama, who said that at the opening of the annual Risk Africa Summit in Accra on March 29, indicated that “the bank’s supervisory and regulatory framework under the new Banks and Specialised Deposit-taking Institutions Act will focus a lot more on helping banking institutions put in place measures that will ensure a sound and safe banking sector where risks are commensurate with the rewards.”
He said legislations and guidelines to that effect were currently being drafted and were expected to come out soon to improve the regulatory and supervisory framework of the Bank of Ghana.
“The Bank of Ghana, as part of its ongoing supervisory oversight, will continue to roll out various guidelines and regulations which are aimed at helping banks and specialised deposit taking institutions shore-up their risk management practices in line with each institution’s risk appetite and tolerant levels,” he said.
Banks must do more
Dr Asiama also urged banks and specialised deposit taking institutions to familiarise themselves with the intent and provisions in the new guidelines.
The Bank of Ghana, he said, had been guiding banks to put up a robust risk management system and had been sharing global best practices.
The Risk Africa summit was organised by Innovare, a knowledge and skills transfer provider and was on the theme “Strengthening financial services operations with risk management.”
It looked at the global risk management practices in banking and insurance institutions and also delved into the effects of legislative changes and how they should be dealt with.
Managing risk
The Chief Executive Officer of Innovare, Mr C.K. Bruce explained that risk management was key in managing any business entity, and for the banking sector, it was a critical part of their operations.
“This conference on financial services is to ensure that best practices in risk management is adhered to and practised by all the banks. You know of all the collapses, such as DKM and the rest, it was as a result of no proper risk management system and poor governance. These are issues that we need to address to strengthen the banking sector in Ghana,” he said.
The risk summit, he explained, would be held annually to sustain the dialogue on the need for banks to be risk averse by putting in place the needed systems.
“There are so many things happening in the banking sector. There are always new risks, so we have to put it together to ensure that they gather to discuss some of these things on a continual basis,” he said.