Graphic Business to host BoG Governor on mid-review of banking sector
Stakeholders in the banking sector are set to dialogue on developments within the sector when the Graphic Business hosts the Governor of the Bank of Ghana (BoG),
Dr Ernest Addison, at a breakfast meeting in Accra next Wednesday .
It will be recalled that in August last year, the Bank of Ghana (BoG) revoked the
Liabilities of the two banks, according to the central bank, overwhelmed their assets, leaving the BoG with no option than to undertake a Purchase and Assumption transaction as the least costly method of dealing with a collapse.
The banks were “unable to develop an acceptable plan”, according to the BoG, although it made efforts to help both banks recover through private alternatives.
The central bank said there were “repeated agreements between the BoG and UT Bank and Capital Bank to implement an action plan to address these significant shortfalls.”
However, the owners and managers of UT Bank and Capital Bank were unable to increase their capital to address the insolvency and as a result, the central bank was left with no other option than to revoke their
Latest BoG action
Just last week, the BoG revoked the
The entities — the uniBank, the Royal Bank, the Sovereign Bank, the Construction Bank and the BEIGE Bank — were found to have committed various regulatory and financial breaches that made them insolvent and unfit to continue operations.
At a press conference in Accra,
“Consequently, the government has
The bond is to make up for the gap created by the liabilities and good assets assumed by the Consolidated Bank.
The collapse of the five banks into the Consolidated Bank was part of measures to holistically address the weaknesses in the banking sector, which have a ripple effect on macroeconomic indicators.
With this development, uniBank, which was put under rehabilitation in May this year, ceases to exist.
There have been mixed reactions to the latest developments within the banking sector with one school of thought describing the action of the governor as bold and necessary while the other school described it as a regulatory weakness, which the BoG should take responsibility for.
Others have argued that with the confidence in the sector fast waning, there is the need for drastic measures to restore the confidence of the public in the banking sector, particularly among the local banks which are doing well but are suffering from the mishaps of their competitors.
The meeting will, therefore, afford the governor the opportunity to reassure the public of the strength of the country’s banking sector by announcing a number of measures that will be expected to calm the nerves of the public.