BoG has failed to take responsibility for role in banking sector crisis – Prof Tagoe

A senior finance expert, Professor Noel Tagoe has expressed worry over the Bank of Ghana’s failure to take its portion of blame in the role it played in the recent banking sector crisis, which resulted in the collapse or otherwise closure of several financial institutions across the country.

Between August 2017 to somewhere 2019, the Bank of Ghana revoked the operating licenses of several financial institutions in the country citing their insolvency as the reason.

After months of clean up by government in the banking sector, a receiver appointed by the central bank announced that it has started payments of funds to all customers whose banks were affected in the process.

Speaking to GhanaWeb.com on the collapse of the banks and its impact on the economy, the former Executive Vice President of CIMA said he finds it very worrying that the Bank of Ghana is yet to fully assume responsibility in its failure as a supervisory body overseeing the operations of the collapsed banks.

“There was the failure of supervision by the Bank of Ghana and the thing that worries me is that the Bank of Ghana has not taken responsibility. They ought to have held up their hands and say that we messed up here, we will not mess up again and put things in order," he said.

In what could have been the best measure in managing the situation, Prof Tagoe said considering all the factors involved, the central bank had to choose between various options which included closing them and setting up new ones or changing the systems in place and replacing them.

He opined that as a way of saving jobs the best strategy the Bank of Ghana could have adopted was to restructure the affected banks.

“Do you close the banks and set up new ones? That depends on a lot of factors: one of it is if the culture is not right and you cannot change the culture, close the banks and set up something new to set up a new culture. Otherwise if you change the system with the same culture you’ll get us where we were.

"But my personal preference is to work with what you have. You restructure, you change the culture and you reenergise people. Then what I will do is to move the top management from there, because they are the people who caused it. And the reason why I would prefer that is primarily it preserves. Jobs.”