BoG intensifies effort to implement Basel 2, 3 to enhance risk management

The Bank of Ghana (BoG) has revealed its plan to start the implementation of the Basel 2 and 3 in 2018 as it seeks to enhance risk management and financial stability in the banking sector according to Deputy Governor of the Central Bank, Dr. Johnson Asiama.

Dr. Asiama noted that the move will prepare the banking sector for risk management practices that commensurate with the kind of services that are rolled, adding that banking institutions that adopt global and country specific best practices will take proactive and not a reactive approach to risk management.

Speaking the at the Risk Summit Africa organized in Accra by Innovare and EMI-group, the regulator explained that Basel 2 and 3 largely aims at strengthening the solid foundation of prudent capital regulation,

supervision and market discipline.

‘The central bank as regulators is committed to adopting international standards to ensure that banks hold capital reserves. The Basel II and III are rigorous risk and capital management requirements which have become even more crucial following the recapitalization of banks which exposes them to more risks.’ Dr. Asiama said.

Capping the number of Banks

Responding to a question on why the financial regulator has not made moves on capping the number of banks in the country, Head of Financial stability at the Bank of Ghana (BoG), Francis Blankson explained the capping the number of banks may siphoned financial sector of strong and emerging banks.

He added that, that notwithstanding the move by the Bank of Ghana to increase the minimum capital requirement for commercial banks in the country will force the merger of small banks.

‘We need deep pocketed banks to undertake heavy capital intensive projects that is why we are increasing the minimum capital requirement to force smaller banks to come together'.