Impact of financial sector reforms will be felt long-term — BoG
Head of Banking Supervision at the Bank of Ghana, Osei Gyasi has said the recent banking sector reforms should impact positively on the macroeconomy largely through the reduction in interest rates and a decline in non-performing loans among others.
While delivering a presentation at the first in a series of round table discussion with the banking industry organized by Integrity Magazine and sponsored by Fidelity Bank on the theme: “Ensuring Macro-Economic Stability Through Effective and Trusted Banking”, Mr. Gyasi said the central bank was applying a multifaceted approach to reforming the financial sector to ensure a long-lasting impact on the economy.
“So, as we try to reform the financial sector our objective is to look at the bigger picture, how it is going to impact on the macroeconomy. The vulnerabilities in the banking sector have been addressed through a recapitalization process and regulatory reforms geared towards introducing efficiency in the way business is conducted. The efficiency is also expected to trigger competition which in the long run should exert a downward effect on the interest rate,” he said.
At the start of the banking sector reforms in 2017, the Bank of Ghana (BoG) gave GCB Bank Ltd the green light to acquire UT and Capital banks, which was followed in 2018, by the consolidation of five local banks into what is now called the Consolidated Bank Ghana Limited.
The Bank of Ghana went on to further revoke the licenses of Premium Bank and Heritage Bank leading to a reduction in the number of banks from 35 to 23.
Round table discussions with the Banking Industry
According to the editor-in-chief and publisher of Integrity Magazine, the round table discussions are to serve as an opportunity for Banks to come together to brainstorm on steps that can be taken to ensure that they (the banks) contribute their quota to ensuring macroeconomy stability by ensuring that they are effective and trusted.