The Governor of the Bank of Ghana (BoG), Dr Ernest Addison, has disclosed that his outfit has acquired new state-of-the-art surveillance software that would enable them to effectively and accurately monitor and prevent financial institutions from the incidence of misreporting.
The Governor disclosed this at the 2020 edition of the Ghana Institute of Management and Public Administration (GIMPA) Biennial Law Conference series dubbed: “The Banking and Financial Sector Crisis in Ghana: Towards Sustainable Reforms.”
At the opening of the virtual conference held last week Thursday, Dr Addison expatiated that the software would enhance the analytical capacity of the supervision teams, and help with more effective reporting of supervisory concerns for appropriate and timely interventions.
Additionally, the Central Bank has increased resources to its departments that regulate and supervise the financial sector, by augmenting the staff strength of the Banking Supervision, Other Financial Institutions Supervision, and Financial Stability Departments to enhance their capacity, drawing on existing skills within the Bank of Ghana, as well as from the private sector.
The Bank has redesigned training programmes for supervisory staff to enhance the quality of policy development, examinations, and reporting on regulated institutions. “The bank is providing critical training and technical assistance to retool its supervisory staff to promote higher standards of professionalism and ethical behaviour, with the objective to ensure supervision teams are better equipped to identify early warning signs, enforce regulatory requirements, and ensure prompt corrective actions to moderate the risk of failure in the financial sector,” he said.
These measures, according to him, have become necessary, because the dissolved institutions had several deficiencies, due to some of them being set up overnight with little or no capital, and by persons with questionable backgrounds with little or no experience in running banks.
“A common thread was that they were all managed or controlled by shareholders with complete disregard for prudential norms and best practices in corporate governance. It was clear that they were set up to get access to depositors’ funds to finance other businesses of shareholders, or other related or connected companies.”
The Governor added that during the investigation of those 420 failed financial institutions, oligarchies were formed involving various groups of companies under the control of common shareholding, aided by their relationship with political authorities.
This also, coupled with BoG’s poor licensing regime, was what led to licences being issued without the appropriate due diligence on shareholders and their sources of capital.
On the COVID-19 pandemic, he said the Bank of Ghana had risen to the challenge with policy measures to protect the financial system and support the real economy, and that in March 20, 2020, the Bank of Ghana’s Monetary Policy Committee (MPC) announced a series of measures designed to mitigate the impact of the COVID-19 pandemic shock.
Rev. Daniel Ogbarmey Tetteh, Director-General of the Securities and Exchange Commission, on his part, said: “The Securities and Exchange Commission picked up the signs of the looming crisis in the asset management industry from on-site inspections, a risk assessment study, which highlighted worrying trends such as related party transactions, asset-liability mismatch, guaranteeing of returns, and also complaints filed at the Commission by investors who were having difficulty redeeming their investments placed with some of the fund management companies.”
He said a series of engagements with the affected fund management companies, geared towards a resolution of their issues, and by extension, to secure the protection of investors in line with their mandate were held.
However, when it was evident that these firms had failed to and were not in the position to perform their functions efficiently, honestly and fairly, the Commission took the decision to revoke the licences of 53 fund management companies, an action which was unprecedented in the history of the Commission.
The post BoG invests in surveillance software to ensure strict compliance appeared first on The Chronicle Online.
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