Financial Crime World

Bank of Ghana Intensifies Regulatory Efforts to Ensure Financial Stability

The Bank of Ghana has taken significant steps to ensure the stability of the financial system by implementing various regulatory measures. According to a recent report, the institution is committed to promoting the safety and soundness of regulated financial institutions (RFIs) in order to protect depositors’ funds.

Regulatory Measures

  • Periodic On-Site Examination: Supervisors visit RFIs to assess certain aspects of their operations based on risk profiles, and the findings are reported and recommendations implemented continuously.
  • Stress Testing: The institution undertakes stress tests on the banking industry, taking into consideration the prevailing macroeconomic conditions in the country. This ensures that RFIs are resilient to potential shocks and can withstand economic downturns.

Collaboration with Regulatory Bodies

The Bank of Ghana collaborates with other regulatory bodies within the financial services sector to promote and maintain stability. The Financial Stability Council was established to identify and evaluate threats, vulnerabilities, and risks to the stability of the financial sector.

Supervisory Approach

  • Consolidated Supervision: The institution assesses supervised entities on a group level.
  • Memoranda of Understanding (MOUs): Home and host supervisors share supervisory information through MOUs signed between them.
  • International Cooperation: The Bank of Ghana engages with external stakeholders, including international associations, to stay abreast of emerging issues affecting the banking industry. Regular workshops, forums, and meetings are held with stakeholders to discuss matters related to banking supervision.

Capacity Development

The institution strives to continuously strengthen regulation, supervision, and practices by building the capacity of supervisors and the banking industry through internal staff or external consultants. The Bank of Ghana has received support from international organizations such as:

  • International Monetary Fund (IMF)
  • AFRITAC West 2
  • World Bank

Response to Emerging Issues

In response to emerging issues, the Bank of Ghana has implemented various measures to address the effects of the COVID-19 pandemic on the economy. The institution also issued regulatory guidance on the application of IFRS expected credit loss (ECL) impairment model in response to the pandemic.

Future Plans

Going forward, the Bank of Ghana will continue to effectively regulate and supervise RFIs towards promoting their safety and soundness, ensuring the stability of the banking industry, and protecting depositors’ funds.