Banking Consultant, Dr. Richmond Atuahene, says the interventions carried out by the Bank of Ghana to restore confidence in the financial sector is not enough.
His comment is in reaction to the International Monetary Fund’s suggestion that due to the impact of the debt exchange and the subsequent IMF programme, some financial institutions may face collapse, thus the need for government to encourage such institutions to enter mergers and acquisitions to prevent a financial sector collapse.
According to Dr. Atuahene, the banking sector especially has been hit hard by the domestic debt exchange programme triggering several international banks to begin capital planning.
However, he noted that local banks are unable to sufficiently capital plan for the next four years, despite the Central Bank’s support, thus calling for more action to be taken to forestall a banking sector collapse.
Speaking on JoyNews’ PM Express, he noted that losses to banking capital are only a portion of a myriad of challenges that the banking sector and the broader financial sector is saddled with as the country commences its IMF programme.
“From where I sit, it would be very difficult to say what we have put in place will be quite sufficient to deal with the programme for the next four years.
“Because it is not only the losses to the capital, as you said in your opening statement, the confidence in the industry, both in the financial industry including the banking sector is not going to recover as people think that it will recover. It’s going to take a long time.
“For the liquidity, I’ve always said that because of information asymmetry in the industry, nobody is running here and there look for their monies. And I believe that we could have done better because the banking sector or the financial sector would need at least 3billion to be able to recover. Including the pensions, insurance and the banks,” he said.