and this led to most of the foreign lenders cutting off their credit lines to the bank and recalling their credits thereby creating serious liquidity squeeze to the bank. also, very high executive compensation schemes were being operated by the affected banks which were not commensurate with their operations. the risk and earnings profile of the banks could not support the compensation schemes. non - executive directors of the banks compromised their independence and fiduciary duties to serve as checks on executive directors. this was because rewards such as 9 | page business class air tickets were being granted to them annually. interference by non - executive directors in the day - today administration of the banks weakened the management oversight function of executive directors. some non - executive directors were also acting as consultants to the same banks with no clear mandate, which gave rise to conflict of interest situations. non - adherence to credit management principles and procedures as the banks were heavily exposed to insiders and related parties. there was also no evidence of interest payments on these investments. the investments were therefore impaired, but some members of the board at the time accepted the responsibility to pay off the said amount through a board resolution. diversion of funds to holding companies and their related parties was wide - spread. in the case of one bank, placements could not be traced to the bank ’ s records though some customers showed proof of their investments with the bank. 10 | p a g e irregular board meeting also accounted for the weaknesses in the board oversight. in all of these cases, one thing was clear, and that is, the banks could not delineate themselves from their past practices as finance houses. they followed the same practice of borrowing from high net worth persons at a very high costs without any plans to bring themselves in line with the industry norm. 19. certainly, it is for these numerous reasons that the central bank is seeking, among others, to enhance corporate governance practices as well as risk assessment frameworks across all banking institutions. this will contribute significantly to improve overall performance as well as the reputation of banks and credibility of the entire financial sector. 20. some may ask, what were the banks supervisors doing during all this time with such gross violations going on in the banking sector. 21. upholding the highest ethical standards and professionalism in the performance of our supervision function cannot escape my watch going forward, and i 11 | p a g e demand same from you all. we shall employ an appropriate mix of both on - site supervision and off - site surveillance

of business of the new government sought to do. the macroeconomic framework of the budget was anchored on unwinding the large economic imbalances to restore stability. these included bold policy initiatives aimed at fiscal consolidation focusing on tightening expenditure controls and plugging revenue leakages as well as reprofiling short - term debt into long - term instruments to create some fiscal space. these were complemented by monetary policy management strategies to lower inflation and ensure exchange rate stability. 6. the results are clear for all to see : in the year to date, these policies have started gaining roots — inflation has fallen from 15. 4 percent at the end of 2016 to 11. 6 in october 2017. as a result, the policy rate has been lowered by about 550 basis points with commercial bank lending rates also coming down by some 150 basis, although banks are expected to do better. in addition, there has been relative stability on the foreign exchange market with the cedi depreciating against the us dollar by 4. 6 percent since the beginning of the year compared to the same period average of about 17 percent depreciation over the last three years. in addition, economic growth is gradually rebounding supported by significant 3 | page improvements in electricity supply, higher crude oil production and some government initiatives targeted at boosting agriculture and manufacturing activities. in the second quarter of 2017, real gdp growth was estimated 9. 0 percent as compared with 1. 1 percent same period of 2016 and projected to reach 7. 9 percent by end 2017. 7. there is no doubt that the current policy debate is about how to move from stability to accelerated growth and employment generation. this is the new paradigm shift we are targeting. however, madam president, there is no doubt about the fact that macroeconomic stability must remain the necessary condition to facilitate the growth and development objective. for instance, uncertainty, reduction in inflation and helps economic helps to reduce agents to extract information from relative prices. this leads to more investment and efficient resource allocation and higher growth. 8. ladies and gentlemen, strong financial institutions operating in a stable macroeconomic environment are the bedrock of financial stability. such financial institutions typically have a strong capital base well aligned to their risk profile ; with a high quality portfolios of assets, high accounting standards, and robust balance sheets ; and they have a culture of timely 4 | page disclosure of information and submit to the discipline of the market. such institutions are less vulnerable to external shocks and are therefore a source of resilience