function as a credible benchmark, a nominal anchor, for price and wage formation. that wage formation does not yet seem to have been fully adjusted unemployment in sweden remains high - is another matter. it probably has more to do with structural factors. for asset markets, however, there is no such clear benchmark. so neither is there anything to prevent psychological factors - irrational exuberance, if you like - from continuing to inflate various asset prices beyond what is reasonable in relation to underlying economic conditions. the path of the american stock exchange in recent years demonstrates that low inflation is often not sufficient to ensure a restrained development of asset prices. that this can be seen as something of a dilemma is understandable. does this imply that monetary policy should in fact be used more than hitherto for actively and directly countering sizeable price increases in asset markets? there is no obvious answer to that question but the dominant opinion at present is that the answer should be no. this is because central banks would find it difficult to identify true bubbles in the development of asset prices and judge the appropriate measures correctly. still, i would like to leave the door ajar. situations may arise that are hard to foresee today and where monetary policy may need to play a part. if risks of a new financial crisis were to mount up in some distant future, a central bank could not stand idly by. the type of monetary policy regime with an explicit inflation target that applies in sweden and other countries does, however, provide ways of coming to terms with problems from fluctuating asset prices. for one thing, the regime means that in the event of asset market instability, the monetary stance is adjusted automatically in a stabilising direction. as asset prices affect aggregate demand and this is an important mechanism for inflation, interest rates will be raised when asset prices move up and vice versa. this can be expected to exert some stabilising effect on asset markets. for another thing, macroeconomic stability as such should have a stabilising influence on financial markets. focus on the provision of credit while a credible macroeconomic policy is needed to prevent financial crises, it is probably not sufficient by itself. it is also necessary to oversee and supervise the financial system, which includes having appropriate rules for the operations of banks and other credit institutions. in the final analysis, it was the provision of credit that lay at the heart of the events in the 1990s to which i have referred. extensive credit risks constituted the problem and

johnson p asiama : fifteen years of ghana banking awards – enriching a healthy competitive landscape in the drive for consumer relevance in banking speech by dr johnson p asiama, second deputy governor of the bank of ghana, at the annual banking awards 2016, on the theme “ fifteen years of ghana banking awards – enriching a healthy competitive landscape in the drive for consumer relevance in banking ”, accra, 26 august 2016. * * * mr chairman, captains of industry, executives of the banking industry, distinguished guests, ladies and gentlemen. it is a pleasure for me to join you today for the 15th edition of the ghana banking awards. this event usually serves as a platform where the contributions of the banking sector to the economy could be recognized. it should therefore serve the purpose of stimulating healthy competition among banks which could in turn lead to improvement in the delivery of financial products and services across the industry. this year ’ s theme, “ fifteen years of ghana banking awards : enriching a healthy competitive landscape in the drive for customer relevance in banking ” could not have been better chosen. the theme resonates well with a quote by felix george rohatyn ( an accomplished investment banker ) who said “ … at its core, banking is not simply about profit, but about personal relationships ”. i will come back to say more about these shortly, but permit me, mr. chairman, to thank corporate initiative ghana ( cig ), the organizers of this event for this opportunity. for my address this evening, i will begin with some general conceptual issues relating to the banking scene and then follow - up with some specific matters that touch on the bank of ghana ’ s regulatory and supervisory role. a vibrant and growing banking industry mr. chairman, you will agree with me that the banking industry in ghana has experienced tremendous growth and unprecedented competition over the past 10 years, especially after the adoption of the universal banking concept in 2004. today, banks do not only compete among themselves, but also with non - banking entities such as savings and loans companies, finance houses, rural and community banks and lately microfinance companies. the objective for introducing the universal banking concept was to allow all banks in the country that comply with the prescribed capital requirements the freedom to engage in some or all permissible banking business activities without restrictions. this has resulted in banks penetrating into new and active markets with the view to increasing market share and profitability. it is important to note that banking is a customer - oriented service industry ;