paul a acquah : enhancing confidence in the ghanaian financial system in the midst of the financial crisis keynote address by dr paul a acquah, governor of the bank of ghana, at the ghana banking awards gala night, accra, 9 may 2009. * * * mr. chairman, honorable ministers of state, executives of corporate initiative ghana, directors and executive of banks and industry, distinguished guests, ladies and gentlemen, thank you for the opportunity to join you at this year ’ s ghana banking awards gala night, the eighth in the series held under the auspices of corporate initiative ghana. first of all, let me take this opportunity to commend corporate initiative ghana for their foresight in institutionalizing this programme to offer a platform where consumers of banking services give public recognition to banks that they have adjudged to have excelled in various areas of their businesses over the year. i believe the annual awards in the various categories help to promote a competitive spirit, financial innovation, diversity of products and services, and efficiency in providing services to customers, and fostering confidence in the banking sector. today ’ s event is organized around the theme “ enhancing confidence in the ghanaian financial system in the midst of global financial crisis ”. [ my reading is that the captains of industry do not seem to be having sleepless nights like their counterparts who have become the targets of some public outrage and visible scapegoats for the crisis in the industrialised countries ]. this topic is very appropriate for this occasion. it offers the opportunity to draw lessons from this extra - ordinary global financial crisis and globally synchronized drop in economic activity and employment, and how it has spread in its severity across countries. we can look at it critically from our domestic perspective as we seek to anchor the financial sector as a pillar of growth in ghana ’ s economic development. mr. chairman, the hallmark of the current crisis is its unprecedented complexity both in terms of its causes and effects. what ostensibly started as a sub - prime mortgage loan problem in the united states has transformed into a multi - faceted financial and economic turmoil. it has shaken the foundations of the financial architecture, the credit and equity markets, and the framework of financial regulations, asset valuations, and transfer of risks. and, the practical consequences have meant a loss of confidence and trust in the financial system on a scale that threatens financial stability. financial institutions have weakened under the weight of the write - offs of toxic assets and corporate and consumer credit losses. banking failures have been

bank of ghana is confident that the actions taken in terms of recapitalisation, closure of insolvent banks and widespread regulatory reforms will gradually bringing back trust and confidence in the ghanaian banking sector. restoring the health of the banking sector 8. ladies and gentlemen, i have every reason to feel confident about gains and achievements made so far in the financial sector. the financial sector is currently healthier and better able to withstand external shocks compared to the financial sector at the beginning of 2017. it is better capitalized, liquid, profitable, and more efficient and has adequate capital buffers to enable it manage any adverse external developments. such an optimistic outlook seemed nearly impossible in 2017 when we started these reforms. 9. mr. chairman, a dynamic growth - oriented financial system must be strong, well capitalised, and effectively supervised within a fair regulatory environment in accordance with international best practices and standards. there is therefore, a huge regulatory burden on us to remain vigilant towards all forms of risks in the banking sector and to tighten our regulatory and supervisory responsibilities to continue with efforts at strengthening and stabilizing the banking industry. these reforms will ensure the safety and soundness of banks, aligning macro and micro - prudential risks to bank capital and addressing crosssectoral and cross - border risks to the industry. in other to address potential risks and to properly risk profile individual banks, we are taking steps to revise the current risk - based supervision framework in line with current developments in the global banking environment. 10. to further boost depositors ’ confidence and lock - in the reform process, the deposit insurance protection corporation ( dipc ) would become fully operational effective october 1, 2019. the deposit insurance is one of the key pillars in securing financial sector stability. as amended, the ghana deposit protection act 2016 ( act 931 ) was enacted to protect small savings from losses incurred as a result of the occurrences of an insured event such as the revocation of a deposit taking institution ’ s license. among others, the act also supports the development of a safe, sound, stable and efficient market - based financial system. in the process of operationalising the dipc, the bank has already sent letters to banks to begin a process of onboarding after agreeing on an annual premium of 0. 3 to 1. 5 percent of insurable deposits with participating institutions. the bank of ghana, which is the project implementation authority, will support the dipc for 3 years to ensure sustainability. the agreed