keynote address on the futuristic economy : technology - driven future of business & governance for economic transformation by dr. ernest addison governor, bank of ghana may 20 - 21, 2019 kempinski gold coast hotel accra, ghana mr. chairman, his excellency the vice president, chiefs, invited guests, distinguished ladies and gentlemen. let me thank organisers of this ghana ceo summit for creating such a unique platform where over 400 ceos gather at one place to discuss issues of relevance to the businesses and the economy in general. mr. chairman, we at the bog start a 3 - day mpc meeting this week which we will review developments on the economy and take a decision on where to place the policy rate. i will therefore not discuss monetary policy today. however, as you all know, in the last two years, we addressed serious lapses in governance and weaknesses in the operational efficiency of some banks. the systemic nature of the infractions put several depositors ’ funds at risk and weakened public trust in the industry. we therefore took the challenge, daunting as it was, to clean the financial sector and safeguard the solvency and stability of the banking system in particular, and the financial system as whole, given the interconnectedness of the banks and other specialized deposit institutions. page | 2 the comprehensive set of reforms we undertook were tough but necessary. over the period, we have recapitalised the banks and implemented several regulatory reforms to underpin the stability and soundness of the banking sector. we now have a well - capitalized, liquid, solvent and resilient banking sector to effectively execute its core mandate of financial intermediation within a stable economic environment. given this platform, permit me to enumerate some of the reforms that have been implemented to safeguard the stability of the financial sector. these reforms are aimed at ensuring the safety and soundness of individual banks, aligning macro - and micro - prudential risks to bank capital and addressing cross - sectoral and cross - border risks to the industry. in order to address the overall risks of the industry, and to properly risk - profile individual banks, we revised the current risk based supervision framework to take account of the current developments in the global banking environment. as part of efforts to reduce the level of impaired assets, we have required that banks help to clean up their books and remove the structural challenges that undermine the effective credit delivery process. we have enforced our directive on loan write - off and require appropriate disclosure

adequacy of corporate governance have greatly increased. these concerns likely contributed to the pullback in the stock market this summer. moreover, lenders have responded to the sequence of accounting irregularities, and even sound businesses have been affected by the additional caution and suspicions arising in the wake of the disclosures by enron, worldcom, and the like. in particular, these announcements probably heightened investors ’ perceptions of risk and thus likely contributed to the widening in risk spreads in recent months. more recently, geopolitical risks also seem to be weighing on businesses and households. the possibility of additional terrorist attacks has been present for some time. but added to this concern are now the prospects for armed conflict. predicting the consequences of such an event with any precision is, of course, impossible, and this additional uncertainty has undoubtedly increased caution among businesses and perhaps even households. indeed, as i noted at the outset, indicators of production and spending have recently become more downbeat. industrial production fell in both august and september, in part - - but not solely - - because of a dropback in motor vehicle production from the high rates earlier in the summer. payroll employment has turned down again after rising this summer. and layoffs and initial claims for unemployment insurance continue to run at elevated levels. on the household spending side, motor vehicle sales dropped off sharply in september and october after a phenomenal pace this summer ; personal consumption expenditures excluding motor vehicles were little changed in both august and september ; and consumer confidence has deteriorated of late. similarly, business spending has shown little vigor in recent months, at least judging by the latest data on new orders and shipments of nondefense capital goods. taking account of these latest signals, the climate of heightened uncertainty, and the very favorable prospects for inflation, the fomc last week cut the target for the funds rate by 50 basis points. this additional easing of policy is aimed at helping the economy work through the current soft spot, and the fomc indicated that it better balances the risks to the outlook. not everyone will agree with this view. in particular, the fact that the economy has grown at only a moderate pace this year despite sizable reductions in interest rates over the past year and a half has led some observers to argue that monetary policy has lost its punch. in my opinion, that argument is wrong. academics and policymakers always thought that monetary policy operates with long and variable lags and that both the level of rates and the time required for policy to