kwesi bekoe amissah - arthur : new primary dealer system for ghana opening address by mr kwesi bekoe amissah - arthur, governor of the bank of ghana, at the stakeholders workshop for new primary dealer system, organised by the bank of ghana and the ministry of finance and economic planning ( mofep ), accra, 9 december 2010. * * * i am very happy to join you at this workshop which is the result of the collaborative effort of bog and mofep to enhance further the financial market in ghana. efficient and effective financial intermediation is crucial in any country ’ s development and it is imperative that the necessary infrastructure is put in place. beginning with this workshop, therefore, work on reforming the primary dealer system has started and you will be introduced to new guidelines that will control the system. primary dealers are financial intermediaries who promote investment in issued securities. in the developed securities market a primary dealer is licensed only after a long period as a demonstrated participant. however, the ghanaian wholesale market was started on a different note. in addition to a few licensed brokerage firms, all the banks and discount houses existing at the time were made automatic primary distributors. it was envisaged that with their wide coverage, the banks could promote the retail distribution of government securities. in march 1996, in consultation with dealers in the market, the bank of ghana stopped the retail market of treasury bills. it was envisaged at the inception of the wholesale auction that the primary market would be stimulated and broadened through increased competition for the evolution of a more efficient and dynamic secondary market. despite the interventions, the market is yet to exhibit the dynamism that characterizes financial markets in the advanced economies. a number of weaknesses account for the inability of our primary dealer system to produce the desired objectives. the proper functioning of a deregulated financial system and the implementation of indirect monetary controls require a substantially liquid inter - bank market for government securities. the reasons this has not happened include : – lack of commitment of the primary dealers to undertake government securities transactions as a line of business – the weak financial strength of licensed brokerage firms that do not have the required wide net work to reach the non - bank public – over 80 % of government securities are taken up and held by banks. these are seen more as investments rather than as trading stock, and have therefore tended to hold stocks of securities to maturity – government securities are seen by some banks and other

institutions and their human resources into models of excellence! let us also give a round of applause to our other hardworking partners from the department of education! bigyan din po natin ng masayang palakpakan si former socioeconomic planning secretary dr. ciel habito who continues to be deeply involved in making our country a better place! palakpakan din po natin ang ibang epra representatives who are here. we are also pleased that we have with us today representatives from the chamber of thrift banks headed by executive director suzanne felix ; and the bankers association of the philippines represented by its executive director topper coronel. let us also give our banker guests a big hand for they continue to work with us closely on our economic and financial literacy programs, including our successful and award - winning “ tulong barya para sa eskwela ” project. ladies and gentlemen. “ tulong barya para sa eskwela ” generated more than p6. 5 million in cash donations for public elementary schools and savings of more than p8 million for the bangko sentral. this national lesson in saving proved beyond any doubt to our school children, that every little amount we can save will eventually add up and even be the start of wealth creation! as our slogan says : “ ang barya mahalaga, lalo na kapag pinagsama - sama. ” with the incorporation of money management into the elementary curriculum, we move to the next step and formalize the education of our children on this vital subject. indeed, today marks a high point in our continuing program to educate and inform our people on basic economic and financial concepts. again, thank you to all our partners and to all others with us today who share our commitment to economic and financial literacy programs. together, let us help filipinos manage their personal finances well, transform them into net savers and help them identify options that can ultimately lead to wealth creation. maraming salamat po sa inyong lahat! mabuhay ang mga pilipino!