remarks by the second deputy governor, mrs. elsie addo awadzi, at the joy fm financial sector forum on november 1, opening remarks the stability and integrity of our financial system should be of utmost important to everyone and the economy as a whole. banks and other institutions that take deposits are regulated to help ensure that they remain safe and sound to perform their critical role in the economy. as you know the bog has undertaken a number of reforms recently and continues to strengthen the system. i look forward to sharing some of these reforms with you, and to hearing your thoughts on the reform process so far and going forward. qs & as q. what is the current state of affairs in ghana ’ s banking sector? the banking sector is generally strong and continues to be profitable, judging from a number of key indicators. for example : total assets continue to increase ; profitability remains high ; industry car of 19 % compared to required minimum of 10 % ; and the quality of bank loans continues to improve, with a reduction in npls. q. bog has carried out a number of reforms recently. why is bog finally cracking the whip after doing nothing for a long time indeed, bog has initiated a number of reforms over the last year and half to make the banking sector stronger and more resilient. key among these reforms are : the revocation of licences of 7 failed banks, and the appointment of receivers for these banks ; strengthening the regulatory framework through a number of new directives on a number of key issues such as capital, corporate governance, provisioning for loans, and others ; a renewed focus on risk - based supervision of banks to help identify problems sooner than later ; stronger enforcement of our laws and directives ; increasing public awareness to help the banking public make prudent banking decisions. bog is committed to ensuring that banks and other financial institutions it regulates, remain safe and sound and engage in practices that protect the deposits of their clients as well as ensure that the financial system is safe and stable for all users. bog has demonstrated this commitment by the bold steps it has taken so far, as difficult and painful as some of them have been. q. were the actions taken against the 7 defunct banks necessary? why were they taken? the bog ’ s recent actions were necessary to ensure that banks that failed were made to exit the market in an orderly fashion and without disruptions to our financial system. failed banks become serious sources of risk for the entire financial system and the economy as a

conditionality because the omts are attached to a european financial stability facility / european stability mechanism ( efsf / esm ) programme, thereby ensuring that the member states concerned remain under considerable pressure to implement reforms and maintain fiscal discipline. the omt programme seeks only to reduce unwarranted interest rate spikes. i would like to make it very clear at this point that the omt programme was not aimed at harmonising the financing conditions of the member states. the market mechanism will continue to operate. another important point in this regard is that an efsf / esm programme is a necessary – but not a sufficient – condition for omts. there is no automatic follow - on. the governing council of the ecb will decide independently in each individual case, looking exclusively at the necessity of omts from a monetary policy perspective. second, our omt programme is limited to the short end of the yield curve – i. e. to maturities of between one and three years – as the eurosystem ’ s other monetary policy instruments have also traditionally been aimed at this period. the third distinction between the omts and the smp is the transparency of our actions, through the publication of relevant information on omt interventions. a fourth way in which the programmes differ from one another is that, under the omt programme, we are not only able to buy government bonds, but also to sell them again, and their valuation is based on market prices rather than on final maturity. fifth, we announced that our omt interventions would be ex ante “ unlimited ”. we have no doubt that this strong signal was required in order to convince market participants of our seriousness and decisiveness in pursuing the objective of price stability. at the same time, however, the design of omts makes it clear to everyone that the programme is effectively bis central bankers ’ speeches limited, for one by the restriction to the shorter part of the yield curve and the resulting limited pool of bonds which may actually be purchased. omts – in the event that they are conducted – will not give rise to any inflationary risks. for every euro that the eurosystem spends on government bonds, one euro will be withdrawn from the money supply in the euro area. we already did the same successfully under the smp, which has now come to an end. barely a year after the announcement of omts, the positive effects are obvious, and this development has certainly also been enabled by the reform efforts as a whole