achieve full compliance with the new minimum capital requirement. we have therefore intensified monitoring of the process as we bring closure to the recapitalisation process on december 31, 2018. 21. recent developments in the banking sector reflect gains from the on - going reforms in the sector, which are expected to further increase after the recapitalization process is completed in december 2018. in addition to making profits, banks now have more assets with capital adequacy ratios well above required regulatory levels. it is therefore not surprising that the improving banking sector stability partly accounted for standard and poor ’ s recent upgrade of ghana ’ s long - term rating to ‘ b ’ from ‘ b - ’ with stable outlook. 22. ladies and gentlemen, while acknowledging that some critical issues remain to be addressed ; our economy has witnessed a significant turnaround in the macro indicators. the restoration of macroeconomic stability should provide some basis for improved financial intermediation to boost economic activities in the nearterm. page | 12 23. the stable macroeconomic environments occurred on the back of strong fiscal consolidation and prudent monetary policy providing an anchor to the disinflation process. in particular, improvements in interest rates are beginning to impact positively on availability of credit to households and the private sector to support growth. 24. in the course of the year, we experienced some headwinds from external sources on the domestic foreign exchange market, similar to many emerging markets. in particular, the shift to monetary policy normalisation in the u. s. led to rising yields and portfolio reversals especially in emerging markets, which triggered volatility in most currency markets. to a large extent, these pressures have moderated and the local currency has been relatively stable. the bog will continue to carefully monitor the external environment and other related factors with the goal of ensuring stability in the currency. 25. the gains achieved in macroeconomic stability, together with implementation of other policy initiatives, will provide some impetus to economic growth. banks, therefore, must position themselves to scale up their support for private sector - led growth. page | 13 what next for the banking industry after recapitalisation? 26. madam president, as we take stock of what has become a very engaging past 18 months, allow me to share some perspectives on how we see developments in the banking sector in the coming year : 27. even though we have made significant strides and seen improvements in the soundness and stability of the banking sector, there is still scope for improvement,

. the transition plans of financial intermediaries ( banks and institutional investors ) can represent a powerful tool both for managing climate risks and for steering the economy on a sustainable path. however, we are moving our first steps in this area. in what follows i will discuss two issues and draw some conclusions. 2. current vs expected emissions an intermediary can implement a net zero transition plan in many ways. to simplify, consider two opposite alternatives. the first would entail changing the composition of its portfolio by moving from high to low carbon intensity sectors / firms, identified based on their current emissions. this is the so - called “ exclusion ” strategy, according to the usual taxonomy of sustainable investment. 4 the second ( the so - called “ best - inclass ” strategy ) would entail overweighting firms that, despite being carbon intensive, have committed to an ambitious and credible decarbonization plan over the coming decades. the first approach, if applied on a vast scale, would suffer from a fallacy of composition : it would be feasible for the individual intermediary, but not at the aggregate level, short of a “ miracle ” in the form of a technological breakthrough allowing carbon intensive firms to transition without financial support, or a quick and radical change in households consumption patterns that causes a fall in demand for high carbon products and services. the second approach avoids this problem and appears capable of providing carbon intensive firms the finance they need to implement their transition plans. figure 1 reports data for eu listed non - financial companies, aggregated by sector. for each sector, the horizontal axis measures the current carbon intensity ; the vertical axis reports the expected decline in carbon intensity over the next decade, as envisioned in each firms ’ published commitments. the figure shows that firms in the more carbon intensive sectors plan to reduce their emissions relatively more aggressively. this suggests that these firms, arguably the most exposed to transition risk, will need substantial flows of finance in the coming years for their transition plans to succeed. the figure also highlights that financial firms could face a difficult choice : in the short - to - medium term financing the transition might even entail an increase in the carbon footprint of their portfolios. while this might seem at odds with a net zero pledge, it could be worth doing. consider e. g. firms operating in the business of power generation, often characterized by very high emissions. their investment choices will global sustainable investment alliance ( 2021 ), “ global sustainable investment review ”. be key to