BoG To Finalise Implementation of Basel-2 Accord

The Governor of the Bank of Ghana (BoG), Ernest Addison has announced that the Central Bank will ensure that the implementation of Pillar II of the Basel-2 accord is finalized.

This according to him is part of some developments the Central bank would undertake next year, after the recapitalization.

Speaking at the Annual Dinner of the Chartered Institute of Bankers on Saturday he said “our collective responsibility is to ensure efficient financial intermediation in the economy as we continue to provide assurances to the general public to address some of the confidence issues that arose during the clean-up.”

Basel II is an international standard that banking regulators can adopt to ensure that banks hold capital reserves appropriate to the risks the banks expose themselves to through their lending and investment practices.

This involves the establishment of rigorous risk and capital management requirements which has become even more crucial following the recapitalization of banks which exposes them to more risks.

Though not mandatory, it has long-term benefits of safeguarding the banking sector’s solvency and the overall economic stability.

According to the governor, when finalized banks would regain confidence of the general public.

He also mentioned that BoG “will fully implement consolidated supervision alongside revisions to the Bank’s risk-based supervision framework”

Capital Requirement

Touching on the GH400 million Capital Requirement which ends in December 31, he said the Central Bank has intensified monitoring of the process.

However, twenty-two banks according to him, have met the minimum capital requirement.

“I am happy to inform you that significant progress has been made in this area and as at November 2018, we can confidently say that about twenty-two banks have either met or are in good standing,” he said.

He expects that 2019 would bring good tidings to the banking industry with fewer challenges.

By: Emmanuel Yeboah Britwum