Beyond regulatory measures, a resilient financial system is built on a foundation of ethical conduct, Governor of the Bank of Ghana (BoG), Dr Ernest Addison, has said.
Integrity and professionalism, he noted, are indispensable pillars of trust, and they underpin the confidence that the public places in our banking sector.
In this regard, he said, “it is gratifying to highlight the Chartered Institute of Bankers’ Ethics Certification Programme which was developed in collaboration with Bank of Ghana and launched last year,” Dr Addison said at the 28th annual banking and ethics conference in Accra recently.
“As I stated last year in my speech, all staff working in the banking industry must complete this Ethics Certification Programme and must be recertified annually.
“This is now an essential part of the fit and proper assessment of the Bank of Ghana. I want to take this opportunity to encourage all banks to actively enrol their staff in this programme. Equipping our practitioners with ethical training will empower them to make the right ethical decisions, even in complex situations, and to serve as trustworthy custodians of public funds. At the Bank of Ghana, we believe that ethical certification should not be optional but a standard across the industry. I envision a future where every banking professional, from senior management to entry-level staff, carries the certification as a badge of honour—a reflection of commitment to uphold the values that protect and enhance our financial system.,” he added.
Dr Addison further indicated that weaknesses leading to the collapse of banks are not overnight.
He cited unviable and unsustainable business models and strategies as the root causes of banks’ vulnerabilities and failures.
While sudden external shocks such as Covid-19 or the global financial crisis could be greatly impactful and cause the immediate demise of some banks, he said, the root causes are generally more structural.
If not identified in time and allowed to fester, these vulnerabilities will make a bank’s activities increasingly unsustainable, to the point where it becomes non-viable, Dr Addison said.
Going forward, he stated, the Bank of Ghana is incorporating Business Model Analysis (BMA) as a key component of its supervisory frameworks to enable supervisors identify banks’ vulnerabilities at an early stage and helps to ensure their safety and soundness.
“We have recently issued an exposure draft of our methodology for assessing the viability of banks business model to the industry, which we will soon finalise for adoption. Business model analysis has the potential to enhance bank supervision and make it more effective, proactive and forward-looking, and would be our next examination thematic review next year.
Nine local banks collapsed during the financial clean-up exercise. Through the exercise, the number of banks in Ghana was cut down from 34 to 23. Also, some 347 microfinance institutions, 15 savings and loans and eight finance houses had their licences revoked.
The failed banks were UT, Capital, The Beige Bank, The Construction Bank, Sovereign Bank, Unibank; The Royal Bank; Heritage Bank and Premium Bank.
