Strengthen banking regulations

Dr Arthur Amissah, Governor of the Bank of Ghana

A banking regulator with the United States Treasury Department Office of Thrift and Supervision has tasked banking regulators in the country to tighten and strictly enforce the rules and regulations governing the country's banking sector.
Mr Francis Baffour, who has over 20 years experience in banking relations and the financial industry, said the rapid development in the banking sector has the tendency of making regulators relax in enforcing the rules.
That, he observed made most financial institutions to go off-track, thereby plunging the entire economy into serious challenges as witnessed in the United States of America.
Mr Baffour made the observation when he delivered a public lecture on the theme "The causes of the financial crisis in the US, the activities that led to the near collapse of the entire financial system in the world and lessons learnt".
The lecture was by the Institute of Chartered Bankers and sponsored by First National Savings and Loans Company Limited, a non-banking financial institution and the Coconut Grove Regency hotel.
Mr Baffour further observed that financial institutions in the country had concentrated so much in credits, a situation that he said led to the 2008 financial crisis in the US.
"There is a lot of concentration on credit so if anything goes wrong, where do we go?" Mr Baffour asked.
According him, banking regulators in the country ought to know the actual assets of the financial institutions and further evaluate them against their capabilities to recapitalise after any internal disaster to the said institution.
He added that financial institutions as well as the regulators must take serious note of consumer complaints about the actions and inaction of their bankers, adding that “when numbers don’t make sense, then there is something wrong somewhere”.
Touching on the US financial crisis which subsequently plunged the entire world into a depression in 2008, Mr Baffour said lots of cash flow came into the US economy from outside sources which caused a boom in the housing sector and resulted in financial institutions engaging in crediting without due course to regulations.