Financial sector clean up not Ofori-Atta’s idea, it was an IMF conditionality – Analyst

Financial Analyst Dr. Michael Dawson has responded to claims that the financial sector clean –up which has ensured that the financial sector is solid, robust, and resilient was Ken Ofori-Atta ‘s idea.

“Let me state that the decision to undertake the reforms in the financial sector was mooted by the IMF. Thus, the clean-up was part of the  IMF Conditions for the country.

“You remember the asset quality review which was executed during the NDC era. The asset quality review gave a sense of the state of the banks. Former Finance Minister Seth Tekper and Governors appointed by President Mahama are aware of the malfeasance which was discovered after the asset quality review of the Banks.

“During the NDC era, the IMF  published several reports warning the Bank of Ghana to take some corrective measures within the banking sector, but the NDC government failed to clean up the sector. I think we should stop politicizing the benefits of the banking sector reforms. The reforms have led to stability and confidence in the financial sector.

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“I can tell you that, some depositors were not getting back their funds from some of the financial institutions. Some of the banks had also breached several banking regulations. Indeed, the financial system at the time was on the brink of total collapse. The central bank had clearly explained that the clean-up was based on poor business practices and weak capital positions of the banks and financial institutions. I am aware that the liabilities of some of the banks were more than their assets”.

Dr. Dawson made these comments in a write-up following a statement by President Mahama that the  Honourable Ken Ofori-Atta proposed and introduced the idea of reforms in the banking sector.

“I will say that the resilience shown by the banking sector is due to the comprehensive financial sector reforms that took place before the Coronavirus pandemic. You can imagine what would have happened if the banking sector reforms weren’t done. We would have woken up one day to see a collapse of the Ghanaian economy. The measures taken safeguarded the investments of 4.6 million depositors. There is confidence now in the sector. The exercise was crucial for stability and confidence in the financial sector”.Dr. Dawson said.

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Source:3news.com