Banking Sector cleanup: The blame begins and ends with BoG - Kofi Abotsi

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Former Dean of GIMPA Law School, Ernest K. Abotsi has said that the Bank of Ghana (BoG) is to blame for the banking sector crisis and their own frustration in pursuing heads of the various defuct financial institutions. His remarks, follows a recent plea by Bank of Ghana to law enforcers to expedite investigations of individuals who held high positions in the collapsed banks. He explained that the role of BoG in presiding over the now collapsed financial institutions was to be the regulator and the gatekeeper. Therefore they cannot escape liability for having slept on the job and “implicitly leading third parties into a place that was ostensibly safe when in fact it wasn’t.” “If I’m a depositor, I do not have to ask for a [bank] stress test before I put my money in there. I should assume that as long as that entity continues to hold a licence, that entity is good enough and safe enough for me to continue business with them,” Mr Abotsi said. He further alleged that, many of the collapsed banks had bad auditors who were reporting healthy balance sheets yet this went unnoticed by the regulator. “The truth still remains that these [auditing] firms may still be around,” he lamented. He stressed that even though some people have left and others filled their positions at BoG, the institution still remains and it was therefore necessary for certain reforms to be made to avoid a similar incident. He said the review of the banking system should start from within the Bank of Ghana because “by statute and by the constitution they have a mandate to ensure that what happened did not happen.”

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Bank of Ghana

Banking Sector Crisis

Ernest K Abotsi