Banks vulnerable to severe credit impairments, but risks from liquidity, others well contained - BoG

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A stress test carried out by the Bank of Ghana on banks operating in Ghana indicated that some banks were vulnerable to severe impairments in credit.

However, credit risks were well-contained.

According to the Central Bank, risks emanating from adverse exchange and interest rates movements, as well as liquidity pressures, were also well-contained due to a tight limit on net open position, sound management of maturity mismatches, and sufficient liquidity.

The Bank of Ghana conducted stress tests to evaluate the resilience of the banking sector to risks, including sovereign, credit, market, and liquidity.

According to the regulator of the banking industry, findings from the stress tests pointed to a resilient banking sector.

On sovereign risks, the Bank evaluated the expected impact from the Eurobond restructuring on the solvency of banks.

The assessment showed that the impact was minimal on solvency since banks had made provisions against the potential losses from the Eurobond restructuring.

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credit impairments

exchange rate risks

liquidity