The Governor of the Bank of Ghana, Dr Ernest Addison this week joined The Financial Stability Board (FSB) Regional Consultative Group (RCG) for Sub-Saharan Africa in Cape Town to discuss several issues concerning the global financial sector.
The two-day meeting also looked at financial vulnerabilities, FSB’s work programme, cyber risk and financial conglomerate supervision.
The meeting started with a discussion on recent global and regional macroeconomic and financial market developments and their implications for financial stability.
They also emphasized the importance of adequate capital buffers for banks in response to these developments on the global financial markets and help address all the vulnerabilities.
The group discussed vulnerabilities created by low bond yields and increased holdings of lower-quality debt and illiquid assets by investment funds. It noted that there is increasing vulnerabilities from rising debt levels and non-performing loans in the region.
Members emphasised the importance of adequate capital buffers for banks in response to these developments. The group also discussed the FSB’s recent publication on BigTech and reviewed FinTech developments in the region.
The group considered the economic and financial stability vulnerabilities created in the region by climate-related risks.
In addition, members discussed the FSB’s ongoing work to develop a toolkit of effective practices to assist financial institutions, supervisors and other relevant authorities, in supporting financial institutions before, during and after a cyber-incident.
There was also an exchange of views on the preliminary set of effective practices, including a summary of the survey responses by RCG members. The FSB will issue a consultative document on the toolkit in April 2020.
The meeting concluded with a discussion on the supervision of financial conglomerates. Members discussed trends towards increased consolidation of financial firms in the region and the approaches needed for effective supervision of these firms. In particular, group members noted the importance of continued dialogue amongst supervisory authorities.
What is the Financial Stability Board (FSB) Regional Consultative Group (RCG) for Sub-Saharan
The FSB RCG for Sub-Saharan Africa is co-chaired by Lesetja Kganyago, Governor, South African Reserve Bank and Ernest Addison, Governor, Bank of Ghana.
Membership includes financial authorities from Angola, Botswana, Ghana, Kenya, Mauritius, Namibia, Nigeria, South Africa, Tanzania, Uganda and Zambia as well as the Central Bank of West African States (BCEAO) and the Bank of Central African States (BEAC).
Permanent observers include the Committee of Central Bank Governors of the Southern African Development Community and the East African Community.
The FSB has six Regional Consultative Groups, established under the FSB Charter, to bring together financial authorities from FSB member and non-member countries to exchange views on vulnerabilities affecting financial systems and on initiatives to promote financial stability. Typically, each Regional Consultative Group meets twice each year.
BoG Governor and Financial Stability Board
Governor of the Bank of Ghana, Dr Ernest Addison, was in July this year appointed as one of the Co-Chairs of the Regional Consultative Group for Swiss Based, Financial Stability Board.
The Governor is expected to work with the Governor of the Reserve Bank of South Africa, Lesetja Kganyaga to jointly Chair the Regional Consultative Group of the Financial Stability Board Standing Committee on Supervisory and Regulatory Cooperation.
What is the Financial Stability Board?
The board made up Central Bank Governors drawn from the G20 country as well as some countries that have been invited to join the grouping. The Swiss-based Financial Stability Board FSB is aimed at promoting the reform of international financial regulations and improving supervision of banking operations around the world.
The FSB is established as a not-for-profit association under Swiss law and is hosted by the BIS under a five-year renewable service agreement.
The organization structure of the FSB consists of the Plenary, Steering Committee, Standing Committees, Working Groups, Regional Consultative Groups, Chair and the Secretariat.