A Banking Consultant has lauded the Bank of Ghana’s action against Barclays Bank Ghana, saying it is a step in the right direction.
Dr Richmond Atuahene says “…So for me, it is part of the conduct regulations which I believe, it is okay with the Bank of Ghana which is very good because the pricing of the currency is very critical.”
Speaking with JoyBusiness on Tuesday, he stated: “We all have heard the cedi not doing very well of late, so somebody chose to take another advantage of it then it means you want to put further pressure on Bank of Ghana. So I think it’s a step in the right direction.”
Dr Atuahene added, “And more importantly, you know Barclays is fond of doing that, international plc, in August 2016, they did a similar thing with the London Interbank Offered (LIBO) Rate. In 2012, they did a similar thing with the LIBO rate, so I don’t know whether it is a practice or something so I think BoG did very well by observing this and taking statistics of this and sanctioning them very well, that will bring sanity in the FX market.”
Cracking the whip
Dr Atuahene also called for strict application of the various regulations to ensure fair play in the sector. “For regulation, you don’t pick and choose; what is good for the goose is good for the gander. You don’t select because you have a relationship, because the rules are there.”
He added, “You need to apply it strictly and religiously so that everybody will know you’re doing your job. At least it is a good beginning. For me, the enforcement and sanctions have been very weak in this country stemming from the banking crisis the foreign exchange issues; people were not playing the game according to the rules.”
“So I think we should commend them [BoG] for fining them heftily because in 2016 they were fined $160 million by federal reserves for manipulating the LIBO rate so I don’t know why they keep using manipulative rates.”
“It sends a good signal to the market that BoG is now cracking the whip which to me is the best for us.”
Last Monday, the Bank of Ghana (BoG) fined the Barclays Bank Ghana an amount of ¢4,579,256.36 for making frivolous quotes on Ghana’s Interbank Foreign Exchange Market.
“This action is in breach of the Ghana Interbank Forex Market Conduct Rules. The Bank of Ghana is committed to ensuring sanity, transparency and promoting best practices that serve to develop and deepen the FX market in Ghana,” BoG said in a statement.
“In pursuit of the above goals, the Bank of Ghana will not hesitate to sanction any market participant whose actions contravene Ghana’s Interbank FX Market Conduct Rules,” the statement added.
In a statement, Barclays Ghana said, “We are engaging with the regulator on this matter and will update you of developments.”