Chief Executive Officer of the Ghana Association of Banks, John Awuah, says the government’s Financial Stability Fund is yet to be put in place.

Government had announced the establishment of a Ghana Financial Stability Fund with a target size of GH₵ 15 billion to be provided by the government and its development partners.

The fund will provide liquidity to financial institutions that participate fully in the domestic debt exchange programme.

Speaking on JoyNews’ PM Express Business Edition, John Awuah noted that so far, just the framework of the fund has been finalised, however, the fund is yet to be operationlised.

“On the financial stability fund I’m afraid it’s not in place yet, the framework I’m told has been finalised.  As far as we know, it is the World Bank that has made some commitment and that commitment is going to be for solvency support. It’s a 1billion fund and we don’t have it on the table as we speak,” he said.

He added he is not certain what form the fund will take when finally operationalized, however, he is certain it will be a fund for liquidity purposes.

“The financial stability fund is not even in place for you to be talking about whether it’s going to be an equity fund or a debt fund. It’s not available at the moment.

“But the financial stability fund which is being put in place where I’m sure there is going to be a fund for liquidity assistance and a fund for solvency in the unlikely event that there will be need for that.”

Meanwhile, he stated that what is currently available to banks is the central bank’s window for liquidity.

He explained how this facility operates;

“The central bank window for liquidity is an existing window. We have the ripple window and we have the emergency assistance window. And what they have said is those windows are still open to banks in the event any bank has need for liquidity.

“The central bank is for liquidity and the ripple is for a very short term and then the emergency liquidity assistance is for medium term liquidity assistance. The central bank window doesn’t come with any discussions on equity, it is basically a ripple and you may have to post some securities and then they give you the liquidity. And now we have the securities and those under the programme.”