Audio By Carbonatix
Head of the Economics Division at the Institute of Statistical, Social and Economic Research (ISSER), University of Ghana, Professor Peter Quartey says defunct banks that collapsed as a result of the banking sector clean up had ample time to make things right.
He made the comments on the Super Morning Show during a discussion on the country's increased debt stock.
In Professor Peter Quartey's opinion, the structure of the now-defunct banks showed they had no future as they relied on weekly bailout packages from the Central Bank.
"Bank of Ghana statistics indicate that the banks were virtually leaning on bailouts from the Central Bank. How do you run a bank that draws from the Central Bank on a weekly basis? That's not feasible," he said.
As part of the discussion, the Professor raised concerns over an amount of Gh¢ 21 billion recorded in the debt stock as a result of the banking sector clean up.
Prof. Quartey admitted that the loss could have been avoided if proper corporate management systems were put in place.
He also disagreed with assertions that throwing more monies to support the banks was the best option to save them from collapsing, adding that, the collapse of the banks came about as a result of poor corporate management systems at the various banks.
"Why throw good monies to the bad ones? Institutions were given ample time to recapitalise. Some were encouraged to even merge. So I don't think that option of throwing more monies when there is bad governance is an option," he said.
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