The Financial Stability Council has pledged to continue to closely monitor the impacts of the Debt Exchange Programme on financial institutions and on the financial system as a whole, as well as the effectiveness of the measures outlined.

According to the Council, the measures will be reviewed continuously and recalibrated as needed to ensure maximum effectiveness to safeguard the stability of our financial system and the protection of deposits, pensions, policy holders’ funds, and investor funds/assets.

So far, stress tests have been conducted by the relevant financial sector regulators to estimate the potential impact of the Debt Exchange for banks, specialised deposit-taking institutions (SDIs), insurance firms, asset managers, collective investment schemes, pension fund trustees, and regulated pension schemes, which could result from their participation in the debt exchange.

To help manage the potential impacts of the Debt Exchange Programme on the financial sector, the Council said financial sector regulators will deploy all regulatory and supervisory tools to mitigate risks to financial stability.

Again, the regulators will assess impacts on a regular basis, and quickly address evolving risks in order to safeguard financial stability.

GFSF to set up ¢15bn fund

Meanwhile, the Ghana Financial Stability Fund is being established with a target size of ¢15 billion to be provided by the Government of Ghana and its development partners.

The Fund will provide liquidity to financial institutions that participate fully in the Debt Exchange.

“All financial institutions (banks, SDIs, pension schemes, collective investment schemes, fund managers, broker/dealers, insurance firms) that fully participate in the Debt Exchange can access the GFSF for augmented liquidity support, with effect from the date of completion of the Debt Exchange”, the statement disclosed.

The Fund will be managed by the Bank of Ghana under unique operational guidelines being developed by the Financial Stability Council.

The statement added that the Financial Stability Council will provide ongoing advice and oversight for the use of the GFSF.