The Pension Industry’s exposure to banks is approximately GH¢863.63 million, this was contained in Finance Minister’s Memorandum to Parliament.

Ken Ofori-Atta is seeking the approval of Parliament to expend up to GH¢15.6 billion for the financial sector.

Mr Ofori-Atta stated that total exposures of banks to the securities industry was approximately GH¢839.42 million. Banks’ total exposure to the insurance industry was approximately GH¢33.44 million.

A mapping exercise conducted by BOG on exposures between and across financial institutions in the Ghanaian economy shows that as of September 2019 total exposures of banks to other financial institutions were approximately GH¢1.54 billion.

Total exposures of Banks to SDIs was approximately GH¢669.51 million.

Total exposures of SDIs to the universal banks was approximately GH¢933.64 million. Total exposure of Savings and Loans institutions to other financial institutions were approximately GH¢637.61 million and the Savings and Loans industry held approximately GH¢467.73 million of other financial institutions funds.

Interconnectedness

In view of the interconnectedness of the sector and the need to prevent the financial system from running into crisis, government took an emergency step to protect depositors and investors whose funds were locked up in the failed financial institutions.

The measures included the issuance of non-marketable securities in 2020 to cover the toxic assets and make whole depositors in the nine universal banks that failed, the paying of a capped amount of GH¢20,000 to validated clients as well as providing liquidity to validated, solvent financial institutions whose funds were locked up with the failed financial institutions to avert a systemic crisis.

The Memo concluded, “In view of the foregoing, and the need to protect the financial sector, Parliament is respectfully requested to consider and approve an expenditure of up to GH¢15.6 billion for the bailouts of depositors and investors. And for ensuring that liquidity in the financial system is improved thereby safeguarding the financial sector and the economy. This amount covers all the fiscal interventions in the financial sector starting 2017.”