Banks back to full capital adequacy - IMF declares progress in Ghana sector clean-up
The International Monetary Fund (IMF) declared progress in Ghana's banking sector clean-up, stating that Ghana's banking sector is close to full recovery. IMF Mission Chief Dr. Ruben Atoyan said that most banks have now been recapitalised and restored to regulatory compliance. He stated that "What the authorities have done has been quite successful during the program, bringing banks back to the full capital adequacy in line with prudential requirements, which has been achieved for almost all the banks."
Dr. Atoyan explained that the domestic debt restructuring exercise had significantly weakened bank capital positions, leaving many institutions undercapitalised. He noted that "The impact of domestic debt restructuring resulted in significant destruction of capital for the domestic banking system." He also disclosed that authorities had made substantial progress in restoring capital adequacy across the banking industry under the IMF-supported program.
Dr. Atoyan indicated that only a small number of institutions remain to be fully addressed. He said, "For a couple of banks remaining," indicating that the process is not yet entirely complete. Dr. Atoyan expressed confidence that the sector is on track to full recovery and added, "We do expect that by the end of the program the banking sector will be robust."
Quick Summary
The IMF is observing Ghana's banking sector, which has been under stress for years due to domestic debt restructuring. According to the IMF, authorities have been working to bring banks back to full capital adequacy- but what challenges remain?
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