Conduct regular assessments of systemic importance of Ghanaian banks - IMF to BoG
The International Monetary Fund (IMF) mission to Ghana urged the Bank of Ghana (BoG) to conduct regular assessments of the systemic importance of Ghanaian banks and disclose the results to stakeholders. According to the report, the Domestic Systemically Important Bank (D-SIB) framework should provide for an annual review of designations and associated Higher Loss Absorbency (HLA) requirements, completed by a pre-determined date each year. Following the review, the BoG was advised to adopt a formal decision, notify designated institutions, and publicly disclose the list of D-SIBs along with their corresponding HLA requirements to promote transparency.
The IMF mission also urged the Central Bank to ensure that the D-SIB framework is closely integrated with supervision and resolution functions. The mission stated that "the framework forms part of a broader policy approach to systemically important banks, built on three complementary pillars: enhanced loss absorbency, intensified supervision, and improved resolvability". The identification and oversight of D-SIBs should inform the BoG's broader supervisory and resolution priorities.
Ongoing efforts to strengthen risk-based and consolidated supervision should account for risks posed by D-SIBs, while recovery and resolution planning should be prioritised for all designated institutions. The degree of resolvability should be factored into D-SIB assessment where appropriate.
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The IMF has advised the Bank of Ghana (BoG) to conduct regular assessments of the systemic importance of Ghanaian banks. The report suggests increased transparency and integration with supervision and resolution functions - but what could this mean for the financial sector?
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