Strengthen Financial Stability Fund to support struggling banks – Dr. Atuahene

Banking and finance consultant, Dr Richard Atuahene, has urged the Bank of Ghana and the government to strengthen the Ghana Financial Stability Fund to ensure the survival of struggling indigenous banks.

During an appearance on The Big Issue, Dr Atuahene emphasized that, in the wake of the domestic debt exchange programme, properly establishing the Ghana Financial Stability Fund would provide significant relief for struggling banks.

“The way out is when the Ghana Financial Stability Fund is done perfectly…If you call on the shareholder to recapitalize these losses whereas the state which brought these losses does nothing, it worsens our fiscal situation.”

Dr Atuahene also cautioned against the government’s excessive borrowing, emphasizing that it could become costly for the country if the borrowed funds are not utilized productively.

“The way we are borrowing out and not putting it to productive use, a time will come, we will have to pay through our nose.”

The Ghana Financial Stability Fund was established with a target size of GH¢15 billion to be provided by the Government of Ghana and its development partners.

The Fund is aimed at providing liquidity to financial institutions that participated fully in the Domestic Debt Exchange.

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

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


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