An International Monetary Fund (IMF) mission to Ghana has urged the Bank of Ghana (BoG) to strengthen transparency in the banking sector by conducting regular assessments of systemically important banks and publicly disclosing the results.
According to a technical report issued by the IMF mission, the central bank’s Domestic Systemically Important Bank (D-SIB) framework should include annual reviews of banks considered critical to the stability of Ghana’s financial system, alongside corresponding Higher Loss Absorbency (HLA) requirements.
The report said the review process should be completed by a predetermined date each year, after which the Bank of Ghana should formally notify affected institutions and publish the updated list of designated D-SIBs.
Push for Greater Transparency
The IMF noted that public disclosure of the designated banks and their capital requirements would enhance transparency and strengthen confidence in the country’s financial system.
It further recommended that the BoG publish detailed information on the methodology used in determining D-SIB classifications and calibrating HLA requirements.
“The framework should include publication of detailed information on the methodology used for D-SIB assessments and HLA calibration, including the role of supervisory judgment,” the report stated.
The mission explained that stronger disclosure standards would provide stakeholders with greater clarity on how systemic risks are assessed and managed within the banking sector.
The IMF also called for closer integration of the D-SIB framework into the Bank of Ghana’s broader supervision and resolution systems.
According to the report, the framework should operate within a wider policy structure built around “enhanced loss absorbency, intensified supervision, and improved resolvability.”
The mission stressed that banks identified as systemically important should face closer oversight because of the potential risks they pose to the wider financial system in the event of distress or failure.
It further advised the central bank to incorporate D-SIB considerations into its macroprudential supervision, resolution planning, and broader financial stability operations.
Financial Stability Focus
The report acknowledged existing collaboration among departments within the Bank of Ghana but urged the institution to deepen coordination in managing systemic banking risks.
It added that ongoing efforts to strengthen risk-based and consolidated supervision should specifically account for the risks posed by large and interconnected banks.
“Recovery and resolution planning should be prioritised for all designated institutions,” the IMF mission stated, adding that the degree of a bank’s resolvability should also be considered during D-SIB assessments.
The recommendations come as Ghana continues efforts to strengthen financial sector resilience following recent banking sector reforms and broader macroeconomic adjustment measures.
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