A Deputy Minister of Finance, Charles Adu-Boahen, wants an independent agency to rate the various banks in the country.
This he said will help depositors, as well as investors, to make informed decisions before transacting business within the financial sector.
Speaking at a forum on the clean-up of the banking sector organized by the Danquah Institute in collaboration with Citi FM/Citi TV on Wednesday, Adu-Boahen said the rating agency should be an independent body separate from the Bank of Ghana.
“We need to insist on a rating agency. We need to have a list of banks in good standing; at any time the banks should be rated differently – the good ones who are more conservative should have an A rating, those who would take more risk could have a C rating so people could make an informed decision.”
“This rating agency should be an independent body that evaluates these banks. It is done everywhere in the world, I’m surprised it’s not done here [in Ghana]. We really need that so that people can now start having a way to benchmark and compare performance to know who to save with and who not to save with,” Adu-Boahen added.
Credit rating agencies
A rating agency is a company that assesses the financial strength of companies and government entities, especially their ability to meet principal and interest payments on their debts.
The rating assigned to a given company or country shows the agency’s level of confidence in that country or company.
There are a number of credit rating agencies in the world including Moody’s, Fitch, Standard & Poor’s who periodically rate Ghana’s credit standing.
In Ghana, the standard for rating banks is usually the banking awards organized by a private company, but that has come under intense criticism following the collapse of the seven banks in the country.
Some Ghanaians have questioned why some of the collapsed banks won prestigious awards in previous years yet collapsed after that under bizarre circumstances.
About the forum
The banking clean-up forum was on the theme “The banking sector clean-up – Are depositors safe?”
Several professionals within the banking space took turns to dissect the issues with regards to the collapse of some seven banks in Ghana and its impacts and the way forward to forestall such matters.
Minister of Finance, Ken Ofori-Atta , who was the guest speaker at the forum gave a litany of things the government was doing to clean the banking space and make it efficient enough to accommodate the robust economy the Akufo-Addo government is striving towards.
“These are difficult times because we all know people who may be impacted by what’s going on in the banking sector…We should be confident that the banking sector will come out of the current challenges much stronger. We will continue in the spirit of financial stability to protect the public till we have clarity on the way forward,” he added.
Other panelists at the forum include the law lecturer at GIMPA, Clara Kasser-Tee, senior lecturer at the Department of Economics-University of Ghana, Dr. Eric Osei-Assibey, head consultant and CEO of EBEN Consultancy, Accra, and Dr. Ebenezer Ashley.