Increasing Pressures On The Solvency of Banks In Ghana, According To BoG | Implications

Increasing Pressures On The Solvency of Banks In Ghana, According To BoG | Implications

There is increasing pressures on the solvency of banks in Ghana. The disclosure was made by the Bank of Ghana in it’s 111 Monetary Policy Committee briefing today, 27th March 2023.

According to IMF.org, solvency risk defines the risk that a bank cannot meet maturing obligations because it has a negative net worth; that is, the value of its assets is smaller than the amount of its liabilities.

The implication of the information disclosed by the Bank of Ghana means banks may not be able to meet the demands of depositors, service providers to the banks etc. The ultimate end of an insolvent bank or institution is a total collapse.

However, the Bank of Ghana also disclosed during the MPC briefing that the BoG has put in place measures to address the challenges that were identified in the banking industry. Also, the BoG is prepared to move to support banks that may be distressed to save them.

See also: Interest On Loans To Increase Further As Bank of Ghana Increases Policy Rate Today

Related

In the same briefing, the central bank indicated that there are engagements with the International Monetary Fund (IMF) to provide zero (0) financing to the government. The government informed the public that an agreement would be signed soon.

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