Conduct regular assessments of systemic importance of Ghanaian banks – IMF to BoG

A technical report by an International Monetary Fund (IMF) mission to Ghana has urged the Bank of Ghana 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, it advised the BoG 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

In addition, 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 IMF mission also urged the Central Bank to ensure that the D-SIB framework is closely integrated with supervision and resolution functions. “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”.

It added that the identification and oversight of D-SIBs should inform the BoG’s broader supervisory and resolution priorities, adding, existing strong interdepartmental collaboration within the BoG should extend to incorporating D-SIB considerations into the Bank’s supervision, resolution, and macroprudential functions.

It concluded that 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. “Where appropriate, the degree of resolvability should be factored into D-SIB assessment”.

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