{"id":62314,"date":"2023-12-15T16:26:28","date_gmt":"2023-12-15T16:26:28","guid":{"rendered":"https:\/\/www.africa-press.net\/ghana\/?p=62314"},"modified":"2023-12-15T14:40:09","modified_gmt":"2023-12-15T14:40:09","slug":"giving-liquidity-support-to-the-failed-banks-was-not-going-to-change-anything-addison","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/ghana\/all-news\/giving-liquidity-support-to-the-failed-banks-was-not-going-to-change-anything-addison","title":{"rendered":"Giving liquidity support to the failed banks was not going to change anything \u2013 Addison"},"content":{"rendered":"

Africa-Press – Ghana. <\/strong><\/span>Governor of the Bank of Ghana (BoG), Dr Ernest Addison, has said that the central bank under his leadership took the requisite prudent policy measures to stabilise the economy as well as the financial sector before Covid struck.<\/b><\/p>\n

At the time he came into office in April 2017, he said, the country had inherited an International Monetary Fund (IMF) programme that was off track.<\/p>\n

\u201cWe put it back on track, and successfully completed the programme in April 2019,\u201d he said.<\/p>\n

He added that the financial sector clean-up was very high on the agenda in putting the system back on track.<\/p>\n

\u201cThe issue of resolving the first, two [insolvent] banks came very early on \u2013 I had been in office for barely three months. This was a prior action that was required to proceed to the next stage of an IMF board approval for disbursements to Ghana in August of 2017. Then, barely a year after that, based on the work of the supervision department of Bank of Ghana, we had to close five more banks that were insolvent. Contextually, these banks had previously received excessive liquidity support from the Bank of Ghana, some of which was misused. By the end of 2018, we had closed down nine banks, 23 savings and loans institutions and 347 microfinance institutions. That was the context,\u201d Dr Addison told centralbanking.com.<\/p>\n

The nine banks that collapsed during the financial sector clean up were UT Bank, Capital Bank, UniBank, The Royal Bank, The Beige Bank, Sovereign Bank, The Construction Bank, Premium Bank and Heritage Bank.<\/p>\n

Dr Addison stated that it was clear these banks were not viable and just giving them liquidity support was not going to change anything.<\/p>\n

\u201cWe needed to go ahead and resolve them, put them into receivership and then transfer the positive elements. In the case of the first two banks, we transferred the good assets and liabilities to a larger commercial bank. And then, in the second instance, we had to create a bridge bank, putting all the good assets and liabilities of the five banks in one new bank. Given the circumstances or the time, we couldn’t have done it differently,\u201d he said.<\/p>\n

On the macro side, he added \u201cwe started off with a robust fiscal stance. From 2017 through to 2019, central bank financing of the budget was zero, even though the Bank of Ghana Act pegged it at 5% of the previous year’s tax revenue.\u201d<\/p>\n

In that context, he said, inflation declined very quickly. Therefore, the monetary policy rate also came down, and growth rebounded strongly.<\/p>\n

\u201cThis was the context for the first three years of the current administration,\u201d he stressed.<\/p>\n

\u201cBy the end of 2019, the financial sector clean-up was completed. The main banks had been strengthened and the weaker banks were out of the system. The banking sector was poised, with the additional capital through the recapitalisation process, to support financial intermediation. Then, out of the blue, we had Covid-19 pandemic.<\/p>\n

\u201cThe government’s response to the pandemic, was captured by the president’s famous quotation that \u2018we know how to bring the economy back, but we don’t know how to bring human lives back’. This was the philosophy behind the government’s approach in dealing with Covid. Therefore, government spending was ratcheted up to support several intervention schemes that were put into place to mitigate the impact of Covid. Obviously, with revenue shortfalls, the financing of these large-scale expenditures became a challenge.<\/p>\n

\u201cPrior to that, we had not done any monetary financing, that is financing of the budget had been zero. Therefore, providing financing support to the government was not an easy transition for us to make. We had some good discussions going into it. The finance minister went to Parliament and requested for a suspension of the Fiscal Responsibility Act due to the pandemic. This enabled us to trigger emergency provisions in the Bank of Ghana Act to provide exceptional financing for the government budget. And that’s what we did.<\/p>\n

\u201cFor me, it was a big reawakening, because I did not foresee that the central bank would be drawn into budget financing. But, given global developments especially with central banks in advanced economies, it seemed like monetary accommodation of fiscal policy to meet Covid expenditures had become part of the norm. In addition, the IMF itself allocated additional SDRs, which are assets held by central banks, and designated these SDRs to help governments meet their Covid expenditures. This meant the central bank could automatically lend on these additional resources to meet the needs of the budget. This changed the psyche \u2013 having to on-lend IMF resources plus triggering the emergency provisions to provide central bank financing to the budget. This was difficult for me.\u201d<\/p>\n

For More News And Analysis About Ghana<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – Ghana. Governor of the Bank of Ghana (BoG), Dr Ernest Addison, has said that the central bank under his leadership took the requisite prudent policy measures to stabilise the economy as well as the financial sector before Covid struck. At the time he came into office in April 2017, he said, the country […]<\/p>\n","protected":false},"author":84,"featured_media":62312,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5],"tags":[5092,5096,429],"class_list":["post-62314","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","tag-africa-press","tag-africa-press-ghana","tag-ghana"],"yoast_head":"\nGiving liquidity support to the failed banks was not going to change anything \u2013 Addison - Ghana<\/title>\n<meta name=\"description\" content=\"Governor of the Bank of Ghana (BoG), Dr Ernest Addison, has said that the central bank under his leadership took the ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/ghana\/all-news\/giving-liquidity-support-to-the-failed-banks-was-not-going-to-change-anything-addison\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Giving liquidity support to the failed banks was not going to change anything \u2013 Addison\" \/>\n<meta property=\"og:description\" content=\"Governor of the Bank of Ghana (BoG), Dr Ernest Addison, has said that the central bank under his leadership took the ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/ghana\/all-news\/giving-liquidity-support-to-the-failed-banks-was-not-going-to-change-anything-addison\" \/>\n<meta property=\"og:site_name\" content=\"Ghana\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2023-12-15T16:26:28+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/ghana\/sites\/18\/2023\/12\/sm_1702638518.781109.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1280\" \/>\n\t<meta property=\"og:image:height\" content=\"720\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/ghana\/all-news\/giving-liquidity-support-to-the-failed-banks-was-not-going-to-change-anything-addison#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/ghana\/all-news\/giving-liquidity-support-to-the-failed-banks-was-not-going-to-change-anything-addison\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/ghana\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"Giving liquidity support to the failed banks was not going to change anything \u2013 Addison\",\"datePublished\":\"2023-12-15T16:26:28+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/ghana\/all-news\/giving-liquidity-support-to-the-failed-banks-was-not-going-to-change-anything-addison\"},\"wordCount\":808,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/ghana\/all-news\/giving-liquidity-support-to-the-failed-banks-was-not-going-to-change-anything-addison#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/ghana\/sites\/18\/2023\/12\/sm_1702638518.781109.jpg\",\"keywords\":[\"Africa Press\",\"Africa Press-Ghana\",\"ghana\"],\"articleSection\":[\"all news\",\"Economy\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/ghana\/all-news\/giving-liquidity-support-to-the-failed-banks-was-not-going-to-change-anything-addison#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/ghana\/all-news\/giving-liquidity-support-to-the-failed-banks-was-not-going-to-change-anything-addison\",\"url\":\"https:\/\/www.africa-press.net\/ghana\/all-news\/giving-liquidity-support-to-the-failed-banks-was-not-going-to-change-anything-addison\",\"name\":\"Giving liquidity support to the failed banks was not going to change anything \u2013 Addison - Ghana\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/ghana\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/ghana\/all-news\/giving-liquidity-support-to-the-failed-banks-was-not-going-to-change-anything-addison#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/ghana\/all-news\/giving-liquidity-support-to-the-failed-banks-was-not-going-to-change-anything-addison#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/ghana\/sites\/18\/2023\/12\/sm_1702638518.781109.jpg\",\"datePublished\":\"2023-12-15T16:26:28+00:00\",\"author\":{\"@id\":\"https:\/\/www.africa-press.net\/ghana\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"description\":\"Governor of the Bank of Ghana (BoG), Dr Ernest Addison, has said that the central bank under his leadership took the ...\",\"breadcrumb\":{\"@id\":\"https:\/\/www.africa-press.net\/ghana\/all-news\/giving-liquidity-support-to-the-failed-banks-was-not-going-to-change-anything-addison#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.africa-press.net\/ghana\/all-news\/giving-liquidity-support-to-the-failed-banks-was-not-going-to-change-anything-addison\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.africa-press.net\/ghana\/all-news\/giving-liquidity-support-to-the-failed-banks-was-not-going-to-change-anything-addison#primaryimage\",\"url\":\"https:\/\/static.africa-press.net\/ghana\/sites\/18\/2023\/12\/sm_1702638518.781109.jpg\",\"contentUrl\":\"https:\/\/static.africa-press.net\/ghana\/sites\/18\/2023\/12\/sm_1702638518.781109.jpg\",\"width\":1280,\"height\":720,\"caption\":\"Giving liquidity support to the failed banks was not going to change anything \u2013 Addison\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.africa-press.net\/ghana\/all-news\/giving-liquidity-support-to-the-failed-banks-was-not-going-to-change-anything-addison#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.africa-press.net\/ghana\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Giving liquidity support to the failed banks was not going to change anything \u2013 Addison\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.africa-press.net\/ghana\/#website\",\"url\":\"https:\/\/www.africa-press.net\/ghana\/\",\"name\":\"Ghana\",\"description\":\"Just another Africa News Agency Sites site\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.africa-press.net\/ghana\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.africa-press.net\/ghana\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\",\"name\":\"cfeditoren\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.africa-press.net\/ghana\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/7417380fa9e23b5c57fdbfdaf3fdf92ee478f759a084addda5faa3732853e74a?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/7417380fa9e23b5c57fdbfdaf3fdf92ee478f759a084addda5faa3732853e74a?s=96&d=mm&r=g\",\"caption\":\"cfeditoren\"}}]}<\/script>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Giving liquidity support to the failed banks was not going to change anything \u2013 Addison - Ghana","description":"Governor of the Bank of Ghana (BoG), Dr Ernest Addison, has said that the central bank under his leadership took the ...","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.africa-press.net\/ghana\/all-news\/giving-liquidity-support-to-the-failed-banks-was-not-going-to-change-anything-addison","og_locale":"en_US","og_type":"article","og_title":"Giving liquidity support to the failed banks was not going to change anything \u2013 Addison","og_description":"Governor of the Bank of Ghana (BoG), Dr Ernest Addison, has said that the central bank under his leadership took the ...","og_url":"https:\/\/www.africa-press.net\/ghana\/all-news\/giving-liquidity-support-to-the-failed-banks-was-not-going-to-change-anything-addison","og_site_name":"Ghana","article_publisher":"https:\/\/www.facebook.com\/AfricaPressTunisiaa","article_published_time":"2023-12-15T16:26:28+00:00","og_image":[{"width":1280,"height":720,"url":"https:\/\/static.africa-press.net\/ghana\/sites\/18\/2023\/12\/sm_1702638518.781109.jpg","type":"image\/jpeg"}],"author":"cfeditoren","twitter_card":"summary_large_image","twitter_misc":{"Written by":"cfeditoren","Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.africa-press.net\/ghana\/all-news\/giving-liquidity-support-to-the-failed-banks-was-not-going-to-change-anything-addison#article","isPartOf":{"@id":"https:\/\/www.africa-press.net\/ghana\/all-news\/giving-liquidity-support-to-the-failed-banks-was-not-going-to-change-anything-addison"},"author":{"name":"cfeditoren","@id":"https:\/\/www.africa-press.net\/ghana\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb"},"headline":"Giving liquidity support to the failed banks was not going to change anything \u2013 Addison","datePublished":"2023-12-15T16:26:28+00:00","mainEntityOfPage":{"@id":"https:\/\/www.africa-press.net\/ghana\/all-news\/giving-liquidity-support-to-the-failed-banks-was-not-going-to-change-anything-addison"},"wordCount":808,"commentCount":0,"image":{"@id":"https:\/\/www.africa-press.net\/ghana\/all-news\/giving-liquidity-support-to-the-failed-banks-was-not-going-to-change-anything-addison#primaryimage"},"thumbnailUrl":"https:\/\/static.africa-press.net\/ghana\/sites\/18\/2023\/12\/sm_1702638518.781109.jpg","keywords":["Africa Press","Africa Press-Ghana","ghana"],"articleSection":["all news","Economy"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/www.africa-press.net\/ghana\/all-news\/giving-liquidity-support-to-the-failed-banks-was-not-going-to-change-anything-addison#respond"]}]},{"@type":"WebPage","@id":"https:\/\/www.africa-press.net\/ghana\/all-news\/giving-liquidity-support-to-the-failed-banks-was-not-going-to-change-anything-addison","url":"https:\/\/www.africa-press.net\/ghana\/all-news\/giving-liquidity-support-to-the-failed-banks-was-not-going-to-change-anything-addison","name":"Giving liquidity support to the failed banks was not going to change anything \u2013 Addison - Ghana","isPartOf":{"@id":"https:\/\/www.africa-press.net\/ghana\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.africa-press.net\/ghana\/all-news\/giving-liquidity-support-to-the-failed-banks-was-not-going-to-change-anything-addison#primaryimage"},"image":{"@id":"https:\/\/www.africa-press.net\/ghana\/all-news\/giving-liquidity-support-to-the-failed-banks-was-not-going-to-change-anything-addison#primaryimage"},"thumbnailUrl":"https:\/\/static.africa-press.net\/ghana\/sites\/18\/2023\/12\/sm_1702638518.781109.jpg","datePublished":"2023-12-15T16:26:28+00:00","author":{"@id":"https:\/\/www.africa-press.net\/ghana\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb"},"description":"Governor of the Bank of Ghana (BoG), Dr Ernest Addison, has said that the central bank under his leadership took the ...","breadcrumb":{"@id":"https:\/\/www.africa-press.net\/ghana\/all-news\/giving-liquidity-support-to-the-failed-banks-was-not-going-to-change-anything-addison#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.africa-press.net\/ghana\/all-news\/giving-liquidity-support-to-the-failed-banks-was-not-going-to-change-anything-addison"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.africa-press.net\/ghana\/all-news\/giving-liquidity-support-to-the-failed-banks-was-not-going-to-change-anything-addison#primaryimage","url":"https:\/\/static.africa-press.net\/ghana\/sites\/18\/2023\/12\/sm_1702638518.781109.jpg","contentUrl":"https:\/\/static.africa-press.net\/ghana\/sites\/18\/2023\/12\/sm_1702638518.781109.jpg","width":1280,"height":720,"caption":"Giving liquidity support to the failed banks was not going to change anything \u2013 Addison"},{"@type":"BreadcrumbList","@id":"https:\/\/www.africa-press.net\/ghana\/all-news\/giving-liquidity-support-to-the-failed-banks-was-not-going-to-change-anything-addison#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.africa-press.net\/ghana\/"},{"@type":"ListItem","position":2,"name":"Giving liquidity support to the failed banks was not going to change anything \u2013 Addison"}]},{"@type":"WebSite","@id":"https:\/\/www.africa-press.net\/ghana\/#website","url":"https:\/\/www.africa-press.net\/ghana\/","name":"Ghana","description":"Just another Africa News Agency Sites site","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.africa-press.net\/ghana\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.africa-press.net\/ghana\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb","name":"cfeditoren","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.africa-press.net\/ghana\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/7417380fa9e23b5c57fdbfdaf3fdf92ee478f759a084addda5faa3732853e74a?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/7417380fa9e23b5c57fdbfdaf3fdf92ee478f759a084addda5faa3732853e74a?s=96&d=mm&r=g","caption":"cfeditoren"}}]}},"_links":{"self":[{"href":"https:\/\/www.africa-press.net\/ghana\/wp-json\/wp\/v2\/posts\/62314","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.africa-press.net\/ghana\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.africa-press.net\/ghana\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.africa-press.net\/ghana\/wp-json\/wp\/v2\/users\/84"}],"replies":[{"embeddable":true,"href":"https:\/\/www.africa-press.net\/ghana\/wp-json\/wp\/v2\/comments?post=62314"}],"version-history":[{"count":0,"href":"https:\/\/www.africa-press.net\/ghana\/wp-json\/wp\/v2\/posts\/62314\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.africa-press.net\/ghana\/wp-json\/wp\/v2\/media\/62312"}],"wp:attachment":[{"href":"https:\/\/www.africa-press.net\/ghana\/wp-json\/wp\/v2\/media?parent=62314"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.africa-press.net\/ghana\/wp-json\/wp\/v2\/categories?post=62314"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.africa-press.net\/ghana\/wp-json\/wp\/v2\/tags?post=62314"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}