The Bank of Ghana (BoG), under the leadership of Governor Dr. Ernest Addison, has implemented a series of regulatory reforms aimed at strengthening the country’s financial sector.
These measures address emerging “horizon risks” and enhance risk management frameworks, capital requirements, and corporate governance standards to promote market transparency and discipline.
This came to light when the Governor addressed industry players at the 28th Annual National Banking and Ethics Conference of the Chartered Institute of Bankers, Ghana, in Accra.
The 28th Annual National Banking and Ethics Conference, which was held on the theme “Resilience in the Financial System: Navigating Horizon Risks”, highlighted the role of ethical practices in enhancing professionalism within Ghana’s banking sector.
This focus is especially timely given recent challenges such as the Domestic Debt Exchange Programme and its impact on public confidence in financial institutions.
The programme underscored the importance of integrating ethical training, fostering values-based organizational cultures, and adhering to the Ghana Banking Code of Ethics and Business Conduct, launched in collaboration with BoG.
Dr. Addison highlighted the evolving nature of risks facing the banking sector. Traditional mitigation approaches, he noted, are insufficient to address challenges related to technological advancements, climate and sustainability issues, global economic shocks, and the viability of certain business models.
“As digital banking gains prominence, its associated risks have also become imminent. Data privacy and security risks, cyber threats and the consequent potential liabilities and reputational risks pose a significant danger to financial stability,” he noted.
Adding that “This has required intensification of efforts to establish robust cybersecurity frameworks across the sector.”
Given this, he observed that the central bank recently launched the Financial Industry Command Security Operations Centre (FISOC) to improve cybersecurity resilience in the banking sector.
Additionally, he encouraged banks to invest in advanced technologies and capacity-building to keep pace with the rapid digital transformation, while maintaining comprehensive cybersecurity frameworks to prevent breaches and ensure data privacy.”
Further to climate risk, external economic shocks also pose risks to financial stability. Given rising economic uncertainties in recent times, it emerged that the BoG has enhanced its stress-testing framework to evaluate the resilience of banks under adverse conditions.
The Bank’s macroprudential surveillance framework is continuously refined to detect risks and prepare to counter disruptions before they materialize.
To respond to these complexities, the BoG has adopted a multi-dimensional strategy that includes: Sustainable Banking Principles and encouraging environmentally and socially responsible banking practices; and climate-related financial risk directives, which ensures that financial institutions account for environmental risks in their operational frameworks.
It also includes outsourcing and cybersecurity directives. This means strengthening systems against operational vulnerabilities, especially in technology-dependent environments.
These reforms are expected to enhance the competitiveness and sustainability of Ghana’s banking industry, reinforcing its role as a driver of economic growth amid global uncertainties.
