The Bank of Ghana (BoG) is set to incorporate Business Model Analysis (BMA) into its supervisory frameworks, a forward-looking approach aimed at identifying vulnerabilities in banks at an early stage.
This initiative is part of the central bank’s efforts to ensure the stability, safety, and soundness of the banking sector amid evolving financial risks.
At the 28th Annual National Banking and Ethics Conference of the Chartered Institute of Bankers, Ghana, Dr. Ernest Addison, Governor of the Bank of Ghana, announced the issuance of an exposure draft outlining its methodology for assessing the viability of banks’ business models. This document, currently under industry review, will be finalized and adopted.
“Bank of Ghana is incorporating BMA as a key component of its supervisory frameworks to enable supervisors to identify banks’ vulnerabilities at an early stage and help to ensure their safety and soundness,” Dr. Addison stated.
He said they recently issued an exposure draft of the methodology for assessing the viability of banks’ business model to the industry, which we will soon finalise for adoption.
Business model analysis, he stressed, has the potential to enhance bank supervision and make it more effective, proactive and forward-looking, and would be the next examination thematic review next year.
The BoG revealed that BMA will be the thematic focus of its next examination cycle in 2025. By embedding BMA into its supervisory approach, the central bank aims to strengthen its ability to assess risks posed by the sustainability of banks’ operating models and strategies.
This initiative aligns with the BoG’s broader regulatory reforms, which include climate-related financial risk directives and enhanced corporate governance requirements. By adopting a forward-looking supervisory stance, the BoG seeks to ensure that Ghana’s banking sector remains robust and resilient in the face of emerging challenges.
Beyond regulatory measures, Dr. Addison asserted that a resilient financial system is built on a foundation of ethical conduct. Integrity and professionalism are indispensable pillars of trust, and they underpin the confidence that the public places in the banking sector.
In this regard, he noted that the Chartered Institute of Bankers’ Ethics Certification Programme which was developed in collaboration with BoG and launched last year was timely for this future intervention.
