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Friday, August 21, 2009

Hackman advocates for Financial Authority & Ombudsman

By Daniel Nonor (Email k2dan@yahoo.co.uk)

Hon. Hackman Owusu Agyeman -Former Minister of Works and Housing
Hon. Hackman Owusu Agyeman -Former Minister of Works and Housing
In the wake of the recent turbulence in the financial sector in neighbouring Nigeria and across the globe, Hon. Hackman Owusu-Agyepong, former Minister of Water Resources, Works and Housing, and current Member of Parliament for New Juaben North constituency, has reiterated the call for the establishment of a Financial Authority and Financial Ombudsman in Ghana, as is practiced in developed countries such as the United States of America and the United Kingdom.

He said the call is in response to President Mills’ appeal to members of parliament to join him in managing the economy, during its difficult times, in his maiden State of the Nations address, delivered to parliament a couple of months ago.

Speaking to The Chronicle in Accra yesterday, the Honourable Member of parliament said he had been very concerned about recent developments within the international banking sector, and Ghana is by no means an island which can not be insulated from external happenings.

According to him, the Bank of Ghana at present has not got the wherewithal to superintend over the banks effectively, to the extent that the little money that ordinary Ghanaians save at the banks will be secured for them. “That is why I am asking for a regulatory body that will mainly monitor the financial sector,” he said.

Hon. Hackman, in an earlier letter, dated 14th April 2006, copied to the President of Ghana - H.E John Evans Atta Mills and the President of the Association of Ghana Industries (AGI) and sighted by The Chronicle, indicated that the regulatory function of the state was not fully exercised, to the extent that there was a clear frustration on the part of the Ghanaian businessman due to the cost of doing business in the country.

“I would boldly say that the ordinary Ghanaian and businesses are being short-changed, indeed exploited by the banks and other Financial Institutions,” he said, and added that “Recent competition not withstanding, one is left with the deep seated conviction that some form of a cartel operation is at play.” He emphasized that “what is required is a fresh look at the banking sector and to put in place a regulatory mechanism that will enforce equity and fairness, and a resolution mechanism for grievances that might arise.”

He further noted that with the present ‘modus operandi’ of the Monetary Policy Committee, the Bank of Ghana will have no moral authority to play the role of an unbiased, fair and firm regulator of the people’s interest.

According to him, “nobody can justify that the prime rate is 18.5%, but the base rate of the banks is between 29-30% and therefore a lending rate of around 32 % (if one is fortunate).”

“Year in and year out, banks make more that 40% net profit, after paying themselves well...how many businesses are breaking even, let alone making 10% profit,” he questioned.

He has thus called for a bill to be introduced to parliament to establish these financial authorities, with the necessary assistance from the United Kingdom High Commission and other financial specialists.

The Governor of the Bank of Ghana, Dr. Paul Acquah, sharing his view on the subject with The Chronicle, after the function yesterday, said there are prons and cons for a single financial authority and that such decision should be conditioned by prevailing circumstances of each individual country.

In the United Kindom, the Financial Services Authority ("FSA") acts as an independent non-governmental body, quasi-judicial body and a company limited by guarantee that regulates the financial services industry .

Source:The Chronicle

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