Senior lecturer of the Department of Finance at the University of Ghana Business School, Dr. Lord Mensah, says that the government must, now more than ever, be serious with restoring the confidence of the public in the banking sector as failure to do so will have severe repercussions for the country’s economy.
He says that inasmuch as depositors whose monies were once locked up are receiving their funds back, they are yet to be confident in investing it back into the system.
Dr. Mensah explained that the lack of confidence in the sector has caused many to turn to treasury bill investments.
“You are looking at a sector where people have been wounded before and even if you are paying them as we speak now, you don’t know the confidence that they have. We know the economic repercussions when depositors are not bringing their money to the banking sector. It has a serious impact on the economy…When you look at the balance sheet of a typical bank, you will get to know that treasury bill investment is swelling because that is where they have the confidence,” Dr. Lord Mensah said on Accra-based 3FM.
The Financial Analyst added that considering the repercussions of little confidence in the system, it was necessary to ensure that those who nearly caused the collapse of the sector to be brought before the law.
“We know the economic repercussion so we have to take it seriously and ensure that those who brought the country to that level, at least, face the law,” he added.
Speaking on the same issue, Joe Jackson, also a financial analyst, accused the Bank of Ghana of not doing enough to restore the confidence of Ghanaians.
According to him, the Central Bank has not fully equipped institutions it has established as solvents to be able to return the funds of depositors.
“The central bank may not have done enough to support those institutions that it has set as solvents. Because confidence only comes whenever they go to the institution and they get my money back on time without any excuses or timetable,” he said.
Story by: Jeffrey Nyabor | universnewsroom.com