Banks: Recapitalization and regulatory reforms must continue despite signs of stability – BoG Governor

Governor of the Bank of Ghana, Dr Johnson Asiama has noted that financial conditions are evolving quickly.

He said that Liquidity in the system has increased.

He said commercial banks have raised concerns about the Capital Requirements Regulation (CRR) framework.

“We must carefully assess its macrofinancial implications—especially with respect to inflation, foreign exchange demand, and credit growth,” he said during his opening remarks at the 123rd Moneyray Committee Sitting, which opened on Monday, March 23.

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Dr Asiama also said that while private sector credit is recovering in nominal terms, real credit growth remains modest.

“Banks are still cautious, and Non-Performing Loans (NPL) levels remain a concern. Meanwhile, our microfinance and rural banking sectors are showing early signs of stability, but recapitalization and regulatory reforms must continue to preserve confidence.

“We must also acknowledge that some of today’s challenges stem from earlier monetary and fiscal
policy missteps—particularly loose fiscal policy during periods of macro stress, weak monetary-fiscal coordination, and delays in key structural reforms. These contributed to elevated inflation,
impaired policy transmission, and a loss of credibility.

“It is essential that we reflect on these issues—not to assign blame, but to strengthen our institutions and avoid repeating past mistakes. There are also deeper, structural issues we must not lose sight of—such as underinvestment in agriculture, persistent exchange rate misalignments, and the need to deepen domestic financial markets.

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“These are outside the scope of today’s immediate rate decision, but they will shape the broader monetary policy landscape over the medium term.”

 

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