Seth Terkper[/caption] The Bank of Ghana has been accused of not being mindful of the consequences in its pursuit of the “discriminatory” financial sector reforms. Former Finance Minister Seth Terkper who is making the allegation suggested that the selective approach of the central bank was a deviation of processes the erstwhile government was implementing to address the financial sector challenges. He was speaking on TV3’s Business Focus on Monday where he cited the Energy Sector Levy Act (ESLA) and Deposit Protection Act as some of the measures introduced by the Mahama-led administration to get some ailing banks on track. “If you use one mechanism, right, to save a group of banks whose shareholders are still holding those shares today, through the mechanism of GAT (Ghana Amalgamated Trust), through the mechanism of consolidation and others, but you fail to use the mechanism to address the problems of others, including those that were downgraded…you open yourself to the charge of discrimination,” he told host of the show Paa Kwesi Asare. Though he admitted “no minister of finance or president would be deliberately careless” in pursuing public policies, he believes the current government could have done better in managing the crisis confronting the financial sector. “If a bank is functioning, then as a manager of the economy, you then have to look at the consequences of your action, you are making a distinction between a bank that is not functioning and a bank that has problems but it is functioning. That is where the difference lies. You have to weigh. “Base on the global financial crisis, and I repeat, base on problems in other economies and the rest, you don’t rush. Banks were closed, the Lehman Brothers, and another one in the US during the global financial crisis, the effect and ramification was so severe that no banks were made to fail in the US…The EU, the Americans decided that they have to assess the impact of bringing down banks. “And so if a bank is functioning, then one has to take a side to see whether the bank can be salvaged. By the way, some of the bank you see that they are healthy today or as at 2017 benefited from the 2.2 billion restructuring and 250 million cash injection. I am talking about the measures we took…they were 13 banks.” Mr. Terkper said when the country’s banking sector was squeezed further by the power crisis and the global economic meltdown, Ghana “escaped recession” because of the measures government took at his time. Problems of the financial sector, he diagnosed, were non-performing loans; governance issue as some liquidity were misplaced; and use of depositors’ funds for non-banking business. All these were made known following the Asset Quality Review report commissioned by the government, he said. The former finance minister conceded that the NDC government would have still shut down some banks based on recommendations made in the report with caution. “You only take action when the bank is at a point that it cannot be saved, even that you have to be mindful of the consequences.” By Isaac Essel /3news.com]]>
