Dr Johnson Pandit Asiama is the Governor of the Bank of Ghana
A newly conducted assessment by the Bank of Ghana has indicated that while certain banks may be exposed to major credit losses in extreme scenarios, credit risk across the sector remains largely contained.
The BoG Bank noted that risks related to exchange rate volatility, interest rate fluctuations, and liquidity challenges were also largely contained.
This stability is attributed to strict controls on banks’ foreign exchange exposures, effective management of maturity mismatches, and adequate liquidity buffers.
The purpose of the stress tests was to assess how well the banking sector could withstand various risks, including those tied to government debt (sovereign risk), credit, market changes, and liquidity.
Despite some vulnerabilities, the Bank of Ghana concluded that the overall banking sector remains resilient.
Regarding sovereign risk, the Central Bank specifically examined how the ongoing Eurobond restructuring might affect banks’ financial health.
The analysis showed that the impact on banks’ solvency was limited, as most had already set aside provisions to absorb potential losses.
DR/MA
