Private legal practitioner and Ghana School of Law lecturer Bobby Banson stated that Ghana’s banking sector cleanup could have been managed differently.
This approach may have lessened the negative impact on jobs, businesses, and customers.
Mr. Banson commented on JoyNews’ Newsfile program.
He discussed the recent court decision regarding GN Bank’s licence.
Intervention in the banking sector was necessary, Mr. Banson acknowledged.
He believes regulators had other options available.
These options could have resulted in less severe consequences than those experienced.
The Bank of Ghana spearheaded the cleanup between 2017 and 2019.
The exercise led to the revocation of licences for numerous banks, savings and loans companies, and microfinance firms.
These institutions faced issues like insolvency and regulatory breaches.
Mr. Banson noted the regulators' strategy heavily focused on shutting down entities.
It also involved merging some firms and prosecuting individuals suspected of wrongdoing.
He questioned if an alternative strategy could have produced better results.
This alternative might have included providing financial support to struggling banks.
It could also have aimed to preserve jobs and protect customers.
Mr. Banson pointed out that Ghana never truly tested such an alternative approach.
Regulators proceeded with the cleanup model that was implemented.
He suggested that posterity did not allow for testing the other path.
The Court of Appeal ruling on GN Bank's licence is not necessarily final.
The Bank of Ghana can still appeal the decision at the Supreme Court.
Mr. Banson expects the Bank of Ghana to consider appealing.
This is to seeking finality on the matter.
The outcome of any further appeal could guide future financial sector regulation.
It will help determine the legal justification for the central bank’s actions.
This guidance is crucial for deciding on repeating similar measures.