An International Monetary Fund (IMF) technical report has called on the Bank of Ghana to regularly assess the systemic importance of Ghana’s banks and publicly disclose the results to stakeholders.
It recommended that the Domestic Systemically Important Bank (D-SIB) framework include an annual review of bank designations and their Higher Loss Absorbency (HLA) requirements, to be completed by a set date each year.
After each review, the IMF said the BoG should take formal decisions, notify affected banks, and publish the list of D-SIBs together with their HLA requirements to improve transparency.
It also advised that the framework should disclose the methodology used in assessing D-SIBs and setting capital requirements, including how supervisory judgment is applied.
The mission further stressed the need for closer alignment between the D-SIB framework and the Bank’s supervision and resolution functions.
“The framework forms part of a broader policy approach to systemically important banks, built on three complementary pillars: enhanced loss absorbency, intensified supervision, and improved resolvability”.
According to the report, identifying and monitoring D-SIBs should guide the BoG’s supervisory and resolution priorities.
It also said existing coordination within the central bank should be expanded to fully integrate D-SIB considerations into supervision, resolution, and macroprudential work.
It concluded that efforts to strengthen risk-based and consolidated supervision should take into account the risks posed by D-SIBs, while recovery and resolution planning should be prioritised for all designated institutions.
“Where appropriate, the degree of resolvability should be factored into D-SIB assessment”.
