Ghanaians will continue to have faith in the banking industry as long as they do not have any liquidity issues, according to Joe Jackson, Director of Operations at Dalex Finance and Leasing Company.
He said that if banks started to delay returning clients' money when asked, it may lead to confusion and breed mistrust.
"The confidence will remain as long as someone rings my doorbell and I continue making payments. On JoyNews' PM Express, he stated, "We at Dalex Finance are extremely clear about that, and I'm sure the entire banking sector is clear.
To avoid being caught out as being unprepared when consumers start demanding their money from them, he recommended banks address any liquidity concerns.
"We must first address the liquidity difficulties while we discreetly address our solvency and capital adequacy ratios. The liquidity is that if someone knocks on my door and demands the 5,000 cedis I provided them, I should be able to get that money back.
"The trust will be there as long as you return that money promptly and without any haircuts - the government is the one delivering the haircuts, the banking industry hasn't spoken about giving any haircuts," he urged.
Joe Jackson urged increased openness in the government's liquidity assistance fund as well.
The government of Ghana and its development partners have established the Ghana Financial Stability Fund, a $15 billion facility that provides liquidity to financial institutions that fully engage.
All financial institutions (banks, SDIs, pension plans, collective investment schemes, fund managers, broker/dealers, and insurance firms) that fully participated in the Debt Exchange were able to access the Fund for increased liquidity support as of the Exchange's completion date, according to a statement released in Accra by the Financial Stability Council.
It said that the Bank of Ghana will manage the Fund by special operating standards being created by the Council.
According to the statement, the Council will continue to offer guidance and oversight for the implementation of the GFSF, including accounting treatment and legal Tools to Reduce Financial Stability Risks from Debt Operation.
However, Joe Jackson asserted that without transparent management of the assets and extremely explicit instructions on how to access them, Financial institutions might be in danger if money is distributed and handled improperly.
"So, the question of this liquidity fund is what remains. If the fund performs as promised and is adequately financed, you will notice that liquidity is not a problem that can be put off. For example, you cannot tell someone who wants liquidity today to return next week because the fund is short on funds.
"The fund must exist, and it must be fully funded even before issues are anticipated. As long as that occurs, the fund is transparent, the facts are apparent, and we are aware of how to access the fund and utilise it for our liquidity needs, both banks and investors will benefit.
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