The Deputy Governor of the Bank of Ghana (BoG), Mr Millison Narh, has urged banks to adopt proper risk management systems and procedures to mitigate the inherent risks they face in their daily operations.
Citing some of the risks as credit risks, market risks, liquidity risks, operational risks, legal risk, regulatory risks and reputation risks, he said the systems were necessary if the banks were to play their role effectively in growing the economy of Ghana.
Speaking at the opening of a four-day workshop on strategic asset and liability management and risk management by banks in Accra he said, “Financial institutions play an important role in growing an economy; in the process they take on varying degrees of risks.
Proper risk management systems and procedures are needed by banks to mitigate the inherent risks they face in their daily operations.” The workshop was organised by the Ghana International Bank and brought together risk managers in the banking industry to gain an understanding of how risks were categorised, quantified, monitored and managed within banks.
Mr Narh subsequently assured banks that it would continue to offer them guidance in order for them to be able to manage the risks that they encountered in their daily operations.
“As regulators, we have a responsibility to be able to critique and offer guidance to the financial institutions that we supervise in our bid to promote an enabling environment for sustainable operation of banks,” he said.
In a bid to do this, he said it was imperative that players in the banking industry have a good understanding of the best governance practice principles and procedures and subsequently institute it in their respective banks.
He explained further that “treasury and other operational staff also need a good understanding of these principles to better harness the resources available to a bank.”
Banks growing the economy
A Senior Manager of the Ghana International Bank, Mr Mark Arthur, said banks played an important role in the growth of an economy in any country and to do this, they needed to understand, identify and mitigate the risks associated with what they did.
“We need to quantify these risks and look at how to mitigate them. It is only when banks manage their assets and liability well that they can strengthen the banking sector and in the long run the economy of the country,” he said.